Google’s game-changing announcement
As one of, if not the biggest challenge facing the digital advertising industry in recent memory, Google’s plans to deprecate the third-party cookie in their Chrome browser looms large. But given the initial announcement was made over two years ago in January 2020, what has happened since? Where are we at? And how prepared are we for Cookie-Armageddon when it finally comes?
To recap, the decision by Google to phase out third-party cookies was in response to a compounding issue in the industry, with the ever-growing need to better protect the privacy of consumers. In the years building up to, and since the announcement, legislators of Data Protection Laws and Guidelines have exposed the murky and, in parts, nefarious underbelly of the ad-funded internet through the collection, transfer and commoditisation of user data.
“Users are demanding greater privacy – including transparency, choice, and control over how their data is used – and it’s clear the web ecosystem needs to evolve to meet these increasing demands,” read Google’s blog post.
To date, third-party cookies have been the lubricant between the various ad tech companies, vendor systems and supplier pipes, both enabling and smoothing the delivery of relevant ads to individual users in the process we know as programmatic advertising. Fundamentally, cookies and the data gathered from them connect advertisers to their desired audience at enormous scale and at a relatively low cost to achieve marketing and performance objectives.
So if these third-party cookies have been so fundamental to online advertising and measurement over the past two decades, what happens when the cookie finally crumbles in 2023?
Are Google ready themselves?
Chrome browser usage accounts for 64% of worldwide market share as of April 2022, so clearly Google’s move will be a seismic one. However, notable browsers such as Safari and Mozilla Firefox have long since phased out the use of third-party cookies, with the user’s privacy in mind. This has therefore meant that workarounds and solutions have been in development for a number of years to ease the transition, and naturally, (monopolistic accusations aside) Google have their own plans too.
Alongside their cookieless announcement, Google revealed their Privacy Sandbox; a set of technologies to leverage user information without compromising privacy, the most notable of which from a targeting perspective was the Federated Learning of Cohorts (FLoC). This was a system that aimed to aggregate website visitors into groups or cohorts, with these cohorts categorised based on people’s browsing histories, but without making those people identifiable or exposing their browsing histories. Websites implementing FLoC would then request an ad likely to align with the user’s past browsing behaviours. But since testing, FLoC has failed to take flight. Tracking and privacy concerns have seen Google cease development and instead opt for Topics API.
Topics works on the idea that each week, a browser would select five topics per person. This would include one random topic that would obfuscate any bad agent looking to identify that individual, and then choose one topic, or interest category, to assign to that person for the week with ads being delivered based on that outcome. However, like FLoC, Topics is based on the premise of tracking users’ browsing behaviours, so ongoing testing will need to prove that privacy is preserved. It’s not exactly the most reassuring timeline and solution to date from the world’s leading tech giant, with their hand hovering over the third-party cookie life support switch.
Universal IDs take centre stage
However, various alternative solutions have been in development even prior to Google’s announcement two years ago, and the 2023 deadline has certainly sped up the race to develop a viable solution to a cookieless world. These range from collaborative efforts from multiple industry players, to independent solutions from stand alone DSPs to allow the advertiser to continue to identify their target audiences and measure results.
One of the standout solutions is Universal ID. As the name suggests, this solution aims to be the new industry-wide standard, where a shared identity is created for individual users that are used throughout the supply chain without the need for syncing cookies. A number of ad tech companies and consortiums like The Trade Desk, LiveRamp, ID5 and the IAB are working to create these universal IDs across a shared, accessible database for publishers and advertisers to use to replace third-party cookies to deliver relevant ad content.
Universal IDs can be stored in a publisher’s first-party cookies. Once appropriate consent is gained, using a combination of hard (hashed email addresses, login IDs) and soft (IP address, timestamps, URLs) signals, the ID can be linked and matched to larger shared databases.
The adoption of Universal IDs by publishers, advertisers, DSPs and adservers will be key to its success in a post cookie world, allowing for the continuation of current capabilities such as frequency capping, measurement and attribution. As with Google’s Sandbox, there is an element of the unknown and certainly further testing to be done, but at TKF, the tech partners’ adoption of unified ID solutions, and their success, will be a large part of our consideration of who we work with for the remainder of the year and into next.
What else can be done?
Outside of Universal IDs and Google’s Privacy Sandbox, other considerations that will help us navigate a new cookieless environment are slightly less advanced, but require no less testing and learning.
First-party data will be king.
Advertisers who leverage comprehensive CRM strategies and technologies, and best understand their customers will be in the greatest position to activate targeted campaigns and enter cooperative relationships with publishers and data partners, who themselves will have the richest sets of data about their on-site visitors. This second-party data, and the mutual benefit of ‘sharing’ consented first-party customer information in a partnership agreement is a substantial opportunity.
Google are naturally the biggest holder of first-party data from all their offerings that require the user to be logged in. The overall benefit of using their tech stack and their privacy sandbox remains to be seen from a targeting and measurement perspective, but the wealth of data is as enticing as ever. Similarly, internet giant Amazon also has a DSP we can access to leverage their data across their networks. In our media buying capacity, TKF will be looking for the best fits, quality and value when working with publisher and tech partners. This will also be the case when utilising contextual targeting.
Contextual targeting will be another fundamental workaround in the cookieless future.
Using non-personal information such as the when, where and what a user is browsing rather than who they are specifically. For example, a running shoes company would look to deliver their ads against content about fitness and sport, under the assumption the reader is an active individual. Although broad-stroke and quite presumptive, contextual placements have proved to be effective for many of our clients, as a tactic we use often in our programmatic campaigns.
TKF is getting ready for cookieless
The cookieless world will impact EVERYONE. As much as we would like there to be a ‘silver bullet’, the industry is still in a test and learn phase which is frustrating to buyers, sellers, brands, agencies and tech partners alike. However, at TKF we are keeping as up to date as possible with industry developments, with our DSP and supplier partners, and continuing to develop our own testing frameworks with the options available. This will allow us to be in the best possible position to utilise programmatic advertising for our clients for the rest of 2022 and into a new age in 2023.
By John Downs, Senior Programmatic Account Manager