Safari and Firefox have already led the way. Google Chrome will follow until 2024. That's when the end of third-party cookies will come for the most widely used web browser in the whole world. No question – this is going to change the whole industry. After years of data collection mania, online marketers must now ask themselves: How do I reach my customers without third-party cookies?
Spoiler: There’s no need to worry. Just grab a coffee, sit down, relax, read this blogpost and you will understand what the buzz is all about and with what alternatives you are going to manage the post-cookie world for sure.
The love-hate-relationship with third-party cookies
Third-party cookies are an essential pillar of the advertising industry. And people either love or hate them. There’s not much in-between. Why is that? Because third party cookies are cookies that are not set by the website you are currently on, but by a so-called "third party". For example, this may be the third party cookie of an advertiser. This cookie enables the tracking of a user across websites, such as the length of stay or the clicking on links. In this way the user's surfing behavior is documented and a personalized user profile with his demographics is created. It's the basis for personalized experiences and used for targeting online marketing measures. Therefore cookies are a great asset to help marketers not only improve users’ web experience but also the advertisements and content displayed based on their interests.
The downside of all this is that users have little transparency about how their data is used – this is bad for user trust in the companies involved. Therefore, the growing awareness among users of the need to protect their privacy and government regulations such as the General Data Protection Regulation (GDPR) have been increasing the pressure to impose restrictions in this area for years. And they were successful. Because now the abandonment of third-party cookies is just around the corner.
So … cookies are dead for good? Naah! Not all of them
"Cookieless"is a popular term to describe the future of digital marketing. But strictly speaking, it is simply wrong. Because: Only third-party cookies will vanish. First-party cookies are still around and can be used to collect data. First-party cookies are set by the website a user is currently browsing. Since they are stored locally and are not passed on to third parties, they enable personalization of the content on that page and comply with data protection requirements. At the same time, they are not blocked by browsers and therefore offer available source of information for marketers while providing a high level of transparency for users.
Therefore, in a "cookieless" future marketers will not only have to increasingly rely on first-party data they will also need to find new ways to identify and reach their audiences. Recent research by the IAB shows just how important this is. Because they found that publishers could lose up to $10 billion in advertising revenue if third-party cookies are eliminated. In addition, Google reports that without a new approach to audience data, publishers could lose 50-70% of their revenue. The most significant challenge however will be how to target ads without cookies. Another challenge is to measure advertising effectiveness without cookies. In other words: We have to find new ways to track conversions and optimize campaigns.
Good news: Various third-party cookie alternatives are already available
The advertising industry has not been idle. It has been testing alternatives to third-party cookies for quite some time now. These alternatives allow advertisers and publishers to target users with identity solutions, cohorts and contextual targeting instead of third-party cookies. Therefore they can help to serve more relevant ads to users. But you know what? Before we go on talking, let's just take a closer look at some of the most common alternatives.
1. Identity solutions use first-party website cookies and permanent user identifiers like email adress, phone number or login ID to track users. But to protect the user's privacy personal information is encrypted or hashed.
Pro: The created ID is a universal identifier that can be used across websites, other channels and platforms.
Con: The main limitation of identity solutions is scale. It requires thousands of publishers and advertisers to systematically collect and share user data.
2. Privacy Sandbox is a solution provided by Google. Application programming interfaces (APIs) such as FLoC, SPARROW, Turtledove, FLEDGE, Dovekey and Topics are designed to replace cookies and help advertisers get data.
Pro: Advertisers will be able to receive data on conversions, ad targeting, attribution, federated logins and to prevent spam, fraud and DoS.
Con: It’s still in development and until now it’s not clear which features will be included and how the platform will be used.
3. As already mentioned the collection of First-party data and the implementation of Publisher Provided Identifiers (PPIDs) will be critical for publishers to receive higher CPMs. If they set appropriate measures they can share PPIDs with demand partners through ad manager.
Pro: This enables advertisers to deliver personalized ad campaigns in a privacy-first way and allows publishers to build custom audience segments, deliver campaigns via traditional reservations or programmatic guaranteed deals and improve their ad revenue by serving relevant ads to users.
Con: Publishers have to find ways to encourage users to register and log in on their websites.
4. Data Pools or Data Clean Rooms are a repository for storing huge amounts of user data. To ensure user privacy they are independent from publishers and advertisers. Publishers can upload or match first party data from their side. Advertisers can do the same from the other side.
Pro: Advertisers can get insights about their audience from the publishers and place targeted ads.
Con: Similar to identity solutions, the disadvantage of this solution is that it requires scale. Many publishers and advertisers would have to collaborate and share user data.
5. User Identity Graphs bring Personally Identifiable Information (PII) such as an email address together with non-PII like 1st-party cookies and publisher IDs.
Pro: Cross-channel and cross-platform tracking and targeting is possible.
Con: These solutions are hard to develop and deploy without accidentally compromising privacy.
6. Digital fingerprinting identifies users by recoding their IP, plugins, operating system, browser, screen size and time zone. It gathers information from the user's browser as the user surfs the web or through third-party apps the user has installed on his device.
Pro: Digital fingerprinting allows to gather data on the daily activities of the user. This comes with rich, specific information about what a user is interested in and where he is using his device. Fingerprinting also helps to track users across platforms and websites.
Con: It is very difficult to detect or block. As a result, there may be privacy concerns and that is exactly what new solutions are supposed to prevent.
Much is still unclear, but waiting and drinking tea is not an option
Right now you are probably thinking all well and good, but which solution should be choosen? We’re sorry, we can’t tell you that. Currently there’s no best best option from the pack. Even Google is having a hard time finding the perfect solution. You can see that in Federated Learning of Cohorts (FLoC), their controversial project for replacing cookies for interest-based advertising by instead grouping users into groups of users with comparable interests. About a year ago they announced they have to bury the FLoC initiative and they replaced it with another approach due to privacy issues. This shows that most alternatives for the "cookieless" future need time to develop their full potential. Nevertheless publishers and advertisers shouldn’t put their hands in their laps and do nothing. You should rather start to get to know and try out the different alternatives.
We like what you like and are ready no matter what is happening
And while doing so you should know that we at ConnectAd make it easy for you. We support all existing and future identity solutions that match users to ensure flexibility, independence and monetization for you. We don't prefer any specific provider. We think that there are many really good identity solutions on the market, are fine with all of them and willing to cooperate. Means: We like what you like!
Nevertheless, we still have a tip for all publishers who use PreBid. Consider to use PreBid Shared ID! In our opinion this is the best and also a fast way out of the whole dilemma because with PreBid Shared ID you can match first-party data with users effortlessly instead of using third-party cookies.
You have questions regarding this whole topic? You want to monetize your traffic efficiently? You want to be prepared for the "cookieless" future? Feel free to contact us – we are here to support you and ready to help you make some money
