To date, marketers and ad tech companies have heavily relied on third-party cookies – those created by domains other than the one the user is visiting. Third-party cookies are used for cross-site tracking, retargeting, and ad serving. Whereas first-party cookies, which are created by the site the user is visiting, allow publisher sites to collect data, remember logins, and help to create a better user experience. A new International News Media Association’s (INMA) report, “The Third Party Cookie Trigger,” covers fundamentals, complexities, and new possibilities as the industry moves beyond third-party cookies.
Clearly, data is an important currency in the digital ecosystem. However, in January 2020, Google announced that it will phase out support for third-party cookies in Chrome by the end of 2022. The next two years provide the time to reset the digital advertising marketplace. We’ll need to reshape data collection and exchange strategies, redefine advertiser opportunities and enhance the users digital experience. Importantly, publishers have an opportunity to showcase how first-party content consumption data provides a better signal for relevance in the advertising ecosystem.
Disappearing cookies is no surprise
The holy grail of digital advertising is its ability to serve the right ad to the right user at the right time. However, the current path to that grail is questionable. Today’s digital advertising ecosystem is complex and messy. According to the Incorporated Society of British Advertisers (ISBA), tracking advertiser spend to the publisher is nearly impossible. In fact, publishers receive only 51% of digital advertising spend with up to one-third of the total spend unattributed.
Further, data collection of consumers on the web has a myriad of issues. These range from consumer consent to data tags firing off signals that lead to latency problems. And now with GDPR and CCPA in place, new governance on data collection is in play. So, it was only a matter of time before third-party cookie were phased out.
Moving beyond cookies
Media companies are already investing in technology platforms, modernizing their publishing infrastructure, building a data foundation, and setting new standards for publisher and advertiser transactions. In fact, publishers are taking steps to build scalable audience segments based on their data for advertisers. They are developing ways to leverage their first-party relationship with their users to evolve the advertising ecosystem.
The INMA report also identifies five potential alternative vehicles, some already in the works, to third-party cookies:
- Open Web alternative solution: An alternative such as Web browser APIs, driven by Google, Apple, Firefox, and media companies.
- In-app advertising: A shift of marketing spend from the Web to in-app advertising (90% of time spent on mobile is spent in apps).
- First-party data: An acceleration of first-party data (scalable) by publishers with a connection to advertisers.
- Paywalls and logins: Paywalls and logins and first-party cookies offered as a digital currency to use among publishers, brands, and companies.
- Universal IDs: Development of universal user IDs (needs to work across all parties and comply with GDPR and CCPA).
The end of third-party cookies affords publishers with an opportunity to re-think the value of advertising served on their site. It also allows them to distance themselves from an over-reliance on ad tech. It’s important for publishers to take the lead in reshaping data collection and exchange strategies in the digital advertising ecosystem to better reflect the value of the first-party relationship.