The Impending Cookie Deprecation’s Ripple Effect On Programmatic Advertising

Cookies have long been an essential tool for advertisers. They serve all kinds of useful purposes, from helping to track visitors to allowing more detailed targeting for online campaigns. But things are about to change.

Thanks to Google’s announcement that it will be phasing out third-party cookies, there is going to be a huge shift in the digital advertising landscape. As a popular feature of programmatic advertising, the news is sure to leave many advertisers feeling unsure of the road ahead.

In this article, we’ll explore the multifaceted impact of cookie deprecation on programmatic advertising and provide insights into how advertisers and businesses can adapt to this new reality.

The Cookie Conundrum

Cookies, like the sweet treat they’re named after, contain crumbs of information from websites that can be found at a later date. They are especially beneficial for advertisers, who use them to track data about users and the websites they visit, helping marketers create campaigns aimed at specific audiences. This can make advertising more valuable, and stand a better chance of reaching the most relevant people.

In recent years, web users have become increasingly plagued by privacy issues, and to help combat this, browsers including Apple Safari and Mozilla Firefox, have already phased out third-party cookies, but it’s now Google’s, turn, to phase out third-party cookies on its platform. It initially made its announcement in 2020, explaining it would take several years to implement the changes, due to a willingness to work with advertisers to help find a new way forward.

The news has been a wrecking ball blow to advertisers, who will now face difficulties tracking and targeting web users. This could impact the advertising industry as a whole, with less effective advertising meaning advertisers put less into their budgets. Many publishers will also suffer, losing out on the targeting ad opportunities that help them monetize their websites.

The Programmatic Advertising Landscape

What do we mean when we say ‘programmatic advertising?’. Programmatic advertising is a way of automating the ad-buying process, allowing advertisers to buy relevant ad space in seconds, saving time and money compared to other methods of digital advertising.

Cookies can help advertisers target customers easily and accurately and have historically gone hand in hand with programmatic advertising. It’s been a simple way for advertisers to create relevant campaigns with the greatest chance of success, and if this is your primary form of advertising, it’s natural you’ll feel concerned about the future and what you’ll have to offer your clients going forward.

The Impact of Cookie Deprecation On Programmatic Advertising

For the most part, advertisers have a right to be worried. The loss of third-party cookies will make it more difficult for advertisers to personalize ads, impacting how they are targeted. Cookies have previously allowed advertisers to target everything from location to interest in a particular brand, and many are now feeling uncertain about what the future will hold.

Personalization has long been thought of as a positive in the world of brand engagement, helping to improve user experiences. While there are still ways to personalize user experiences beyond the use of cookies, this development will certainly provide some challenges for advertisers going forward.

But are things as bleak as they seem? For starters, many users have been phasing out cookies themselves for years. In 2021, only 32% of web users agreed that they always accepted all cookies, while 83% of marketers rely on third-party cookies. If advertisers aren’t already planning for a future without third-party cookies, then it’s time they start.

It’s important to note that Google isn’t saying goodbye to all cookies — first-party cookies are here to stay. While often focused on enhancing a user’s personal web experience, first-party cookies can still provide some useful analytics such as demographics, referrals, browser types, and other key information.

First-party cookies will be able to provide relevant, and most importantly, accurate, targeting for advertisers, as the information provided will be more controlled. Focusing on first-party data strategies can help advertisers create better customer relationships, due to them having greater control over the information they share with you. By developing greater trust, you’ll be able to further enhance the user experience in a way that benefits both the brand and the customer.

Adapting to the New Era

There are some effective strategies and solutions that advertisers can adopt to help navigate a world without cookies. Google’s Privacy Sandbox project is helping advertisers to prepare for the move, with its own APIs replacing the need for cookies, creating valuable datasets that can be used by advertisers, while putting customer privacy, and preferences first.

While it’s true that advertisers may need to think outside the box to get valuable data insights that can enhance targeting efforts, it can be done. ‘Zero-party’ data is one of the ways this can be achieved, using surveys, polls, etc. to collect data voluntarily and directly from users, helping to build up some detailed audience profiles to benefit advertising campaigns.

Other technologies that could go some of the way to fill the void left by third-party cookies include:

Contextual targeting

Contextual targeting provides advertisers with a simple way to target audiences. Used by a growing number of advertisers, it involves placing ads next to the most relevant content. This means while web users are browsing content (via digital means or elsewhere), they are showing ads that are most likely to pique the interest of audiences. It’s possible to use contextual targeting with programmatic advertising, by bidding on keywords and sentences that may appear in content.

Device fingerprinting

Device fingerprinting is an alternative way to track web users, without being attributed to their personal attributes. It allows advertisers to understand user journeys, understanding that the same device was used to visit a web page featured in an ad, revisit a web page multiple times, and even information such as the browser they were using.

Using device fingerprinting could make a suitable alternative to third-party cookies when used with other technologies to inform targeting insights.

Universal IDs

Universal IDs are one of the most significant methods being used to replace third-party cookies for programmatic advertising. They work by assigning a single identifier to a user, and then tracks the user’s journey, using deterministic matching which can provide more effective results than using cookies. Universal IDs can bring some effective results for programmatic advertising when used with existing Universal ID partners.

While these new technologies can help advertisers find suitable alternatives to third-party cookies, it’s important that advertisers maintain transparency and protect privacy. People have been moving away from cookie use for years due to wanting to control the information businesses and advertisers know about them, and ensuring you use practices that are built on consent can be a strong selling point for your clients.

The Road Ahead

While advertisers may feel worried at the thought of losing one of their biggest tools, it doesn’t have to all be doom and gloom. While the landscape of programmatic advertising may change, there are still ways to leverage customer data to enable automatic targeting and generate high levels of ROI for campaigns.

Planning ahead will be paramount to navigating the change, and it’s important that advertisers stay informed of the latest developments while working on new programmatic advertising strategies. Now is an excellent time for testing, and adapting strategies to find out what works, especially when it comes to first-party data.

Conclusion

While any change can be uncertain, the deprecation of third-party cookies should be seen as an opportunity. By learning to adapt and innovate, advertisers will be able to offer much more personalized experiences for their audiences, while maintaining the privacy and security that has been long needed online. The road ahead may be unclear at this point, but getting ahead can give marketers the advantage they need over those who bury their heads in the sand.