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Sep 20, 2020 – New York, NY
Our world is changing. After decades of relying on third-party cookies to handle the technical inner workings of advertising, marketers will finally be forced to find a new way. A more secure, more verifiable, and, ideally, less creepy way. Third-party cookies and the targeting they enable have become a blight on the ad industry – and the internet as a whole – and everybody from individuals to big tech companies to governments has moved against them in recent years.
In many ways, Europe has a headstart in developing solutions to this new reality given the restrictions put in place with GDPR. They have been forced for several years now to figure out how to advertise without the same trove of data and tactics that third-party cookies permit. But US companies have also risen to the challenge and are innovating – publishers are creating data sharing syndicates, identity resolution platforms are expanding their cookieless datasets and advertisers are finding silver linings in the opportunities presented. Make no mistake: How these players in the US address this challenge will likely influence how advertisers all around the world operate.
But while the tide has been turning against third-party cookies for some time, there was an inflection point in January when Google announced that their Chrome browser would be discontinuing support for third-party cookies within the next two years. Safari and Firefox may have been early to block third-party cookies but, with 66% of the browser market share, Google’s announcement signals the final nail in the coffin. Marketers can no longer pretend that their old tactics will continue to work or say they’re ‘waiting to see’ how things will shake out.
After this announcement by Google, the top question on advertisers’ minds was the potential impact on how they operate. How will we be able to build audience segments to effectively target? How will we be able to attribute sales? Currently, that’s the remit of the third-party cookie. Publishers also wondered about the effect this change would have on their revenue if marketers no longer had granular audiences, independent attribution, and the confidence that came with those. But this problem had been on the horizon for so long that potential solutions have already begun bubbling to the surface. These are some of the major changes we expect with the death of the third-party cookie over the coming years…
Even prior to their announcement, Google had begun planning a Privacy Sandbox – a family of APIs to call data stored on your browser with users grouped into cohorts of similar web users – to replace the need for third-party cookies and all of their weaknesses. This is intended to eventually be an open-source solution to be adopted by other browsers, but there remains skepticism of how agnostic and trustworthy this will be given one of the major ad platforms is creating it.
Publishers are also moving quickly to develop their first-party data ecosystem to fill the void left by the disappearance of third-party cookies. They are seeing this as an opportunity to reclaim some of their power by owning and brokering their own data, rather than being at the mercy of Google and Facebook. While this will be a heavy lift for the publishers and an adjustment for advertisers, there are potential upsides all around with a stronger emphasis on direct and programmatic guaranteed deals that leverage the publisher’s data. While the accuracy of third-party data segments and cross-device attribution has often been called into question, advertisers tapping directly into a publisher’s first-party data will have more confidence in the quality of the audiences, the increased brand safety, and the reduced risk of fraud. This does not mean that advertisers shouldn’t ask the publisher hard questions about the origins and composition of the data, particularly around interest and intent-based audiences. If relying on the publisher for attribution, similar questions should be asked to ensure that there is transparency and trust in reporting.
Long having languished since third-party targeting took center stage, contextual targeting will see a comeback as a natural complement to publisher first-party targeting. Relying on the content the user is viewing, complementary ads will run alongside these articles and videos in a brand-safe and low-fraud environment without any need for third-party data and the accompanying creepiness. With the shiny promises of advanced, granular segments fading, advertisers may remember the straightforward simplicity contextual targeting allows – with regards to reaching “the right person, to the right message, at the right time”.
There has also been a recent uptick in the number of brands requesting brand and sales-uplift studies as a result of the decreased reliability of cookie-based attribution. However, as these studies are typically rather expensive, they require larger media budgets to justify the additional costs. Some publishers have begun offering studies as an added value on higher-budget campaigns both to increase the potential spend and to prove their efficacy as a partner.
Given the impending death of in-browser third-party cookies – and the growth of cookieless environments like mobile apps and connected TVs – identity resolution platforms have spent the last several years building out large data sets of anonymized online identities. Rather than relying on cookies and their limitations in modern internet usage, these services are creating digital identities tied to non-PII data to tie together their interests, ad impressions, and ultimately conversions. Using platforms such as LiveRamp, Zeotap, Adobe, and (soon) Salesforce, these IDs are able to be bridged with a brand’s first-party data and enable privacy-first cookieless targeting and attribution that may fill much of the void left by third-party cookies.
While these changes to how advertisers and publishers work can seem daunting, in reality, this is a great opportunity. An opportunity to work with more trustworthy and accurate data. An opportunity to rebuild trust with consumers. And an opportunity to become more diligent and more creative advertisers. We can no longer rest on our laurels activating third-party segments with little understanding of who is included or exactly where this data is coming from. We will need to build relationships with publishers and then reap the benefits of increased transparency with regards to who we are reaching and the effectiveness of the campaign. We will need to truly understand our potential customers and find the right context or publication and reach them with a relevant and enticing offer.