How Cookie Changes Are Going To Impact The Programmatic Ecosystem

Google has announced that it’ll block third-party cookies from Chrome in the next 24 months. Practically, this will mean a huge change in how advertisers collect user data and target audiences. That’s because Chrome controls more than 70% of the desktop browser market.

Source: StatCounter

This announcement brought about an obvious question: how is it going to impact programmatic advertising and buying third-party data audiences, which primarily are based on cookies at present?

The positive aspect is that Google has given a time limit now and we can prepare for the future. The importance of targeted advertising is not going to fade any time soon. Therefore, the future is expected to bring in new techniques that’ll substitute the need for third-party cookies in constructing audiences.

At Eskimi, we think this announcement will shift the focus more on advertisers’ own data sources – known as first-party data – that’s easier to scale and use. Google has assured that it won’t delete cookies until there are other methods to target advertising and evaluate performance. That’s where marketers and technology producers converge to think, and collaboration will definitely be required.

In this article, we’ll take an in-depth look at why Google is going cookie-less and what it is going to mean for the programmatic ecosystem.

Let’s get rolling.

Why Is Google Depreciating Third-Party Cookies?

Google’s primary reason behind depreciating third-party cookies is that users today are demanding better privacy, which includes transparency, choice, and control over how their information is utilised. So they believe the web ecosystem must evolve to fulfil these growing demands.

Google has specified that they’re creating a solution that’ll result in the decline of third-party cookies completely by 2022. As indicated in their statement:

“After initial dialogue with the web community, we are confident that with continued iteration and feedback, privacy-preserving and open-standard mechanisms like the Privacy Sandbox can sustain a healthy, ad-supported web in a way that will render third-party cookies obsolete.”

Google also showed its contempt for the way WebKit has handled third-party cookies by blocking them out-and-out. It believes this will have unpremeditated outcomes that can destructively influence both customers and the web ecosystem.

What Does This Mean For Advertisers?

Advertisers must take privacy seriously. It wouldn’t be wise to seek quick fixes to retain your data for another few months as it’ll defy browser standards that are only going to continue to get more challenging.

However, Google appears to be taking a more well-adjusted methodology by not completely evicting the cookies straightway (clearly with their self-interest in mind).

Generally, there are some important challenges facing advertisers as the use of the cookie alters:

Ad Platform Tracking and Attribution

The cookie changes will restrict cross-site tracking. Google is highly unlikely to do anything that will influence Google Ads or DoubleClick tracking conversions. But it’ll indeed disagree with third-party advertisers.

You can already see Search Ads 360 (SA360) and Google Marketing Platform (GMP) using probabilistic modelling for conversion tracking since August 2019.

Audience Identity for Remarketing, Reach, and Frequency

You will require other indications for both targeting and understanding reach and frequency by restraining third-party cookies. The challenge of reach and frequency is much bigger as, though you can recognise an in-market person, how are you going to know if they’re unique or have already viewed multiple ads from a specific brand?

Google is working on a probabilistic methodology to fix this issue as well and you may observe more probabilistic data in the future. This will perhaps generate more data incredulity and misperception around what’s correct and what isn’t when defining the influence of advertising campaigns.

Influence on Programmatic Advertising Platforms

Although the existing condition of the stock market is very intransigent, the long-term position for companies that depend profoundly on third-party cookies doesn’t look good. Certainly, it’s perhaps the duopoly of Google and Facebook that’ll essentially fortify because of these privacy changes.

Here’s a chart showing how The Trade Desk, Criteo, Rubicon Project, and Telaria stock performed after Google announced that it is blocking third-party cookies within two years.

Source: Twitter

Overall, it’ll be challenging for companies to stay on top of their advertising game as more and more browsers are making variations to their cookie-related policies and technology.

Does the Cookie Apocalypse Mean The End of Advertising Game?

Of course, not!

Cookies aren’t the only essential you need for digital marketing. They were initially created in 1994, and even though they’ve grown suggestively since then, there are other web tracking tools accessible such as:

Fingerprinting

The user agent string was initially intended to help web browsers render sites properly for particular user settings. Using this string, many platforms have exclusively identified user browsers via a method called fingerprinting.

Fingerprinting is an approach to probabilistically identify a user without cookies by joining a series of signals that can help recognise a unique customer and assign that customer a hashed user ID. These cookie-less signals can be devices, operating systems, browsers, IP addresses, time zones, and language settings.

Along with Google’s cookie updates, they stated they’ll depreciate Chrome’s user agent string as well. The company is actively pushing back fingerprinting from both a technical and statutory standpoint. As per Google, fingerprinting is an intrusive hack to substitute cookies that can essentially decrease consumer privacy and control.

Mobile Advertising ID

Mobile advertising IDs have been around for a number of years as a method to track in-app users where cookies are unavailable. However, there are particular policies implemented around mobile advertising ID users that include:

  • Businesses are forbidden from making perpetual connections between users and mobile advertising IDs.
  • Users can change their IDs.
  • If an ID is removed, the data must be removed.

You’ll perhaps hear a lot more about mobile advertising IDs moving forward and their developing role in the online advertising environment.

Contextual Advertising

Contextual targeting is growing in importance as the content is an alternative to consumer interests. Contextual advertising is significant as it doesn’t rely on any type of cookies. It uses keywords and phrases on a web page, totally excluding dependence on customer data.

As per a GumGum report, contextually relevant ads produce 43% more neural engagement. In reality, customers recollect contextual ads 2.2x better than other advertisements.

With the forthcoming third-party cookie apocalypse and its influence on programmatic proceeds, publishers are shifting their emphasis to contextual advertising.