The Sun is Setting on Third-Party Cookies and It’s Time to Move with the Market, Not Against It

 

Google Chrome to Drop Third-Party Cookies

On January 15th, Google announced that third-party cookies would be blocked in Chrome by 2022. Over the past 24 months, increasingly aggressive iterations of Intelligent Tracking Prevention (ITP) in Apple products have challenged the third-party cookies used for measurement and targeting. However, Chrome currently commands a majority of desktop browser share globally, which makes Google’s announcement significant for the industry. In the next 24 months, third-party cookies will become effectively unusable for advertising measurement.


Based on current usage, by 2022 the market will be dominated by browsers that block some or all third-party cookies by default.

The Next Two Years

With this announcement and self-imposed deadline, Google will have to work out how their own ad platforms will interface with third parties, such as ad exchanges. The programmatic advertising ecosystem of which Google is a significant part of is based on third-party cookies. As things stand, Data Management Platforms (DMPs) will be significantly challenged. Likewise, view-based and today’s multi-touch attribution (MTA) solutions are effectively moot. Many forms of third-party data, already challenged by government regulations like GDPR enforced in May 2018, will cease to exist.

Google has proposed a mechanism to allow for anonymized and aggregated measurement called the Chrome Privacy Sandbox which was announced in August 2019.

Sand What?

In August 2019, Google announced an initiative aimed at evolving the web with architecture that advances privacy, while continuing to support a free and open ecosystem. They call it a “Privacy Sandbox.” Right now, these constitute a set of proposals for browser APIs that will eventually serve as privacy-preserving technical alternatives to third-party cookies.

There aren’t any tangible tools inside the Privacy Sandbox—at least not yet. Google said in their blog post that it aims to “eventually” build these tools with the industry over the next two years to ensure interoperability in the programmatic and ad tech ecosystem.

How Will We Target Audiences Without Cookies?

Third-party cookies have been used for everything from frequency management to behavioral targeting. How might marketers continue to employ these tactics moving forward?
Audience-based and user-level targeting have been the cornerstone of programmatic buying over the past decade. Indeed, the very concerns around ad targeting and user privacy contributed to Google’s announcement.

There is every reason to believe that targeting will still be possible, as will attribution, but the mechanisms will need to radically change. The scale and scope of addressable audience targeting will decrease and advertisers may turn to federated learning, contextual targeting, and other techniques to drive business performance through programmatic platforms. Another suggested approach would be for the browser itself to segment audiences based on their browsing behavior, and once there are a sufficient number of other browsers in this interest group an advertiser could target them.

What about frequency management? In October 2019 Google introduced frequency management across bid requests without a third-party cookie associated with them. Instead, Google employs machine learning to analyze behavior from across their ad inventory and provide an estimate with a high degree of confidence the number of impressions an individual had been exposed to.

Lastly, publishers with first-party audience relationships are poised to fill in audience targeting gaps left by the removal of third-party data cookies. For example, this would include a publisher with a paywall that requires a user to login to read content. Publications are likely to sell more curated inventory packages (here’s an example from Meredith), much of which will be available programmatically via private marketplaces (PMPs) and programmatic direct/guaranteed deals.


Spending on programmatic direct channels has grown significantly in recent years and is expected to continue climbing.

How Will We Measure?

Conversion tracking will become increasingly difficult to measure using current approaches, but there are several solutions available now and on the horizon. For example, as Campaign Manager log-level data loses fidelity, solutions like Google Ads Data Hub stand to open up new possibilities with more durable data and more privacy-safe methodologies. Likewise, platforms like Amazon and Facebook are working on similar solutions.

Google’s proposal for a conversion measurement API would allow for click-based attribution without using cross-site trackers. Trials for click-based conversion measurement sans third-party cookies will start by the end of 2020. Read more on the Chromium Blog and in AdExchanger.

What about view-based conversion tracking? Most current approaches will cease to work in any major browser once Chrome deprecates third-party cookies, but Google has indicated that the future of measurement may be more probabilistic or panel-based. Whether this will allow for view-through conversion tracking remains to be seen.

How MightyHive Will Adapt

As with many businesses in the programmatic space, a number of MightyHive services are built to some extent on top of the third-party cookie, such as programmatic audience activation, dynamic creative, and advanced attribution.

In their current state, these technologies will not work in two years’ time. However, there is every reason to believe that ad tech will continue to innovate and adapt with these changes opening up new opportunities for more advanced and smarter marketers in a new cookie-less era.

  • We have already started developing targeting and measurement approaches independent of cookie-based approaches for use on multiple bidding and measurement platforms. Further, as a leading Google partner, will be collaborating closely with Google on the Privacy Sandbox protocols and work hard to bring these solutions to our clients.
  • MightyHive has deep, holistic consultative expertise to bear on these challenges. For example, we have invested heavily into data science, API and Cloud-driven solutions to help marketers gradually increase the utility of their first-party data while simultaneously reducing reliance on third-party cookie pools.
  • As part of S4Capital, with our sister company MediaMonks, our clients are exploring end-to-end digital strategies that leverage first-party data to drive content and programmatic media.

We argue consumers should always be the first constituent in considering the digital advertising experiences online and adapting to this shift requires marketers to place more attention on the value exchange traded for a consumer’s attention. The key will be to move with the market, as opposed to push against it and seek short-term fixes.

As always, MightyHive is your partner and your advocate.

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