Top Third-Party Cookie Alternatives - Maxthon

A recent study by the IAB revealed that the deprecation of third-party cookies could result in a substantial loss of up to $10 billion in advertising revenue for publishers. This highlights the significant impact that changes in browser technology could have on the digital advertising ecosystem.

Additionally, Google has projected that publishers may substantially decline 50-70% in revenue without implementing new strategies to leverage audience data. The impending loss of third-party cookies underscores the urgency for advertisers and publishers to explore alternative approaches for targeting users and delivering personalised content.

Fortunately, viable alternatives, such as user identification solutions, audience cohorts, and contextual targeting, are emerging. These methods offer potential avenues for advertisers and publishers to continue reaching their target audiences while adapting to evolving privacy regulations and technological shifts.

Adopting these alternative approaches allows advertisers to continue reaching their desired demographic segments while effectively respecting user privacy. Publishers can also maintain monetisation capabilities through more targeted and relevant advertising methods, helping mitigate potential revenue losses from cookie deprecation.

Overall, the findings emphasise the need for industry stakeholders to adapt and innovate in response to changing privacy standards and consumer preferences. Embracing these innovative alternatives will be critical for sustaining ad revenue streams amidst an evolving digital landscape.

Blocking of 3rd party cookies

The blocking of third-party cookies has stemmed from widespread privacy concerns surrounding the collection and sharing of user data. Regulators and web browsers have taken action to address these concerns, leading to increased restrictions on third-party cookies. In 2018, the GDPR in the European Union mandated explicit user consent for targeted advertising, marking a significant shift towards protecting user privacy. Similarly, the CCPA regulations in California further aim to safeguard personal data by imposing stricter requirements on how companies handle and disclose user information.

These regulatory efforts reflect a growing recognition of the need to enhance privacy protections in the digital landscape. By limiting the reach of 3rd party cookies, users gain greater control over their online data and are less vulnerable to invasive tracking practices.

This shift also requires advertisers and web platforms to prioritise transparency and accountability when handling user information. As a result, businesses must adapt their approach to data collection and targeted advertising to align with evolving privacy standards, thus promoting a more trustworthy and respectful digital ecosystem.

Third-party cookies access

Third-party cookies allow advertisers to identify and track individual users across different websites, decreasing targeted advertising effectiveness. This lack of identification typically results in advertisers bidding around 50% less for ad space, which impacts publishers’ revenue. Additionally, as of December 2020, about 30% of desktop users already use browsers that block third-party cookies.

According to StatCounter.com, a website that relies on Snigel’s header bidding stack, the breakdown of desktop browser market share shows that many users may be inaccessible due to cookie-blocking measures. A Google study indicated that publishers could potentially lose between 50% and 70% of their revenue due to these developments.

Overall, the absence of third-party cookies is profound and has significant implications for advertisers and publishers regarding targeted advertising efficiency and revenue generation.

Several solutions are available to help publishers and advertisers deliver more targeted ads to users. However, there is yet to be a definitive best option. To mitigate risk, publishers should implement a combination of these solutions and evaluate their effectiveness with the website’s traffic.

By adopting multiple strategies, publishers can gather data on which methods yield the best results and adjust their approach accordingly. This approach allows flexibility and the ability to adapt to changing advertising trends, ultimately maximising revenue from ad placements. In essence, diversifying the use of these solutions can provide valuable insights into what works best for a particular audience or demographic.

Identity solutions

Identity solutions track users using personal data such as an email address, phone number, or login ID. Users’ data is collected and sent to an ID provider when they visit a website. From there, the user is matched to an existing ID or a new one created, and their personal information is encrypted or hashed to protect their privacy.

Two primary identifiers are used to create universal IDs:

1st-party website cookies
Permanent user identifiers (email, phone number, user ID, etc…)

An ID created with a permanent user identifier, such as an email address, is a universal identifier because it can be used across websites, other channels, and platforms. This is one advantage of identity solutions over third-party and first-party cookies, which can only identify users on the web. As more brands and publishers feed data into the ID solution, the chances of a positive match increase. As a result, these solutions will become more effective over time.

Identity solutions’ main limitation is scale. They require thousands of publishers and advertisers to collect and share user data systematically, and multiple ID solutions are needed to provide them with enough data to identify users effectively.

