Third-party cookie data have enabled advertisers to provide contextually relevant, native advertising across the internet. However, privacy issues around cookies have driven public concern and scrutiny by regulators. In response, Safari and Firefox are currently blocking third-party cookies, and Google Chrome will follow suit by the end of 2023.
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Already under heavy scrutiny around privacy, Google finds itself in a double bind because cookie elimination will potentially cause economic harm to businesses that rely on third-party cookies. The impending changes will impact not only publisher revenues, but they also raise further antitrust concerns, potentially giving Google increased power over an industry where they control a great deal of first-party data and capture a large amount of ad spend.
So, What Happens When the Changes Do Come?
Cookies have existed since the start of the consumer internet, and the benefits of cookie data have spurred the ad tech industry’s growth around them. However, a push towards privacy in recent years presents potential future problems for publishers, marketers, ad tech companies, and agencies. Marketers will lose some of the effectiveness gained through programmatic and data targeting, and it is now critical that industry players understand the challenges associated with eliminating third-party cookies.
Google recently abandoned its initial approach to the cookie-less future, called Federated Learning of Cohorts (FLoC). Despite being designed to enhance privacy, FLoC would have potentially introduced new concerns, including its likely non-compliance with the European Union’s General Data Protection Regulation (GDPR).
FLoC has been shelved and replaced with Topics, a new “Privacy Sandbox” proposal for interest-based advertising.
The Topics API determines users’ interests based on browser history.
According to Google, “Topics are selected entirely on your device without involving any external servers, including Google servers. When you visit a participating site, Topics picks just three topics, one topic from each of the past three weeks, to share with the site and its advertising partners.”
Google further states that Topics – which is browser-based – enables “meaningful transparency and control” over data and end users to constrain advertiser access. Google further states that the Topics API is more private because it “reduces the risk of fingerprinting,” “provides more human-understandable transparency,” and “continues to avoid sensitive categories” to protect users.
In addition to Google’s revised proposal, sophisticated ad tech firms have already begun to develop technical workaround solutions that maintain the privacy of internet users while enabling advertisers to reach key audiences. These efforts have been driven by previous changes to non-Chrome browsers and in anticipation of potential changes by Google and/or regulators.
Firms like mine have also developed alternative solutions, such as implementing the buildout of information that groups potential customers around unique data points like IP addresses. The goal of these new approaches is to identify large groups of people who are viewing the same online content versus targeting the individual, thus avoiding privacy concerns around the collection of Personally Identifiable information (PII). Many of these technologies are promising, but only a select few are commercially available.
What Is a Marketer to Do?
For many marketers, the first thing to do around the “cookiepocalypse” is to exhale, because Google Topics won’t launch until 2023.
Marketers must make certain that they’re up-to-date on current ad tech trends, to not only develop an understanding of available workarounds but to begin planning for next steps whenever they may come. A key element of developing a post-cookie strategy is to implement a more consistent approach to privacy and stick to it.
For years, consumers have been okay with sharing some of their personal information to have a better and more relevant online experience, and marketers have been seeking as much customer data as possible. However, marketers would do well to embrace a more middle-ground approach that balances customer privacy with the data they seek to operate in a more consistent and ethical manner.
Most importantly, marketers will need to go “back to the basics” in some respects. This means a greater focus on vertical media outlets with very specific content that is designed to reach targeted audiences. Vendors and their marketing teams will also need to partner with vertical-market publishers which possess the audience relationships that they covet. Tech brands will likely need to engage in deeper, more integrated sponsorships and co-marketing arrangements to gain visibility and engage with the vertical audiences that they’re looking for.
Without the ability to use third-party cookies to track users across the internet, the use of advertising and external data to drive ad targeting will become critically important. Marketers will surely adapt to the post-cookie landscape and develop effective campaigns that leverage the benefits of demographic- or cohort-based ad targeting. Even better, marketers don’t have to wait until tomorrow to achieve results from such data – they can obtain quality data from vendors today and get a jump on their competition by being ready for the new, cookie-free era of o***************.
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