Digital advertising in a cookie-less world

Third-par­ty cook­ies have been the bedrock of dig­i­tal adver­tis­ing since the late-1990s. For more than two decades, they have allowed adver­tis­ers to fol­low inter­net users across the web and tar­get them with ads, giv­ing unique insight into how audi­ences behave in a way oth­er forms of media sim­ply can­not do. But this has, many feel, been at the expense of people’s pri­va­cy online.

Google’s dead­line to remove third-par­ty cook­ies from Chrome by the end of this year is fast approach­ing and the media indus­try is on the precipice of one of the sin­gle biggest changes to dig­i­tal adver­tis­ing in its his­to­ry. The foun­da­tions on which dig­i­tal adver­tis­ing is built are crum­bling. 

With less than a year to go, ques­tions remain over how pre­pared the indus­try is, who stands to ben­e­fit and what a “pri­va­cy-first” future might look like.

Race to evaluate

While Google con­tin­ues to wran­gle with adtech ven­dors and work­ing groups about what a cook­ie-less future actu­al­ly looks like, pub­lish­ers are try­ing to work out what it means for their bot­tom line, while adver­tis­ers fig­ure out how to plug the cook­ie-shaped hole left in their dig­i­tal mar­ket­ing eval­u­a­tion strate­gies. It feels like there is some way to go.

Cru­cial­ly, adver­tis­ers need to devel­op new eval­u­a­tion tech­niques to ensure their view of the con­sumer pur­chase jour­ney is not lim­it­ed to the last click. 

“This is a big prob­lem because some types of adver­tis­ing are more like­ly to be the last click than oth­ers,” says Dr Grace Kite, founder and man­ag­ing direc­tor of con­sul­tan­cy Gra­cious Eco­nom­ics. “With­out cook­ies, adver­tis­ers are at risk of being mis­led into think­ing that the end-of-jour­ney type is more effec­tive than it real­ly is.”

Retail brand Made.com is think­ing about how to expe­dite its invest­ment in mod­el­ling in a way that will enable it to under­stand rela­tion­ships and make media mix or opti­mi­sa­tion deci­sions.

“While the depre­ci­a­tion of cook­ies chal­lenges the abil­i­ty to per­son­alise and mea­sure dig­i­tal media, it does not chal­lenge the val­ue of the medi­um itself,” says Made.com’s per­for­mance mar­ket­ing direc­tor Matt Polling­ton.

“Impor­tant­ly, mar­keters will need to invest in tal­ent and work with part­ners who enable them to lever­age their first-par­ty cus­tomer and behav­iour­al data insights to get the best out­comes from their media and dig­i­tal adver­tis­ing.”

Control, context and collaboration

As pub­lish­ers and adver­tis­ers seek to regain con­trol of their first-par­ty data and increas­ing­ly build their own walled gar­dens, adver­tis­ers will need to learn to reframe their under­stand­ing of effec­tive­ness in terms of under­stand­ing audi­ences are still valu­able even if they can­not mea­sure them in the same way.

“The biggest chal­lenge is around reset­ting expec­ta­tions because we have come so far along the road in using third-par­ty cook­ies that we have expec­ta­tions of what dig­i­tal adver­tis­ing deliv­ers com­pared to oth­er media,” says IAB UK’s head of adtech Tina Lakhani. “Right now it’s fair­ly con­sis­tent in what you can do and expect in terms of report­ing and mea­sure­ment across the ecosys­tem. 

“In future it will be around under­stand­ing the nuances of work­ing in dif­fer­ent envi­ron­ments and form­ing the right strat­e­gy and mea­sure­ment approach off the back of those.”

In line with the shift towards sub­scrip­tion mod­els and logged-in envi­ron­ments, con­tex­tu­al adver­tis­ing will con­tin­ue to gain pop­u­lar­i­ty as a pri­va­cy-friend­ly, brand-safe way for adver­tis­ers to work with pub­lish­ers to reach niche audi­ences in qual­i­ty envi­ron­ments and in an increas­ing­ly per­son­alised way.

The indus­try was issued a stark warn­ing last year when a study by the Incor­po­rat­ed Soci­ety of British Adver­tis­ers found 50 per cent of the mon­ey adver­tis­ers invest in pro­gram­mat­ic adver­tis­ing nev­er reach­es online pub­lish­ers. A nation­al news­pa­per inves­ti­ga­tion pre­vi­ous­ly found adtech busi­ness­es were extract­ing up to 70 per cent of adver­tis­ers’ mon­ey with­out being able to quan­ti­fy the val­ue they pro­vide to the brand.

An inter­net with­out third-par­ty cook­ies gives adver­tis­ers and pub­lish­ers a cru­cial oppor­tu­ni­ty to col­lab­o­rate to under­stand their audi­ences bet­ter and build a sus­tain­able inter­net where every pen­ny spent is account­ed for.

Privacy, competition and walled gardens

Google’s Pri­va­cy Sand­box alter­na­tive to third-par­ty cook­ies is already being crit­i­cised for not being as pri­va­cy-friend­ly as Google would want you to think, giv­en it will pro­vide Google with more direct­ly iden­ti­fi­able, per­son­al infor­ma­tion about its users.

It is impor­tant to remem­ber that Google’s for­tunes are tied to online adver­tis­ing, so it is not in Google’s inter­ests to break how online adver­tis­ing works.

Joseph Evans, head of tech at Enders Analy­sis, says there are a few key things Google is inter­est­ed in stop­ping, which are the “leaky bits” of the data econ­o­my that allow peo­ple to be pro­filed or tracked with­out their con­sent.

“The pro­pos­als will put a stop to that but [Google] is not inter­est­ed in stop­ping the whole prin­ci­ple of being able to serve ads to peo­ple based on who they are or what they’ve been doing online,” says Evans. “If you see the pri­va­cy harm as con­sist­ing in that prin­ci­ple of online adver­tis­ing, you won’t be sat­is­fied with what Google is doing.”

Giv­en Pri­va­cy Sand­box will effec­tive­ly cre­ate a Google-owned walled gar­den, the Com­pe­ti­tion and Mar­kets Author­i­ty is cur­rent­ly inves­ti­gat­ing whether this will cause adver­tis­ing spend to become even more con­cen­trat­ed on Google’s ecosys­tem at the expense of its com­peti­tors.

Changes like this do tend to con­cen­trate the mar­ket fur­ther and the big­ger play­ers that already have strong media fun­da­men­tals, those with high usage, mas­sive reach and first-par­ty data, will almost cer­tain­ly be hurt to a less­er extent than small­er pub­lish­ers on the open inter­net.

Ama­zon stands to emerge from this in an espe­cial­ly strong posi­tion from an adver­tis­ing point of view, giv­en every­thing hap­pens with­in its walled gar­den. Face­book and Google are increas­ing­ly mak­ing sim­i­lar moves to try and bridge the gap between an advert and sale so users nev­er have to leave that envi­ron­ment. We can be cer­tain this will only inten­si­fy as the fight for data in a cook­ie-less era goes on.