In a previous post, we wrote about Google’s plan to retire the 3rd party cookie inside the next 2 years. While we can speculate over Google’s motivation, it’s also worth considering how the rest of the industry is reacting to this news...
Ending 3rd party cookies is a win for consumer privacy, and almost certainly also a win for Google. But, how will the rest of the ad industry be impacted? Some areas are clearer than others.
For example, some data management platforms (the warehouses that have been hoovering up cookie IDs and other data to better target consumers) are facing an existential crisis if they rely heavily on cookies (which many do).
Similarly, companies that specialise in retargeting (showing you an ad for a product that you previously viewed) will find it tricky to continue without a cookie to monitor consumers across their browsing activity.
For publishers, it’s less clear. Google conducted its own research to predict how much revenue publishers might lose if 3rd party cookies disappeared tomorrow - forecasting a 50% decrease.
Facing this cliff edge, noise has increased around several potential solutions: contextual ads; 1st party data and authentication; and universal identifiers. However, all of these options have challenges.
Google’s post-cookie revenue warning gives a view on what might happen if a publisher switched from targeted ads to contextual in today’s market. In general, however, contextual ads have room for innovation and are likely to improve over the next 24 months as adtech firms seek to capture ad spend no longer flowing to cookie-based targeting.
While part of the post-cookie solution, contextual ads are not a panacea. From the advertiser’s point of view, GDPR compliant contextual ads will have issues with frequency capping (controlling the number of times an ad is seen by one individual), conversion (tracking if a user clicks the ad and then, for example, completes a purchase), and optimising this type of campaign can take more effort and expertise.
Authentication and 1st party data
With 3rd party cookies ending and further privacy laws looming, there is a growing focus on 1st party data solutions (see the New York Times). This reaction is understandable, as publishers have a direct relationship with their consumers’ and so key regulatory requirements are more easily met (like consumer consent).
Requiring a user to log in is a far better way of capturing a consumer’s consent (as opposed to users mindlessly accepting privacy policies) and allows publishers to collect and store both contextual and behavioral data. This 1st party data can then be used for accurate advertising on the publisher’s website.
While this might be a solution worth exploring for huge publishers, it’s less viable for smaller players. Not all websites have the clout to persuade users to log in and, even if they do, the scale and quality of their data is unlikely to command the same price as current cookie-based targeting.
Universal IDs (lipstick on a pig) 🐷
For some, the death of the 3rd party cookie is an opportunity to design a more effective, unified (and in some instances terrifying) system of identifying consumers online. Elements of the adtech community have been frustrated by the fragmented, siloed system that developed around cookies, and, somewhat incredulously, they believe there is consumer demand for a 'more tailored online experience’.
Solutions like the IAB’s Project Rearc and LiveRamp’s Authenticated Traffic Solution (ATS) seek to build an identity around email addresses with encryption used to preserve privacy on the web, with tracking and identity resolution taking place elsewhere.
Despite possible good intentions, it is highly unlikely that these solutions will meet regulatory requirements - failing against the principles of transparency, purpose limitation, and, potentially, confidentiality if the email identifier was ever tied back to the user. Given that regulators have started on their privacy crackdown, and the industry is facing a restructure, it is likely wishful thinking that settling on a moderately improved system will be acceptable.
Privacy and Personalisation?
No silver bullet, it seems. So, can privacy and targeting ever be compatible? At Glimpse, we would argue "no", within the current programmatic system. However, emerging technologies allow an opportunity to reimagine advertising, with precise targeting but complete consumer privacy - we have a chance to do things better.
At this key moment of flux, the industry must not compromise and graft quick-fix solutions. Glimpse is beta testing a novel platform that allows brands to reach accurate audiences, without ever handling the underlying personal data.
To find out more …