.A recent study by IAB has 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 the 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.
By adopting these alternative approaches, advertisers can continue to reach 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, 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 places more responsibility on 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
With third-party cookies, advertisers can 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, impacting 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 relyingSnigel’sel’s header bidding stack, the breakdown of desktop browser market share shows that many users may be inaccessible due to cookie-blocking measures. A study by Google 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 website’ste’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.. When users visit a website, their data is collected and sent to an ID provider. From there, the user is matched to an existing ID or a new one is 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 identity solutions have 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.
The main limitation of identity solutions is scale. It requires thousands of publishers and advertisers to collect and share user data systematically. Multiple ID solutions are needed to give publishers and advertisers enough data to identify users effectively. The 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 TrDesk’ssk’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 restrictioLiveRamp’smp’s ATS utiliApple’sle’s Identifier for Advertisers (IDFGoogle’sle’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 identifierGoogle’sle’s Privacy SandGoogle’sle’s Privacy Sandbox is company’sny’s proposed solution to replace third-party cookies with application programming interfaces (APIs). This includes FLoC, SPARROW, Turtledove, FLEDGE, Dovekey, and Topics. Read our complete Google Privacy Sandbox guide for more details.
Advertisers will be able to use the APIs to receive data on:
The prevention of spam, fraud, and DoS
Conversions
Ad targeting
Attribution
Federated logGoogle’sle’s Privacy Sandbox is still in development, and there is no clarity yet on 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 being 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 3rd party cookie alternatives is still being determined as they are still undergoing testing and development. The capacity to collect 1st party data will be crucial for publishers to attain higher CPMs. Publishers needing a plan for gathering 1st party data should contemplate incorporating gated articles, forums, newsletters, or other value-added content to encourage user registration on their sitGoogle’sle’s Publisher Provided Identifiers (PPIDs).
In November 2021, Google introduced a new feature that allows publishers to share Publisher Provided Identifiers (PPIDs) with demand partners through Ad Manager. 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 found in the content of a webpage. This method does not rely on personal information but instead utilises 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. As a result, it is 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 preciious. Google’sle’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, with the data clean room needing 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 1st-party cookies and publisher IDs. This approach offers the benefit of facilitating cross-channel and cross-platform tracking and targeting. However, a significant drawback is the difficulty in developing and deploying user identity graphs without inadvertently infringing upon privacy. Engaging a reputable vendor with expertise in this field is advisable to safeguard user safety. 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 browser as they browse the internet, and device fingerprinting, which collects data from third-party apps installed on thetheeuser’svice. 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 theeuser’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 client’snt’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 liwebsites’tes’ ability to fingerprint users. In contrast, first-party cookies require storage access, and regulators increasingly advocate for explicit consent before using any cookie.
The primary advantage of digital fingerprinting is its capability to gather detailed data about user’s activities. This provides advertisers with specific information about users ‘ behaviour. AdEngine, a header bidding solution, has seamlessly incorporated ID solutions, fingerprintints. Google”s Privacy Sandbox, and contextual advertising. Our primary objective is to assist publishers in circumventing revenue loss following the deprecation of third-party cookies in 2024. AdEngine encompasses LiveRamp and TUnified ID 2.0, ID5 IdentityLink, PubcommonID, and UnifiedID by Criteo. If you wish to access all these solutions through Snigel in one convenient location, please contact us here.
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, 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 anticipates blocking third-party cookies in late 2024. Snigel, an ad tech provider and header bidding company, has been refining its integration with these solutions since 2019. As a result, our partner websites are already equipped to leverage this technology through AdEngine, our header bidding solution.
Smaller publishers are encouraged to join forces with other publishers to combine their data sets, 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.
