The clock is ticking to reinvent digital advertising now that Google vowed to remove third-party cookies from its Chrome browser within two years.
While the move will force digital players into new ways of doing business, a cookie-less world is being seen by some as a way to start from scratch. It “removes a crutch this industry built,” says Andrew Casale, president and CEO of Index Exchange, a programmatic commpany that works with publishers. “No one thought third-party cookies were great. They’re not tied to a person and they’re fragmented across a huge swath of companies.”
But Google’s decision, which comes as privacy regulation rises, is not welcome news for all. Criteo, which built a retargeting empire around cookies, saw its stock tumble following Google’s announcement. Others such as LiveRamp and Oracle-owned businesses BlueKai and Datalogix, as well as nearly all data management platforms, now face the challenge of rethinking their business.
‘End of days’
That may not be a bad thing, says Jarrod Dicker, VP of commercial technology and development at the Washington Post. “Our point of view is that it’s about time,” says Dicker. “The way that advertising is being delivered with cookies simply isn’t accurate.” Adds Dicker: “We as an industry are always at the ‘end of days’—ad blockers, viewability, fraud. Knowing our resiliency, the next frontier is going to be insanely exciting.”
Others, such as Channel Factory, a certified YouTube partner, says the death of cookies will prompt innovation on old ad formats. “This will shine a light on contextual targeting,” says Jed Hartman, chief commercial and strategy officer at Channel Factory, referring to serving ads relevant to the content on a site a consumer is visiting. “The tech around contextual is elevating so it is attached to performance that’s measurable without use of third-party cookies.”
Google says it has a solution, dubbed Privacy Sandbox, that it says won’t impact publishers or advertisers. As it stands, little is known about what Privacy Sandbox actually is, but the goal is to provide users with privacy while also delivering a similar sort of targeting advertisers use today.
Some fear issues such as frequency capping (limiting the amount of times a consumer sees the same ad) and attribution will be significantly impacted. In a note to its clients, agency 360i wrote, “Frequency capping will be hindered without a standard browser framework for identifying” users.
Maggie Merklin, exec VP at Analytic Partners, says that “frequency capping will become more difficult— potentially impossible.”
Meanwhile, attribution may resort to a last-click approach, says Andrew Frank, a VP analyst at Gartner, meaning the website the consumer visited last will get credit for a sale rather than take into account the full path to purchase.
“Marketers need more than last-click to understand the value of their ads, but obviously such solutions require some kind of tracking to analyze effects on the user level.”
Similar to how publishers restrict people from reading stories without first signing in, a future without cookies might usher in a similar solution, but across the entire web.
Germany, for example, has already experienced a so-called cookieless world when FireFox and Safari eliminated cookies from their browser, making about 40 percent of Germany’s web users invisible to marketers.
The country’s ad solution is a single privacy portal dubbed “NetID.” Says Casale, “In many ways Germany is the canary in the coal mine for us.”
Many people Ad Age asked believe Google might introduce a similar solution, where the browser will ask users to either sign into Chrome or whatever portal the U.S. ad industry creates, should they make one.
“I’m concerned the internet is going to turn into a login walls ecosystem where you have two choices: log in or sign up and give your email address,” says Justin Silberman, VP of product at video ad tech company DailyMotion. “You’re going to have to collect identity to monetize and that’s not good.”
The Trade Desk, a popular programmatic platform used by agencies to buy media, suggests a different approach, one where browsers have their own unique device ID, or in similar fashion to smartphones.
“It would just be inside the browser,” says Jeff Green, CEO. “This represents a massive improvement to the controls for consumers as well as just the mechanics of the internet.”