Identity Targeting in the Post-Cookie World
With the end of third-party cookies in sight, Index Exchange looks at how we can build a more transparent, privacy-focused digital ecosystem
For years, third-party cookies have served as the foundation of digital advertising. Recently, there’s been much debate around their sustainability as regulators as industry bodies focus in on consumer privacy. While still seen as foundational, third-party cookies are not always used in a way that is compatible with the attributes of consumer privacy. Because of this, their lasting power is in question, and their contribution to the future of our industry is diminishing. We are fast approaching the post-cookie era, and the implications are manifold.
The loss of third-party cookies is undeniably challenging in the short-term, as it requires all players in the ecosystem to shift their behaviour in terms of the solutions they build. If this behaviour does not change, and alternatives to third-party cookies are not embraced, ad spend across the open web will decrease and budgets will undoubtedly drop (as we saw in Germany last year). However, in the long-term, the loss of cookies will push our industry in the positive direction of a more people-based, deterministic advertising model - ultimately leading to more precise results for marketers and brands, and boosted revenue for publishers.
This is our chance, as an industry, to bring people-based marketing to the open, trusted web (e.g the premium publishers that consumers turn to for the content they trust). By crafting common identifiers, we can bring people-based marketing to the open web, allowing us to unlock digital advertising budgets and support a diverse, multi-faceted digital ecosystem. As we work to create these solutions, we must keep user privacy and user experience top of mind.
The impact on user privacy
Largely, the shift away from third-party cookies is the browsers’ reaction to users’ increased concerns around data privacy. In past decades, these concerns did not exist — as recently as 15 years ago we didn’t even have smartphones. Now, however, users’ data is being collected everywhere, stored in different locations, and used to power opaque algorithms, yet consumers have little or no insight into how they work and no control over how they operate.
User data, and the application of it into algorithms (both advertising and content-based), has been placed underneath a magnifying glass in recent years. Legislation like The General Data Protection Regulation (GDPR) has limited corporations’ capacity to collect and utilise consumers’ data without their express content. As mentioned above, browsers have taken a stand, making decisions, such as restricting the use of third-party cookies, to ensure user privacy is being protected and prioritised.
As we move into the post-cookie era, it is imperative we collectively craft solutions with user privacy top of mind, always ensuring users are educated on the value exchange between themselves and the sites where they are consuming content. We must move into a world where advertisers can still reach key audiences while remaining a vital source of revenue to publishers, but also one where customers are still protected and thus trusting of digital environments.
User experience and solving for inefficiencies
A common myth about our post-cookie future is that it will involve one, singular catch-all solution. We firmly believe that bringing people-based marketing to the open web is going to lead to greater addressability, ultimately scaling opportunities for buyers and unlocking invisible budgets for publishers. In doing so, it will allow marketers to dramatically increase the surface area where they’re able to reach their audiences outside of the walled gardens. That said, while people-based addressability will offer a great opportunity for the industry, it might not be a fit for every publisher. This is why tech players and the industry at large must work together for a common framework - such as the IAB Tech Lab’s Project Rearc - one that multiple providers will be able to leverage across the globe.
Users are more diversified in the devices they’re using to consume content than ever before. In fact, 30% of internet users in the United Kingdom own and use five or more connected devices. As an industry, we have to match that diversification with our offerings. Our focus should be not on crafting one, overarching solution. Rather, it should be on building a collaborative strategy that places user privacy and trust at the forefront.
We must stop and ask, ‘’What would be the best possible experience for the consumer?’ In crafting strategies that seek to answer this question, it is critical that all programmatic players remain committed to taking steps that protect user privacy, which include (but are certainly not limited to) protecting privacy via consent.
Next, consider the range of solutions available and the plethora of data sources. Identifiers stored in third-party cookies are brittle and short-lived. If it is people-based and deterministic, it will give you (as a buyer or seller) greater performance, attribution, and precision, moving through multiple touchpoints on the user’s journey and thus providing the user with an enhanced, seamless experience. It is also important to remember that first-party data will continue to work, even in a post-cookie era, so publishers and publications that have a relationship with their users will still be able to measure this directly on their sites. Tech partners must help facilitate this one-to-one relationship, allowing publishers (and marketers) to activate against this first-party data.
If such steps are followed, we will be able to construct a more trustworthy digital environment for all players and parties, including (most importantly) the end-user.
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