What Google’s Announcement Says – And Doesn’t Say – About the Future of Advertising

We are officially entering a new Internet age with Google Advertising – one that puts privacy and transparency at the forefront of the digital economy. Nowhere has this been made more explicit than with Google’s March 3rd announcement that it “will not build alternate identifiers to track individuals as they browse across the web” to replace the third-party cookie once it has been phased out entirely – an announcement that has led, like most things Google does, to strong reactions.

Going Beyond FLoC: Verizon Media Launches Next-Gen Solutions, The Future of ID-Less Advertising

No one should have been caught off-guard by this advertising announcement. It was never really a question of “if”, but rather a matter of “when” they would announce forthcoming changes – and what those changes would be. And as we dissect the details and try to piece together the puzzle, it becomes clear that programmatic has evolved from a complicated means of transacting media to a fragmented set of trading practices that will require buyers and sellers to adopt different inventory classes, measurement tools and tech providers.

Google’s FLoC Enters Testing Phase on Chrome to Transform Interest-based Advertising

It’s therefore understandable that many advertisers and publishers are uncertain about what the future will look like. The third-party cookie, while invasive, made advertising and targeting much simpler and more efficient. While Google’s decision to prioritize user privacy isn’t in question, there’s still plenty of uncertainty about what cookieless digital advertising will be able to do, as well as how solutions like Google’s FloC can be implemented, and what the market standards will look like for publishers and advertisers going forward.

Is there a place for ID solutions?

For those leaning on Google tech, ‘universal identity’ will still be a valuable strategy for publishers to monetize loyal users and maximize their strength of signal via private marketplace (PMP). That ‘deal’ may be transacted on a 1:1 relationship with a marketer, or as part of a bespoke group of whitelisted publishers aggregated as a pseudo network trading on a similar universal ID and, in lieu of an open exchange option, merchandised as a PMP for scale, reach and frequency.

Recommended: Unlocking Blockchain ROI: UT Study Examines Opportunities, Limits

As Google’s announcement points out, any solution that relies on alternate identifiers to track individuals will have to adequately address privacy concerns, as well as keep up with constantly changing laws and regulations, in order to provide long-term value. This is yet another reminder that, in the absence of industry-wide standards over Universal ID solutions, many companies have viewed the removal of third-party cookies as a marketing opportunity, rather than as a chance to meaningfully address – and resolve – the problems that third-party cookies brought in the first place.

What’s next for publishers?

Just a few days out from Google’s announcement, publishers are still sifting through the news to try and make sense of what it means for their business. Whereas buyers have a multitude of tech options to trade with, publishers are often beholden to Google for ad serving, and will likely have to build out a series of partnerships with additional independent SSPs to reap the benefits of diversified market opportunities. For large publishers who have the brand equity, scale and resources to drive users towards authentication this task may not be difficult; however, smaller and mid-tail publishers who lack loyal, repeat users and can’t convey a justified value exchange to prompt users to login may fall on tough times with limited monetization options at their disposal.

There is a long road ahead, and effective monetization practices will include both authenticated identity providers as well as contextual tools, cohort-based mechanisms and co-op arrangements to optimize yield. Universal ID solutions will continue to be a core pillar of a premium publisher’s future-proofing approach, especially as marketers may look for alternative buy-side options to DV360 and realize the value of CDP-based technology to harness valuable first party data opportunities as primary addressable signals.

Time is running out

Today’s efforts will shape tomorrow’s media planning and buying. It’s clear that publishers and advertisers need to double down on proper tech solutions to support first-party data and addressable capability with a sense of urgency. Google’s messaging should be read as a clear indicator that the future begins now.