/ An inside look at the business of digital content
Why third-party cookies should be dead to you (regardless of what Chrome does)July 8, 2021 | By Valbona Gjini, Marketing Director – ID5 @ValbonaGjini
On June 24, Chrome shook the industry once again by announcing it will delay the deprecation of the third-party cookie, which was expected to be in 2022. When the news broke, many industry players gave a sigh of relief. The two-year time frame to migrate to a cookie-less infrastructure was quite tight for many. And not all companies were prepared to buy and sell data and inventory without the good old third-party cookie.
Transitioning a multi-billion-dollar industry to a new framework is not a trivial matter. This is keenly felt in a highly interconnected ecosystem like digital advertising. However, it’s a crucial step that we all must take. The cookie-based infrastructure has been called into question by data privacy regulations, such as GDPR. It is also inefficient.
The many limits of third-party cookies
Third-party cookies are domain-specific and can only be read by the server that created them. Technology platforms need to synchronize IDs with each other to create a common reference and share user-level information. This process, also known as cookie matching, takes place on advertiser and publisher websites. Significantly, this creates several issues:
- Value loss: the pool of identifiable users is reduced by 10-20% each time platforms match IDs with each other, creating lost opportunities for publishers to monetize their assets and for advertisers to reach their audiences.
- Privacy compliance: cookie matching represents an exchange of personal data. This is difficult to align with the requirements of data protection regulations such as GDPR and CCPA in terms of control and transparency.
- Data leakage: because of cookie matching, user data can be accessed by companies that lack a business relationships with advertisers and publishers. This puts their data at risk.
In November 2019, ID5 commissioned a study to assess the scale of the problem. The study, conducted on 68 top news and magazine websites in Europe, found that 58% of vendors that were registered with the IAB TCF had never been seen to take a GDPR consent parameter in their pixel.
Some vendors that were not being sent the consent string were sharing a completely fabricated consent string. The study also found that some of the companies triggered to monetize publisher-branded segments on their sites had no relationship or contract with publishers.
Therefore, we must transition to a cookie-less infrastructure to operate more efficiently and protect consumers’ data. And yes, that’s regardless of what Chrome decides to do with cookies.
Two of the major browsers have already deprecated cookies
The cookie matching process is far from being efficient or privacy-compliant but it still enables user identification which allows the deployment of campaign strategies such as targeting, retargeting, frequency capping and measurement. However, let’s not forget that cookies are already not available on 30+% of the traffic since they have already been blocked by Safari and Firefox. So those valuable campaign strategies cannot be applied in those browsers. That’s the main reason why cookie-less traffic is massively under-monetized. A study by Google estimated that the ability to identify users accounts for 50 to 60% of publishers’ ad revenue. Another study conducted by Bidswitch shows that eCPMs are 50% lower on Safari and Firefox.
Furthermore, Publishers’ first-party data loses its value in cookie-less browsers. First-party data belongs to the domain that has collected it. To activate it and power retargeting or prospecting campaigns, media owners need to find a way to share it with their monetization partners. This has been historically done with third-party cookies. In browsers where cookies are blocked, first-party data sharing represents a challenge.
By adopting solutions that enable privacy-compliant identification without relying on third-party cookies, publishers can benefit from all the capabilities that cookies offer without any of the hassles associated with them.
Use the extra time wisely
Publishers have multiple alternatives available to them. So, they have no reason to continue relying on cookies, which puts their users’ data at risk and causes them to miss out on revenue opportunities.
Many smart publishers have already integrated with future-looking solutions. These enable the individualization of consumers in browsers where cookies are blocked. This enables them to get incremental value from their Safari and Firefox traffic and to lay the foundation for the future when all traffic will be cookie-less. This also allows them to offer their customers a better and more privacy-compliant experience on their website.
If you haven’t started this process already, Chrome’s delay is certainly good news for you. However, you shouldn’t wait. The time to act is now.
There are different approaches and solutions that enable user identification in cookie-less browsers. However, it takes time to evaluate, integrate and measure which of them bring the best results and offer the best level of service. Use this extra time wisely do not delay the process further. Start integrating and testing next-generation identity solutions and encourage your monetization partners and clients to do the same. Migrating to a new infrastructure requires a collective, industry-wide effort. And publishers are positioned best to lead the way.