With third-party cookies disappearing, here's where marketers are focusing now.
Increasing concerns and regulations surrounding consumer privacy have led both Safari and Firefox to block third-party cookies, and they’re set to disappear in Chrome by next year. While this might be considered a big win for consumers, it represents a major roadblock for digital advertising.
According to the IAB, publishers could lose up to $10 billion in ad revenue once third-party cookies disappear completely. In response, digital marketers are rushing to find alternatives that can help them continue to offer audience targeting without compromising data privacy.
Why are third-party cookies valuable?
The purpose of third-party cookies is to help advertisers better understand a publisher’s audience so they can determine if it’s the right place to display their ads. The ability to access user data using third-party cookies gives advertisers a lot more information on potential returns, and the loss of that info could lead to them bidding twice as much for the same placement.
Because third-party cookies give advertisers so much confidence in their campaigns, Google estimates that publishers could see a loss of up to 70% in ad revenue if third-party cookies aren’t available. However, as we near Chrome’s permanent removal of third-party cookies, it’s important that advertisers and publishers stay focused on the alternatives.
The best alternatives to third-party cookies
While advertisers and publishers have long relied on third-party cookies, there are several effective alternatives that they should begin to explore before third-party cookies disappear. Here’s a look at the best ones.
With the help of grouping, Google can allow advertisers to find audiences that match the demographics they wish to target without exposing specific information about any specific user. Additionally, on-device processing helps keep a user’s web history and other info private from advertisers.
With this in mind, the FLoC represents just one piece of Google’s Privacy Sandbox. Other tools in the suite include FLEDGE, Dovekey, Topics, Turtledove, and SPARROW. Used in combination, the Privacy Sandbox could easily replace third-party cookies and even lead to better results for advertisers in the long term.
The goal of an identity solution is to get multiple advertisers and publishers involved in a network where they aim to catalog users by anchoring them to a permanent identifier, like the email address someone uses to create online accounts. This method is known as first-party IDs.
Each time that user interacts with content from a business in the network, more information about their interests and demographics is collected, hashed, and securely stored. Over time, this allows users to be identified as they browse the web while also creating an informative profile that allows advertisers to design target audiences for their digital ad campaigns.
While identity solutions hold promise, the primary limitation is that it requires a great number of publishers and other participants to build a reliable database of users. However, this method is already being utilized at scale in Europe, where it is currently approaching the same utilization volume as third-party cookies.
Contextual targeting is already a widely used method for displaying ads to a relevant audience without the use of third-party cookies. With this method, publishers provide a description of the content they publish, and advertisers can determine if the likely consumers of those content match their audience.
For example, a website publishing information about real estate investing would likely interest users who are considering investing platforms and other financial products. So, an advertiser with a new investing app would likely consider this publisher to be a contextual match.
While it’s more difficult to target very specific audiences or attributes using contextual targeting, it is a more affordable way for advertisers who are targeting audiences based on interests rather than on income, age, gender, or location.
How to prepare for ads without cookies
While Chrome is not set to remove third-party cookies until next year, data privacy is a major point of concern and finding alternatives that are capable of sustaining your targeting capabilities and ad revenue will take time.
The alternatives discussed above represent just a small slice of the growing sector of tools and platforms that aim to replace third-party cookies and even introduce new features as part of the process. From here, the next step is comparing what’s available to figure out where you should plan to invest.
Consider exploring Capterra’s display advertising software reviews to find the right match. Additionally, be sure to read these guides on improving your first-party data strategy and captivating your target audience with the help of email and SMS marketing.