The phasing out of third-party cookie support continues to be a headache for publishers, especially from the perspective of programmatic advertising revenues. Programmatic targeting has relied mainly on third-party cookies, and this targetability has influenced advertising outcomes and, thus, the value of ad inventory. Naturally, the more significant the proportion of advertising revenue that comes programmatically, the more substantial the impact of the removal of cookie support can be.
Google has announced the initiation of a testing phase in early 2024, planning to block 1% of third-party cookies in the Chrome browser. This can be seen as an indication that the phase-out will likely occur gradually. This approach would allow publishers to assess the impact and fine-tune their practices before the final removal of support in the second half of 2024.
According to Digiday, the future without third-party cookies still appears unclear to publishers, even though they have had time to prepare since the initial announcement in 2020. Many publishers seem to think that investing in alternative methods is only worthwhile when something concrete related to the removal of cookie support happens, as the belief in delaying the deadline remains strong.
However, many publishers have actively tested various targeting methods for transitioning to a cookieless era. Despite this, there is a consensus that measuring the impact of different methods on CPM (Cost Per Mille) prices has been challenging. Best practices will likely become apparent only after the support for third-party cookies in the Chrome browser ends. This was also a prominent topic at the Prebid SUMMIT held in New York in October, where it emerged that publishers find the number of alternative solutions somewhat overwhelming.
In this text, we delve deeper into alternative targeting methods, such as contextual targeting, first-party data, and shared identifiers, and share experiences from using these methods. For a more comprehensive list of other alternative targeting approaches, you can find it here; the linked text also discusses the impacts of the removal of cookies on different stakeholders more extensively.
How does contextual relevance define the future of digital advertising?
Contextual data and the associated targeted advertising are among the methods we believe will play an increasingly important role in the future.
Contextual targeting is based on understanding the meaning of content. Practically, this means advertisements are shown to audiences reading or viewing content that is related in some way to the advertiser's products or services. According to OpenX, contextually relevant ads are 73% more likely to be remembered by people and have a 14% greater impact on purchasing decisions than ads that are not contextually aligned.
Contextual data offers publishers benefits from various perspectives. Clearly, more effective advertising positively impacts the attractiveness of inventory and eCPM prices. Moreover, contextual data helps publishers better understand the commercial value of different content and optimise ad inventory pricing and content strategy. Contextual targeting doesn't require collecting or using personal information, allowing publishers to comply with privacy regulations like GDPR and CCPA more easily. This option thus presents a sustainable future alternative for advertising targeting.
The advancement of artificial intelligence and machine learning enables increasingly accurate and diverse contextual analysis, which can further enhance the effectiveness and relevance of advertising. The market offers several technologies focused on content analysis, whose implementation and integration into advertising technologies are relatively straightforward, though the partner's quality should be considered.
Relevant Digital collaborates with contextual intelligence expert Neuwo. Through this partnership, our clients can seamlessly utilise Neuwo's content classification and contextual targeting via Relevant Yield's HB Analytics. Neuwo offers publishers content value analysis based on IAB taxonomy and HBA Prebid data, along with the ability to convey taxonomies to buyers through Prebid. Utilising IAB taxonomies is also possible in direct sales. Neuwo's language support includes Finnish, English, Swedish, Danish, Norwegian, German, Italian, and Portuguese. If you want to learn more about this, please contact us.
What is the role of first-party data in the future?
First-party data management and utilisation should be a primary goal for every publisher looking to increase sales and leverage valuable information for deepening and engaging customer relationships. First-party data is collected directly from a publisher's site visitors and customers. It can be gathered, for example, by offering online content that requires login. By activating these registered users, they can be encouraged to provide more information about themselves.
First-party data allows for the collection of more precise information about site visitors and customers, enabling more tailored service and communication. Advertising based on this data is more effective, improving conversions and reducing waste, thereby building better relationships with more satisfied advertisers. Since first-party data is collected directly from customers and own audiences, it often involves fewer privacy and security risks than third-party data. First-party data also enables more flexible responses to market changes and evolving customer needs.
