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The End of Third Party Cookies and Its Impact on Personalization

Ad-Lib.io
on
Mar 5, 2021
AdThink Blog

Why Ad-lib.io Is the Future-Proof Way To Scale Your Digital Advertising

This is an evolving subject to write about, as nearly every day there is a new announcement out about how the deprecation (read, elimination) of 3rd-party cookies is going to affect advertisers, publishers, and ad-tech vendors. We’ll do our best to update this post as the latest changes emerge. 

There is a lot being said about the “death of cookies” as Google and Apple remove support for 3rd-party cookies from their Chrome and Safari browsers. This is a big shift in the way advertisers identify and track consumers on their own sites and across the internet, so the changes to digital advertising are substantive. But the true impact is confusing, so let’s answer some of the key questions here. 

Why are cookies going away? 

Starting in the middle of the last decade, there has been a move to protect consumer privacy, particularly as it relates to advertising and data collection to support it. You will have seen, as a result of a European regulation called GDPR, a request on every privacy-complaint website asking you to confirm that you consent to the use of cookies in total or in select form when you first land on that page (and often every time you land on that page). 

In response to GDPR and other privacy legislation, Apple and Google have taken steps to remove 3rd-party cookie support from their browsers. It's important to note that this is only for cookies placed on sites by others (hence “3rd-party”) but doesn’t impact the beneficial experience of 1st-party cookies, those that make logging in and filling out certain forms a better experience for consumers. 

An example? When you visit Amazon.com, your log-in information for Amazon remains intact. But if you visit a site like The Guardian, they can only maintain knowledge of who you are if you log into the platform, and then only know what you do on their site. If you go from Amazon to The Guardian, they won’t know you are the same person and target ads based on that. Similarly, Apple and Google are removing some support for device- and IP- based identifiers

What solutions are people considering that protect privacy but continue to provide relevant advertising? 

There are a number of new initiatives to help solve the problem of identifying a consumer across devices in this new post-3rd party cookie environment. Let’s separate them out here. 

Google Flocks to FLoCs

Aptly named to reflect the aggregation of data at the cohort level, Google's FLoC (Federated Learning of Cohorts) will allow marketers to target consumers at a less granular level than before. In the past, Google allowed targeting across devices even though no information was exchanged. The call for an ad used consumer data based on cookies placed on sites other than Google (hence “3rd-party”). 

In their most recent announcement, Google agreed neither to allow others to sell ads based on anything more specific than this cohort-level abstraction, nor will they allow the use of other cross-site or cross-device identifiers that are being developed by The Trade Desk and others (see below). Google claims they are doubling down on their Privacy Sandbox, keeping the targeting of consumers further protected (though they are still able to target based on 1st-party data created by visits across Google properties like search and YouTube). 

Apple Already Cored the Cookie

Apple and Firebox were the first to move away from the cookie in their browsers. Apple has received renewed attention as it relates to the mobile equivalent of cookies, their IDFA, which we wrote about here

Other Data Providers Offer Identity Solutions of Their Own

Data providers who work closely with marketers or media networks have been working on alternative identifiers to the 3rd-party cookie, including Unified ID 2.0 (developed by The Trade Desk) and LiveRamp’s ATS. They attempt to associate online behavior with a piece of first-party data like an email address, making addressable advertising possible — at least for those individuals who have somehow made themselves known, typically through a log-in on a publisher site. 

In order to be vendor-agnostic, The Trade Desk recently handed future development of the Unified ID to Prebid.org, which created a privacy-compliant universal ID called SharedID for all publishers and vendors to conform to. 

What does this mean for Ad-Lib.io Advertisers? 

In light of the removal of the cookie in the future, Google's been working on a Privacy Sandbox initiative, which is a suite of experimental tools designed to ultimately replace all useful bits of cookie functionality, in a privacy-compliant way.

One of the more important aspects of cookie-based functionality is the ability to target users according to their browsing behavior, so that we can target them with relevant messaging. While Ad-Lib.io is not actually responsible for the targeting itself, it's important for us that the platforms that are responsible (DV360, etc) are able to do this.

As we near the end of this cookie-based mechanism for targeting digital advertising, we looked at campaigns that clients run with Ad-Lib.io. Here’s what we found:

  • Personalization is very much an upper-funnel awareness activity, which means the ads are customized to appeal to certain attributes, but in order to serve reach metrics, they are typically not 1:1 messages. 
  • In the mid-funnel, we see marketers advertising at the promotional level, which includes maximizing the use of creative assets for the best results, but still not at the level of, say, a pair of shoes following you around the internet after you leave Zappos or a similar site. 

In other words, while it is true that using cookies as a mechanism for 1:1 messaging is going away, there will continue to be more privacy-compliant solutions that will allow us to continue personalizing creative in a much more nuanced way than broadcast TV! The creases continue to be ironed out by the likes of Google and Facebook, but from an Ad-Lib.io perspective, we are confident that we are integrated with the right platforms to be able to capitalize on the best targeting in the industry.

Meanwhile, we await news on how the other aspects of the Google Privacy Sandbox (Turtledove, etc.) are shaping up. These are looking to solve other problems such as supporting third-party data and attribution.

If you want to learn more about how to produce and optimize your most relevant ad content in a post-cookie, contact us at https://www.ad-lib.io/contact-us.

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