As everyone in the digital ad space is well aware, the days of third-party cookies are numbered—and, in fact, they’re already mostly gone. At this point, more than half of all users have long been using devices and browsers that no longer support third-party cookies. And yet, many advertisers still rely on cookies. So what’s it really going to take to move forward from this outdated approach? And more importantly, how can advertisers ensure they don’t wind up right back in the same spot they are today?
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Third-party cookies: An endangered species
Google’s announcement that it would postpone the elimination of cookies in its own Chrome browser until mid-2023 caused a sigh of relief in parts of the online marketing industry, as it gave them a grace period for the development of targeting solutions without cookies. At the same time, many apparently did not (yet) admit that third-party cookies had long since belonged to an endangered species. In most markets, more than 50 percent of users use devices, browsers and channels that have long since ceased to support third-party cookies. Even where they still work, they only survive on average for about a week before they are automatically deleted. As a result, less than half of Internet users can be addressed via third-party cookies, and if so, then only within a short period of time.
And yet many advertisers are still relying on the discontinued model. An in-depth analysis of popular advertising platforms shows that around 60 percent of all everyday adtech functions in the typical tech stacks of large brands depend on third-party cookies. So there is a big gap between advertisers’ great dependency on cookies and limited cookie support in environments where their potential customer base resides. This gap has to be closed, and this need will fundamentally reshape the advertising landscape this year and next.
Action needed for advertisers
Advertisers must recognize that waiting for Google to present them with a solution is not a viable strategy to closing the gap being left by third-party cookies. When the time comes, the resulting solution will probably only work in Chrome anyway. Advertisers must continue to work on a strategy for the cookie-free future of the advertising industry. They have to ensure that their campaigns continue to be profitable. Yet, reach and the accuracy of the addressability are already suffering tremendously. However, there is reason for optimism, as cookie-free test campaigns hae already shown that successful advertising is possible without third-party cookies.
The acceptance of first-party IDs continues to increase, and a growing proportion of publishers are already passing these IDs on in the bidstream. It is essential for advertisers to press ahead with the introduction of first-party IDs and to change their media buying, planning, implementation and underlying KPIs accordingly.
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The agony of choice?
But which of the more than 30 available ID solutions should advertisers rely on? Or do they have to develop IDs themselves that are perfectly tailored to their own needs? What happens if new and better ID solutions are developed in the future and advertisers come to the conclusion that they have unfortunately backed the wrong horse after all?
While many advertisers and publishers are trying to forge their own paths instead of working together on a solution, big players like Google and Apple are building their walls higher and higher. What marketing managers need now is a simple, identity-agnostic solution that will continue to create an open, ad-supported internet in which data protection and consent are the focus and everyone has the same opportunities, even after the third-party cookies have expired. Such a solution must continue to enable targeted campaigns while bridging the fragmented identity landscape. By combining and activating all common first- and third-party IDs across device browser boundaries, and by offering the possibility of future integration of new IDs, the solution must grant access to new data points and target groups in one fell swoop. Marketing managers need to address these areas effectively, while also maintaining compliance with data protection regulations.
Nothing stands in the way of the final demise of third-party cookies, but that doesn’t mean the era of targeted advertising is coming to an end. Marketers that turn their attention to first-party data and ID-agnostic solutions going forward will be best equipped to maintain the reach, frequency and relevance they require to both maintain and forge new customer relationships for the foreseeable future.