Adform’s latest study shows that despite 75% of companies globally acknowledging that the deprecation of third-party cookies will impact their business, over 78% of marketers don’t have a tested solution. In addition, only 29% globally have adopted a first-party ID solution. In Europe, however, publisher adoption of first-party IDs is nearing third-party cookie volumes. Adform says the introduction of its ID solution is already generating results. The percentage of publishers passing first-party IDs is 100% in Denmark, followed by 93% in the UK, 90% in Spain, and well above 60% in other European countries. In the US, the number is below 20%.

LiveRamp

In October 2020, LiveRamp combined its Authenticated Traffic Solution (ATS) and IdentityLink ID products with The Trade Desk’s ID solution to form Unified ID 2.0. This collaboration aims to enhance the scale and effectiveness of Unified ID 2.0 in identifying users and boosting ad revenue for publishers.

Unified ID 2.0 strongly emphasises identifying users through email addresses, providing publishers greater user tracking autonomy when web browsers implement tracking restrictions. LiveRamp’s ATS utilises Apple’s Identifier for Advertisers (IDFA), Google’s Advertising ID (AAID), and logged-in email information to enable publishers to target advertising more effectively and raise CPMs without relying on third-party identifiers.

Google’s Privacy Sandbox

Google’s Privacy Sandbox is the company’s proposed solution for replacing third-party cookies with application programming interfaces (APIs). This includes FLoC, SPARROW, Turtledove, FLEDGE, Dovekey, and Topics. For more details, read our complete Google Privacy Sandbox guide.

Advertisers will be able to use the APIs to receive data on:

The prevention of spam, fraud, and DoS
Conversions
Ad targeting
Attribution
Federated logins

Google’s Privacy Sandbox is still in development, and it is unclear which features will be included and how the platform will be used. Companies can contribute to the project by submitting suggestions that the W3C consortium will review. However, many industry experts have criticised this approach as too narrow and limiting for replacing cookies. There are also doubts about the privacy of FLoC, and its testing was postponed in Europe over concerns that it violates GDPR.

First party data

The future effectiveness of numerous third-party cookie alternatives is still being determined as they are tested and developed. Publishers’ ability to collect first-party data will be crucial for attaining higher CPMs. Publishers who need a plan for gathering first-party data should consider incorporating gated articles, forums, newsletters, or other value-added content to encourage user registration on their site.

Google’s Publisher Provided Identifiers (PPIDs)

In November 2021, Google introduced a new feature through Ad Manager that allows publishers to share Publisher Provided Identifiers (PPIDs) with demand partners. PPIDs are unique identifiers assigned to users by publishers and are typically linked to logged-in users.

This new functionality enables advertisers to create personalised ad campaigns in a privacy-conscious manner. It also empowers publishers to build custom audience segments, deliver campaigns through traditional reservations or Programmatic Guaranteed deals, and enhance their ad revenue by serving pertinent ads to users. As a result, publishers must consider how to incentivise users to log in if they want to leverage PPIDs effectively.

How did the outcomes appear? In our first trials, we noticed that Beta partners saw a rise of 15 or more in programmatic auction revenue by transmitting PPIDs in inventory without any other identifiers. Google observed this.

Contextual Targeting

Contextual targeting involves displaying advertisements based on an evaluation of the keywords and phrases in a webpage’s content. This method does not rely on personal information but instead uses data provided by the publisher, such as the device used and the browsing time. Advertisers employ machine learning to forecast which pages are most suitable for targeting and when to target them.

For instance, if a user visits a sports.com page featuring a soccer game recap, advertisers can analyse the content and determine its relevance to soccer. Consequently, brands associated with soccer, like Addidas, might compete to display their ads alongside the pertinent soccer content.

Contextual advertising is particularly effective when publishers offer highly specialised content that appeals to users with specific interests, such as those focused solely on online gaming. Furthermore, contextual targeting is a viable advertising alternative when users decline consent for tracking through a CMP or other registration methods.

One notable drawback of contextual advertising is its limited targeting options. It cannot pinpoint specific users or their demographic characteristics, making it less effective for advertisers with broad and diverse audiences.

Criteo, a company specialising in display ads, has developed an innovative contextual advertising tool that leverages AI to merge content classification with first-party transaction data. This enables a more effective connection between consumer purchases and the content they engage with.

