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InContext / An inside look at the business of digital content

What’s next for publishers in identity and addressability?

June 27, 2022 | By Megan Sullivan‑Jenks, Director, Product Marketing, Supply & Commerce Grid – Criteo @criteo

The state of identity in ad tech is overwhelming. The number of proposed solutions for the end of the third-party cookie seems to be endless, with new ID providers, clean room solutions, and cohorts popping up every week.

But for any of these potential solutions to work in practice, they need to be adopted by both advertisers and media owners. They also need to be supported by the platforms enabling those two parties to trade. Figuring out who’s taking the lead on those initiatives, or how readily available and scaled some of those potential solutions are can be difficult.

To help buyers and sellers answer these questions and more, The MediaGrid team analyzed more than 195 billion bid requests globally between January 2022 and May 2022. This provided insight into the adoption trends of various identity solutions and how the industry is progressing towards the end of third-party cookies.

The methodology employed to analyze the bid request data examined the User ID Module availability within publishers’ Prebid.js package for supply coming through our platform. Within the bid request, a number of inventory parameters were investigated, including: domain, time of impression, and various user data signals, including IP address, pixel tags, cookies, and UIDs. In addition, available providers were classified into ID solution types, such as deterministic, probabilistic, cohort, and ID resolution frameworks.

Here’s what we found.

A continued reliance on third-party cookies

We all know that the third-party cookie is set to expire for good sometime in 2023. We also know that marketers, publishers, and platforms have been toiling for quarters to find a suitable replacement that maintains measurability and performance without sacrificing accuracy or media planning sophistication.

Given this known timeline, we’d expect to see buyer reliance on third-party cookies for ad decisioning begin to wane, and shift to alternative solutions. However, the data shows otherwise.

In the first five months of 2022, nearly 60% of all winning bids included third-party cookie matches as the core addressability component of their decisioning logic, compared to 28% for alternative IDs, and 10% for non-addressable solutions, like contextual targeting and audience cohorts (figure 1).

Figure 1

What’s more surprising, though, is that publisher reliance on third-party cookies appears to be increasing as 2022 goes on. Looking at the data set, the percent of bid requests that were passed to buyers that included third-party cookie ID as the sole addressability signal grew from 39% in January to 49% in May, while the same metric for other solutions either remained stable or declined (figure 2).

This, in addition to the exclusive presence of third-party cookies in winning bids, suggests that the use of third-party cookies to operate the buying and selling of media remains widespread. It seems that both publishers and advertisers will continue to leverage the cookie for as long as it is available to them. At the same time, it appears that experiments aimed at finding suitable replacements for the cookie aren’t progressing at the rate we’d expect, given the potential impact its deprecation will have on performance, measurement, and yield.

Figure 2

Multi-solution publisher tactics

When we look further into the variety of identity targeting solutions used, it’s clear that publishers have been taking steps to leverage multiple solutions when passing bid requests to buy-side partners.

This year, of the publishers actively working with these alternative ID solutions, 74.3% are testing at least two at a time (figure 3). On closer examination, domains with higher traffic volume tended to support on average four different ID solutions. These can include a mixture of third-party cookies, deterministic, ID resolution, and other solutions such as cohort, contextual, etc. This indicates, unsurprisingly, that the larger, more sophisticated (or resourced) publishers are currently being a bit more aggressive with their addressability experiments.

Figure 3

Where do publishers go next?

Looking at the results of our research, perhaps we shouldn’t be too surprised.

In a perfect world, we’d see the use of third-party cookies slowly drop off and be replaced by cookieless alternatives. Alas, we don’t live in a perfect world.

In fact, media traders will most likely continue to use third-party cookies until the very end. After all, they’re a proven revenue stream with decades of inertia behind them – so why not make hay while the sun shines?

That said, there’s more than one use for third-party cookies as we approach the deprecation deadline in 2023. Smart publishers might choose to leverage these cookies as a comparison tool, judging their effectiveness against identity solutions and alternative IDs. Using techniques such as A/B testing, publishers should be able to assess which identity and addressability techniques create value for their campaigns. From there, they can hit the ground running when third-party cookies take their last bow.

The use of multiple identity vendors is also a logical step for publishers.

In order to navigate a post-cookie world, buyers and sellers will need to adopt multiple solutions, leveraging different combinations of tactics to satisfy advertising objectives. When it comes down to it, digital buyers and sellers will need to know which solution will work best for which channel, targeting strategy, and goal – none of which is an easy task.

So, what should be next on a publisher’s agenda?

Test, test, test…

If you’re a publisher looking for a key takeaway, here it is: test as many solutions as you can, as soon as you can.

By doing this, you can directly compare if cookieless solutions are able to maximize yield and package audiences at the same level as third-party cookies before third-party cookies are officially retired. And while that is easy to say, with the myriad solutions in the market today – from the various Google Sandbox solutions to alternative IDs, contextual and cohort solutions, cleanrooms, and more – how should publishers test the different solutions?

Finding that optimal combination will require a robust testing program which can plan and execute campaigns using various post-cookie approaches alongside current cookie-based methods. Publishers need to work with a flexible technology partner that can help plan, test, and activate your post-cookie targeting and activation strategy.

Publishers will need support for:

  • Market-viable Privacy Sandbox initiatives for those planning to use Google as a trading partner.
  • All major universal IDs currently passed in the bidstream, testing to see which are the most valuable for your business.
  • First-party data onboarding and activation.
  • Contextual solutions.

And this is to say nothing of all of the reporting and technical support needed to integrate and activate these services. Publishers will need to work closely with a vendor who is able to address all these concerns using the broadest range of post-cookie alternatives available to the market.

A lot of this may sound like doom and gloom, so here’s the good news: time is on your side.

Because alternative IDs can now be found in a quarter of all bid requests, now is the time that publishers should prepare for the cookieless future.

So what are you waiting for?

About the author

Megan Sullivan-Jenks is Sr. Product Marketing Manager for IPONWEB’s The MediaGrid. A self-proclaimed tinkerer, Megan’s a problem solver for marketing and product enablement strategies and execution. From nonprofits to consumer goods and software, she’s an expert in translating the complex to tangible marketing and communications strategies that focus on results. Outside of the office, Megan rolls up her sleeves to enjoy all things DIY like sewing and woodworking.

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