By leveraging first-party data, publishers have achieved significant results: according to The Guardian, attention for specific campaigns has increased by up to 102%. Similarly, both click-through and conversion rates have improved considerably, demonstrating the strong impact of data on marketing effectiveness. Digiday's research indicates that brands mainly trust first-party data and have focused heavily on collecting this data and developing capabilities in preparation for the transition.
First-party data is relatively easy to collect and manage, and many tools are available in the market for its collection and management.
In October 2023, Google Ads launched a new tool that enables companies to manage their first-party data centrally. The Google Ads Data Manager allows for the analysis and use of consented first-party data from various sources, respecting privacy. The aim is to facilitate managing and utilising first-party data in marketing, reducing the need for technical expertise. Other options for developing a publisher's first-party data strategy include Piano.io and Gravito, both partners of Relevant Digital. For more information on these, feel free to contact us.
How are Universal IDs changing the playing field?
Universal IDs enable publishers to utilise first-party data, such as email addresses, names, and clicks, for advertising targeting and other personalisations without needing third-party cookies and compromising user privacy.
These first-party information identifiers can be shared across the digital advertising ecosystem, such as Demand-Side Platforms (DSPs). Tests using shared identifiers have achieved significant results, especially in cookieless browsers like Safari and Firefox. Due to these positive outcomes, shared identifiers have gained trust as a targeting method.
Most IDs are built from both deterministic identity data (personally identifiable information such as names and email addresses) and probabilistic identity data (combining individual pieces of information from different sources, such as device and browser usage, for probable user identification). Regarding ID service providers, for many, an email address serves as the most common data type for building the identifier.
Service providers must comply with EU data protection regulations and some U.S. state privacy laws, such as the CCPA. Most companies encrypt user data. Others go a step further by offering continuously changing ID tokens. These tokens protect information and help avoid delays between a user consenting to receive personalised marketing and potentially opting out of personalisation on another publisher's site or device.
You can easily implement an ID solution through Prebid. With a vast array of options, publishers may need to exert effort to understand which ID solution is most suitable for them. Key features and ideal use cases can vary among providers. Testing different ID module providers would be an interesting starting point, but it's a time-consuming approach in practice. You can save time and money by focusing on ID solutions that have public supporters in the ecosystem.
A good option is ID5's solution, which collaborates with over 70 technologies (including Relevant Yield) and is active on over 100 000 websites, reaching over 400 million visitors daily. Learn more about ID5 here, and feel free to ask us for more information. You can also explore ID5's recently published "The state of digital identity 2023" report here. According to ID5's research, a significant 72% of respondents have implemented one or more identity solutions, and 20% plan to adopt an alternative solution in the coming months.
Watch ID5's explanatory video on Universal ID here.
How do you build a sustainable future?
The digital advertising ecosystem is on the brink of significant change with the phase-out of third-party cookies. A survey by Digiday and Google reveals that only 9% of publishers are ready for this shift, while 73% are still working on their plans and 11% haven't even started. Even though the change is imminent, there is still a lot of uncertainty about how the programmatic advertising market will operate post-change. There's also a strong belief that the timeline will be postponed.
We are not alone in facing this new situation; it is shaking the entire industry. However, many see this situation positively, primarily as an opportunity for growth and innovation. Publishers who delay adopting and testing different alternatives will likely face the risk of revenue loss in the second half of 2024. It is now most crucial for publishers to focus on the future and continue building sustainable solutions. Quoting Adexchanger's editor-in-chief, Allison Schiff: "The best time to have started testing cookie alternatives would have been... yesterday. The second-best time is now."
If you work in digital advertising sales and development and feel you need coaching or consultation on how to improve your capabilities in advertising targeting and website personalisation without third-party cookies, please don't hesitate to contact us. If you simply want to stay informed about how the situation evolves, consider subscribing to our newsletter here.