Meanwhile, Asensio uses Natural Language Processing (NLP) to scrutinise web pages and pinpoint essential terms and phrases. These findings are then utilised to generate a Semantic Page Profile, which is incorporated into a Semantic User Profile each time the user explores a new page. As the Semantic User Profile expands, ad targeting becomes increasingly precise.

Google’s Publisher Provided Signals (PPS) is a new feature in Ad Manager that allows publishers to use their data and contextual information for programmatic monetisation during auctions. With PPS, publishers can organise their data into audience or contextual segments, making it easier for buyers to access while maintaining privacy and preventing data leakage.

This feature enables targeting based on demographics, interests, or purchase intent across different sites and apps without tracking user activities. By including taxonomy segment IDs in bid requests sent to Google Demand bidders, PPS allows for directly integrating unique first-party data in the auction process. PPS offers several advantages to publishers, including seamless integration, enhanced privacy, reduced data leakage concerns, improved discoverability of audience attributes, and increased inventory value across apps and OTT CTV environments.

As a viable alternative to third-party cookies, PPS empowers publishers to share their first-party data with buyers while complying with evolving privacy regulations.

Data pools

Data pools, also known as data clean rooms, serve as a secure storage space for large volumes of user data. They operate independently from publishers and advertisers to safeguard user privacy. Publishers and advertisers can each upload or match first-party data, allowing advertisers to gain valuable insights about their audience from the publishers and activate targeted ads.

However, like ID solutions, this approach requires significant scale. The data clean room needs tens of millions of entries to match a specific user effectively. This necessitates collaboration among numerous publishers and advertisers to share user data. Moreover, the data pool entity must act as a trusted and impartial intermediary that complies with domestic and international privacy laws.

User identity graphs

User identity graphs merge personally identifiable information (PII), such as email addresses, with non-PII data like first-party cookies and publisher IDs. This approach facilitates cross-channel and cross-platform tracking and targeting. However, a significant drawback is the difficulty of developing and deploying user identity graphs without inadvertently infringing upon privacy. To safeguard user data, it is advisable to engage a reputable vendor with expertise in this field. Amazon’s Neptune is a promising option to consider for this purpose.

Digital fingerprinting

Digital fingerprinting identifies users by collecting data about their devices to create a unique fingerprint. There are two primary types of digital fingerprinting: browser fingerprinting, which gathers information from the user’s browser as they browse the internet, and device fingerprinting, which collects data from third-party apps installed on the user’s device. Typically, third parties perform fingerprinting rather than the website or app the user is interacting with. This third-party fingerprint can be used across various apps and sites to track the user’s activity.

The data recorded for digital fingerprinting includes IP address, plugins, operating system, browser type, screen size, and time zone. Because this method can be implemented without storing data on the client’s device or browser, it is challenging to detect or block. Consequently, there are privacy concerns associated with this form of tracking.

Many browsers have announced plans to limit websites’ ability to fingerprint users. In contrast, first-party cookies require storage access, and regulators increasingly advocate for explicit consent before using any cookie.

Digital fingerprinting’s primary advantage is its ability to gather detailed data about a user’s activities. This provides advertisers with specific information about a user’s behaviour.

What are the most effective alternatives to third-party cookies? Employ a varied strategy that includes first-party data, identity solutions, and contextual targeting. Additionally, consider combining and sharing data sets with other publishers and utilising contextual targeting as a backup.

While identity solutions, contextual targeting, and Google’s Privacy Sandbox are promising alternatives to third-party cookies, a definitive frontrunner has yet to emerge. To prevent a revenue decline, publishers should begin experimenting with these alternatives before Chrome’s anticipated blocking of third-party cookies in late 2024.

Smaller publishers are encouraged to combine their data sets with other publishers, allowing advertisers to purchase audience data on a larger scale. Publishers should be able to create their closed ecosystems, as a robust first-party data repository can drive behavioural and contextual targeting without third-party cookies. For inspiration, look to companies like ozoneproject.com in the UK, where a group of news publishers has established an editorially governed, GDPR-compliant advertising and audience platform for premium websites.

Gathering first-party data is crucial for publishers to shape their destinies, a sentiment widely shared among ad tech participants, from advertisers to website owners. While first-party data is ideal for enabling behavioural targeting, scaling this for only some users may be feasible. Therefore, integrating contextual targeting can enhance revenue from users who cannot be matched with first-party data.