The digital advertising world after the third-party cookies’ collapse

In these uncertain times, Google made its stance on third-party cookies very clear. The announcement was made in February 2020 to phase out the use of third-party cookies within the Chrome browser by 2022. This brings Google Chrome, by far the world’s most popular internet browser used by about 63% of internet users across mobile and desktop, up to speed with Apple Safari and Mozilla Firefox, which represent about 19%. After both GDPR and CCPA forced publishers to rethink consent, the cookie is now a key issue. Privacy concerns have been the biggest driver for change within the industry, now the battle is around anonymity and what that really means. To clarify, the commodity here is internet users’ cookie IDs. Let’s look at what the future of the cookie looks like and what this means for publishers and advertisers.

What is a cookie?

Cookies have been powering the capabilities of digital media since the advent of the internet in the early 1990s. Forming the foundation of the web, every time you visit a website, your browser will store a small text file called a cookie. This cookie contains information about what you do online. The cookie enables online measurement, personalization, customization and targeting. Any personalized recommendation or experience is powered by a cookie. Although there are numerous definitions, a cookie can be broken down into two main ways:

First-Party Cookies

Dropped into your browser by every website you visit. They identify you, understand your on-site behavior and are usually used for analytics, and to provide personalized experiences and tailored recommendations.

Third-Party Cookies

Dropped into your browser by a domain that you do not directly visit yourself. These are integrated into a website that you do visit in a number of ways and look pretty much identical to first-party cookies. The difference is, however, that they are used for various types of cross-site tracking and most importantly – for targeted advertising.

Digital Advertising world after the third-party cookies' collapse

What does this mean for publishers and advertisers?

Cookies have enabled the digital advertising ecosystem to provide tailored publisher content and personalized advertisements. First-party cookies will still be allowed, although third-party cookies will no longer be usable. This makes the opportunity to gather data and provide accurately targeted advertising almost impossible. Here is where anonymity really comes into play as an ID must be attributable in order to identify you. Publishers will need to have greater control over their content and understand what content users are consuming. Advertisers need to find new ways to identify users and understand where these users are.

What does the advertising world look like without third-party cookies?

Google has given the digital advertising ecosystem two years to prepare for the future, with the change planned for 2022. The tech giant has already announced its early iteration of a solution; their ‘Privacy Sandbox’. This will enable advertisers to gather data through a series of APIs and will provide information on conversion and attribution for example. The key difference here is that this data would be held by the browser and accessible through an API. Therefore, it’s not passed and held by a third-party partner, advertiser, data aggregator, or ad safety verification service. Although there are still doubts over whether Google will actually get rid of the third-party cookie, many believe Google will just replace it with an alternative version that enables targeted advertising.

Here are a few strategies for online advertising without the use of third-party cookies to enable the tracking of users’ online behavior in a cookieless world.

IDENTITY SOLUTIONS – A Unified ID

Many Identity solutions provide their own Unified ID, which is only possible if all the players in the digital advertising ecosystem agree. That means publishers, SSPs, DMPs, DSPs, and advertisers need to adopt the same standardized, unique, cookie-based identifier. Although classed as a first-party cookie, the unified ID can be used for third-party cookie purposes which would include personalization, ad targeting, and measurement.

In 2018, the DigiTrust was acquired by the IAB Tech Lab, it was the first neutral ID service of its kind within the industry. As the forebearer of the unified ID, it created a pseudonymous user token and stored it within a conventional cookie that may be read and propagated by DigiTrust members. With a standardized token provided to and used by all parties, pixel syncs became obsolete. Not only did this quicked up the process but also added that extra layer of anonymity. Due to rising costs and competition and despite wide industry support, the DigiTrust was ultimately sunsetted in July 2020.

There are a few approaches to Identity, beginning with Identity Graphs which ultimately creates a database or table of matched third-party cookie IDs from multiple ID providers. In addition, there are Identity Frameworks, which create layers and infrastructure around the collection and matching of IDs. 

There are currently a few main options when it comes to identity that many publishers and advertisers are choosing to work with, these include:

  • ID5– (Unified ID) which uses a matched identity graph from integration with partners throughout the ecosystem ;
  • The Trade Desk– (Unified ID) a huge DSP, offering their highly scalable cookie-based Identifier;
  • Live Intent– (ID Graph) a people-based marketing platform powered by an identity graph that gathers first-party data attached to an encrypted email address;
  • LiveRamp – (ID Graph) a cross-device, identity graph solution, that uses a hashed, people-based identifier, to identify individuals across devices and environments;
  • InfoSum – (ID Infrastructure) an identity infrastructure powering decentralized data ecosystems, offering a unified data platform, allowing multiple parties including publishers to use data by connecting first and second-party data sources without ever having to leave its source, securely matching identities from multiple sources;

The biggest stumbling block for a single Unified ID is the question around independence. In other words, who would have ultimate control of the central ID that everyone would rely on? With ID Graphs that tie identity to know data such as emails provide some protection for ID resolution as actions should be tied to a physical email address. The consensus seems to be using a combination of the above.

First-Party, Contextual Focus

First-Party, Contextual Focus places the power firmly in the hands of the publisher and supply-side of the ecosystem. Consequently, publishers are focusing their efforts on better understanding their own users, providing better services and experiences to them. Advertisers now need to really understand their supply partners as opposed to relying on third-party cookies. The days of anonymous cookie-based programmatic buying at scale will be behind us. There are three areas advertisers can focus on:

Logged in and CRM data; provides publishers with accurate demographic, personal data and a deep understanding of interests and preferences of their users

Contextual understanding; is important for knowing what your content is about and what your content is relevant for. This is vital for attracting not only the right audiences but also the right advertising. Focusing content and tagging pages correctly enables precise targeting capability for advertisers, who can safely target the right audience

Content Partnerships; are on the increase as advertisers identify the right content that is most likely to reach their audience. Advertisers can associate themselves with publishers and environments that are important to their audience.

In conclusion, both publishers and advertisers are preparing for multiple scenarios around what happens next for third-party cookies. Although there is still time for further technical development, certainly, there will be more changes to come before 2022.