Life after cookies leave the advertising industry in shambles

Digital advertisers and publishers are far from agreeing on how to replace third-party tracking cookies, and instead have stuck to different custom solutions that don’t all work well together and lack adequate oversight.

why does it matter: The drive to focus more on privacy has cluttered an already chaotic digital advertising ecosystem, and many of the changes introduced by future laws could easily be overturned.

  • “It has been a long period of turmoil since 2020,” said Eric Seuvert, independent analyst and owner of Mobile Def Memo. “It doesn’t get clearer over time, which is frustrating for marketers.”

Driving news: Google’s decision last week to delay the end of support for third-party cookies until 2024 – the second delay in two years – was a signal to the industry that this uncertainty won’t end any time soon.

Advertising

  • Google said the decision was the result of comments from its advertising and publishing partners who said they needed more time to test other solutions. But most marketers don’t wait for the company to start such tests.
  • FLoC, Google’s original alternative to cookies, was scrapped in January after two years, in part because privacy experts worried it could make it easier for advertisers to inadvertently collect user information.
  • They then launched a new solution called Topics, which allows advertisers to place ads through a limited number of topics determined by users’ browser activity. But it is still in its infancy and has yet to gain broad industry consensus.

Location status: Looming privacy legislation and antitrust threats have forced big internet companies like Google and Apple to start implementing privacy changes before regulators can go after them.

  • But their approaches are vastly different, and marketers are forced to account for both until some sort of blanket privacy overhaul is enacted.

The Google Hope to create A multi-domain framework for all parties on the open web. But these changes only apply to Chrome browser and Android operating system.

apple It takes a more direct approach. It has already started making its own unilateral privacy changes to its browser, Safari, and within the iOS mobile operating system.

  • Tracking changes to the mobile app has been met with frustration by some of its competitors – including Facebook – who said they have made it difficult for marketers to target users with personal data on other apps. They also argue that Apple’s advertising business is disproportionately benefiting from the changes.

be clever: Instead of waiting to see how the changes from Google and Apple will happen, many advertisers and publishers are starting to adopt new solutions that may – at least in the next few years – offer consumers targeted alternatives to online advertising without cookies.

Uniform Identifier 2.0 It is probably the most popular solution to date. The brainchild of ad technology company Trade Desk, an encryption standard that can be applied to users’ personally identifiable information (PII) — such as an email or phone number — that prevents target ads from specifically identifying individuals.

  • Dozens of ad technology companies, advertising agencies, and web publishers have already adopted this standard. There is now an incentive to bring it to other countries.

Yes but : Users must choose to share their personal information, and lawmakers may tighten privacy requirements in the future. Currently, most users sign up by providing their email address when signing up for a purchase or promotion.

  • “The biggest problem with any kind of identity solution is that it depends on people submitting to it,” Seuvert said. “It’s a very difficult proposition. It seems unlikely to me that they will see widespread consumer adoption of UID 2.0 or any other type of alternative identification system.
  • There is also no real governing body that has agreed to administer the application of this standard. The Interactive Advertising Bureau (IAB) had originally volunteered to do so, but dropped out due to liability concerns. It is not clear whether another industry body will be involved.

Between the lines: Some other options have been introduced, but they have made some noise so far, because they mainly offer cookie solutions rather than new standards.

  • For example, LiveRamp, an advertising data company, has created a “RampID,” which is essentially an identity graph — or digital card — that identifies users by associating them with their data on other devices or offline data.
  • ID5, another data identifier company, has created a user “IdentityCloud” that it hopes will be used to target users with first-party data shared across the web.

Next steps: Amid all these changes, most publishers and advertisers are scrambling to collect their own first-party data, or data given to the publisher directly with the user’s permission.

  • But for large publishers who need to provide advertisers with the ability to target users broadly across their platforms, adopting data identity standards like Unified ID 2.0 will be key to staying competitive.
  • Disney, for example, signed a landmark agreement with the Bureau of Commerce earlier this month to match first-party user data with personalized data that meets the Unified ID 2.0 standard so advertisers can target automated ads.

Conclusion: “A lot of this is seen as drastic and sweeping change, and it’s very confusing for marketing teams stuck in the middle,” Seuvert said.

Leave a Comment