Until 2022, when support for third-party cookies across the web ends, programmatic advertising and marketers will continue to rely on them for personalized user data.
However, they will also need to make adjustments and preparations for the inevitable changes that will arise in the new cookieless world.
Programmatic advertising is the most common way that digital advertising is currently transacted.
Advertisers and publishers use programmatic targeting and tracking to identify online users and consumers quickly and efficiently.
Third-party cookies provide buyers and sellers an enormous amount of information around which they can form effective marketing strategies.
Since 2014, Apple, Safari, Firefox, GDPR, CCPA, and many other initiatives have been slowly chipping away at advertising campaigns reliant on third-party cookies.
It is estimated that 40% of all ad inventory is already cookieless. Most recently, the decision by Google to stop supporting third-party cookies on Chrome starting in early 2022 will provide a lethal blow to what is left.
Since third-party cookies have been the backbone of programmatic advertising for over a decade, the marketers that rely on them will need to adjust how they target and measure their campaigns.
Programmatic Advertising Is Already Weaning Off Third-Party Cookies
Over the course of the past decade, site users have grown increasingly weary of what they see as intrusive ads and non-transparent uses of the data collected about and around them.
In turn, this has lead to more and more tightening controls around how data is collected and shared for advertising purposes.
In the mid-2000s, ad blockers were created. These prevent AdTech companies’ headers from loading on a page, meaning they can’t create third-party cookies.
A 2020 report found that roughly 763 million monthly active users have ad blockers on their mobile devices and desktops.
In 2015, Safari allowed iOS users to install content blockers.
In 2017, Safari introduced a new privacy feature called Intelligent Tracking Prevention (ITP). This feature automatically blocks third-party cookies and controls the length that certain first-party cookies and other stored data remain viable.
In 2018, the EU introduced the General Data Protection Regulation (GDPR) as the world’s most robust set of data protection rules. These rules regulate how people can access users’ personal information and limit what organizations can do with that data.
1n 2019, Firefox followed Safari’s example by blocking third-party cookies by default.
In 2020, California rolled out California Consumer Protection Act (CCPA), and other states are now drafting similar initiatives.
This month in 2021, iOS rolled out v14.5, which provides Apple’s App Tracking Transparency Framework (ATTF), which requires apps to obtain user consent before sharing data with apps or websites outside of their ecosystem.
The Final Straw
Google’s recent decision to stop supporting third-party cookies on Chrome starting in early 2022 will provide the final blow to the third-party cookie.
Once Chrome support is gone, advertising technology can no longer count on pervasive third-party cookie use to efficiently target and track their campaigns.
What’s more, these cookies are typically used to power several essential programmatic advertising processes like header bidding.
Header bidding is a leading technology that has driven publisher revenue gains in recent years.
In a world without third-party cookies, new header solutions will need to be found. Marketers will also need to focus on finding suitable alternatives that allow them to spend efficiently instead of spamming blindly.
There are several solutions in the works, and advertisers are actively testing and tweaking these solutions to meet their marketing needs.
We know there won’t be just one solution, nor will there be 100, so now is the time to test and scale the solutions with the most promising returns.
While there are many solutions in the works, we can break them down into three main categories: First-party data and addressability, Cohorts, Contextual.
Nurture First-Party Connections and Addressability
Developing strong connections with customers has always been critical for marketers and becomes even more crucial in a privacy-first world.
As a result, marketers will need to strengthen their first-party data collection methods through increased subscriptions and other paid-for-media. In addition, they will need to invest in new and optimized existing data capturing techniques.
They will then need to find the publishers who are doing the same on their side to match their hashed data.
Here, there are many personal identifier solutions in development, such as Liveramp, iD5, The Trade Desk Unified ID, Shared ID by Prebid, etc. The IAB’s Project Rearc is actively meeting with industry leaders to help define transparent rules and best practices for moving forward in a privacy-first world.
These steps will help ensure a hefty cache of robust data for personalizing and targeting users who have previously engaged with your brand. In addition, building up data volumes will be crucial for future trading of this valuable currency.
Thus the ID solution providers are actively working with advertisers and publishers to increase their scale before the cookie demise.
Cohorts, Flocks and Other Birds
Google Privacy Sandbox
Google has pledged their continuing support for first-party relationships on their ad platforms for partners who have direct customer connections. Brands and publishers that bolster these direct relationships will have additional Google support.
- Ad targeting. The three primary methods for ad targeting will be interest-based targeting, remarketing, and contextual and first-party data. These methods will not contain unique identifiers.
- Ad conversion measuring. The two APIs that programmatic marketers will be able to use to receive data about click-through conversions and ad campaign reports won’t contain any linkable identifiers to a user’s ad view or click behavior.
Google’s Federated Learning of Cohorts (FLoC)
The technology behind Privacy Sandbox, Federated Learning of Cohorts (FLoC), proposes interest-based advertising as an alternative to third-party cookies.
This type of advertising focuses on cohort advertising—that which targets a broad audience who share similar interests—with relevant content and ads. As a result, individuals are effectively hidden by the group, and their web history is kept private in the browser.
In this model, the premise is that groups of people with shared interests could start replacing individual identifiers.
Early data from Google reports that this method can deliver results nearly as effectively as cookie-based methods. As a result, Google believes that technologies such as FLoC, combined with other measures, are the future of web advertising.
Fledge by Chrome
At the same time, Chrome published FLEDGE, a new idea that uses a privacy-compliant server for storing ad campaign bids and budget information. FLEDGE is scheduled for trial in late 2021 and will offer programmatic advertisers the opportunity to test the API using their own server.
Google also believes marketers should focus efforts on helping ad buyers determine the true value of the ads before they bid. In addition, Google will get trial feedback from industry stakeholders to ensure that auctions run smoothly even without third-party cookies.
Naturally, these solutions are optimized for performing well in the Google ecosystem. However, there are also solutions outside of Google as well.
Microsoft recently proposed a solution that offers users the ability to see which Cohorts they are associated with and decide how and where their data is shared.
Parakeet works in the Microsoft Edge browser, but their hope is that it will be adopted more widely across other browsers as well.
Advertisers can still rely on contextual solutions.
These rely on information gathered by keywords and site content to personalize ad campaigns. While they can help with targeting, they cannot help with performance tracking, so they are a solid but incomplete solution.
IAB category tagging, vertical identification, and page content scans can provide relevant information on what users are interacting with and reading.
Look for advances in these technologies in ongoing tests from Permutive, Integral Ad Science, and others.