Google Chrome's decision to disable third-party cookies has sent ripples through the industry, prompting publishers and advertisers to reevaluate their strategies. Let's delve into the key aspects of this transition and understand what it means for the digital ad ecosystem.
The Countdown Begins: Google Chrome's Plan to Stop Cookie Support
Google's plan to eliminate third-party cookie support in Chrome has been set in motion, commencing with the disabling of these cookies for about 30 million people worldwide (1% of users) in early 2024.
This initial phase is a prelude to a broader rollout, with the goal of complete third-party cookie removal for all Chrome users by Q3 2024.
The Digiday and Google Privacy Sandbox survey highlights that 98% of publishers expressed that protecting their audience data was at least "somewhat important," with 44% indicating that they considered it "very important."
The phased approach by Google offers a window for publishers to assess and adapt their strategies to mitigate potential revenue impacts.
Why is Chrome Changing Policy?
In a bid to prioritize user privacy, Google Chrome decided to remove third-party cookies. Here are the key reasons behind this move:
User Privacy Concerns:
- Growing user concerns about online privacy and cross-site tracking
- Google was under increased consumer pressure, after competitors the Apple, Mozilla, and Brave browsers added third-party cookie blocking.
Regulatory Landscape:
- Phasing out third-party cookies aligns with evolving privacy regulations, such as GDPR and CCPA
- Demonstrates Google's commitment to complying with global privacy regulations.
Shift Towards Privacy-Focused Innovations:
- An evolving technology landscape with a focus on privacy.
- Google and other browsers are exploring alternatives like Privacy Sandbox and Universal IDs.
- Targeted advertising remains possible without compromising individual user data.
Also read: FAQ: Consent Management
Impact on Publishers: Navigating a Post-Cookie Landscape
Audience Targeting Limitations:
Marketers will immediately lose valuable targeting data about their visitors. Publishers may find it harder to understand their audience's interests and preferences, leading to less effective ad targeting and potentially lower engagement rates from advertisers.
Advertising Revenue Challenges:
In 2019 Google studied the revenue impact of blocking access to third-party cookies. “We observed that for the top 500 global publishers, average revenue in the treatment group decreased by 52%, with a 1 median per-publisher decline of 64%.” For the news vertical, the average loss jumped to 62%.
A McKinsey report suggests that publishers could lose $10 billion in revenues from the loss in personalization. They point out that although top publishers have been working to build their first-party data value, much of the market relies on third-party targeted ads for 80% of their revenue.
New Investments, Strategies, and Tools Required:
Approaches and alternatives abound, but it’s a sure bet publishers need to make changes in new investments, such as first-party data, audience relationship building, or contextual targeting. New tools will need to be evaluated, as well as the advantage AI might provide in filling some targeting gaps.
Publishers may need to consider new KPIs, structured experiments, visitor accounts, loyalty programs, and more to craft new strategies.
Adtech Transitioning from Open Marketplace to Direct Sold
According to eMarketer, by 2024, 75% of programmatic digital display ad spending will be on direct-sold ads, and only 8.5% on Open Marketplace (OMP).
In a column for AdExchanger, Permutive CEO Joe Root suggests the “open marketplace (OMP) no longer serves its purpose”.
With third-party cookies gone and adtech focusing on supply path optimization, transitioning from OMP to direct sales has been the path for many top publishers. Top publishers have been shifting more heavily to first-party data strategies, and will likely accelerate efforts in 2024.
Over the past year, Penske reported a 46% increase in revenue from first-party data, and AdWeek reported that Hershey set a goal of 80% of addressable media buys through private deals.
How Should Publishers Prepare?
Build First-Party Data:
Encourage users to create accounts, subscribe to newsletters, or join loyalty programs for personalized targeting. Admiral’s visitor relationship platform has multiple tools for the easy collection of visitor data that publishers can use quickly.
Collect Emails Now:
At a minimum, AdOps and Revenue Managers should care about collecting emails now. It’s easy, visitors are familiar with it, and the ability to leverage hashed emails offers an alternative ID solution.
Experiment and A/B Test:
Publishers should actively conduct experiments and A/B tests to build new strategies after the loss of third-party cookie signals. By testing different tactics, such as alternative targeting methods or personalized experiences based on first-party data, publishers can identify what works best for their audience and maximize revenue potential.
Strengthen Visitor Relationships:
Build direct relationships and trust with visitors, experiment and explain the value of sharing data, and offer tailored experiences across visitor touchpoints and segments.
Implement Consent Management Platforms (CMPs):
Use CMPs to get explicit user consent for data collection, complying with privacy regulations like GDPR and CCPA. "CMPS can ensure that users have transparency and knowledge about how their data is being controlled."
Leverage Contextual Targeting:
Invest in better ways to place ads based on page content instead of individual user behavior for effective targeting. Contextual targeting won’t replace third-party cookies, but they can help mediate the impact. Experiment with combining first-party signals with contextual.
Educate Internal Teams:
Train marketing and sales teams on the changes, emphasizing the shift toward privacy-centric practices.
Alternatives to Third-Party Data
While third-party cookies have been a staple, there are alternative methods:
Google Privacy Sandbox:
- Third-party cookie alternative by Google to allow targeting to publishers and advertisers.
- You can join the trial to see how it works for your audience.
- Google’s former “FLEDGE” approach morphed into their Protected Audience API (PAAPI) and is part of the Privacy Sandbox initiative.
Conversion Measurement APIs:
- Measure conversion and performance without third-party cookies.
- Chrome development team and Apple's experimental attribution API.
Universal ID’s:
- A unique identifier is assigned to an individual user across various platforms and devices. It serves as a way to connect and track user behavior, enabling more accurate targeting and personalization of advertisements.
- Examples:
- Hashed emails, (HEMs) are simple to leverage and familiar, but only work for visitors that have shared their email.
- IP addresses—CTV’s predominant identifier—are facing a future that looks very similar to that of third-party cookies. Google’s recently announced Gnatcatcher proposal to mask IP addresses joins an increasing number of privacy protocols designating device addresses as Personal Identifiable Information, or PII.
- Unified ID 2.0 by The Trade Desk - The Trade Desk’s Unified ID 2.0 (UID2) uses a single sign-on—such as a user's email address or phone number—along with user consent to create a unique and anonymous identifier.
- RampID by LiveRamp assigns an anonymous identifier to a specific individual across multiple devices and channels. According to LiveRamp, the ID solution can enable advertisers to limit their advertising frequency to specific users.
Seller Defined Audiences (SDAs):
- Seller Defined Audiences are an addressability specification from IAB Tech Lab.
- Publishers categorize users using IAB's Audience Taxonomy in OpenRTB bid-request metadata.
How Admiral Can Help Immediately
The journey toward a third-party cookie-free future is moving at full speed, and publishers and advertisers must adapt to thrive in this evolving digital landscape. The phased approach by Google offers a grace period for adjustments, but the industry's response and innovation will determine its future success.
Admiral offers multiple ways to help publishers prepare for the new future, including email collection, specialized and robust Visitor Data collection, and tools to build sustainable visitor relationships across every touchpoint.
Request a demo today.
