"It's the end of the world as we know it, and I feel fine," sang R.E.M. in their hit released at the end of the '80s. Maybe it's a bit of a dramatic statement in the context of digital advertising. But it is likely that we are witnessing the end of one era, our lives with familiar third-party identifiers. Do we feel fine? That is the question, and based on the information we have in our hands, the answer is not really, at least not yet.
Since January, we have been collecting performance data of Google Chrome 1% sample, the audience without 3p cookies. And currently, based on the data in our hands, we actually feel quite uncomfortable. The data tells quite an unpleasant story. The inventory without 3p cookies is valued significantly lower compared to the remaining 99% of Chrome inventory. Everyone knew what was to be expected, but it is different to talk about something that will happen in the future compared to having concrete output in your hands.
Challenges on the horizon
In the big picture, the prebid performance drop seems to be around -50%. The sell-side is not able to monetise cookieless inventory effectively. Or, which might actually be the bigger issue, DSPs don’t know how to place their bids to buy this audience. But let’s get back to the buy side a bit later.
When talking about independent SSPs, all are taking a big hit. But at the same time, we see that different partners might be taking the peak positions in cookieless inventory compared to the reference. These top lists vary publisher by publisher, and finding all reasons for these changes requires understanding each setup, possible SSP curation, usage of IDs, alternative signals and so on.
The same complexity applies to publisher-level comparison. We see that, for example, in the German-speaking market, there are several publishers who are losing less. That was intended to be a positive statement in this context. To give a few examples, we mean publishers whose prebid monetisation has dropped (in cookieless Chrome inventory) only from -10 % to -30 %. Well played in current circumstances. There are several stories behind these better-performing publishers. Still, in general, they all have a healthy split between direct and programmatic, strong monetisation stack and their titles are highly valued amongst buyers.
Does everyone lose?
So, are all sell-side parties losing revenue in cookieless inventory? Not necessarily. In some countries, we've seen that Google’s sell-side stack has been able to strengthen its position. When independent SSPs cannot monetise, there are more leftovers for Google. Unit prices are lower, but when you have enough demand in your pocket, you can shovel the fill higher and increase your share even with lower prices.
Moving from sell-side to buy-side. Same thing here: familiar, independent DSPs seem to struggle heavily with cookieless Chrome inventory. In general, it seems that buyers are even more lost than sellers. There are all kinds of company-specific initiatives to invent a magical solution that works only in our DSP. I get the business opportunistic idea, and maybe some of those initiatives will fly. But the industry needs scalability the most, which will be achieved by supporting trustworthy publisher-provided signals and, of course, browser signals.
It's time to adapt to reality
This market disruption isn’t going away. In the future, there won't be any browsers supporting third-party cookies. The rest of the market will adapt to reality, which we already see in Safari and mobile apps. Timelines might be prolonged, and Chrome Privacy Sandbox might face smaller or bigger changes and new features, but this train is not stopping. And it shouldn’t. The journey won’t be easy, and all stakeholders in the industry need to work together to find alternatives for 3p cookies and new practices.
Do not waste your resources trying to hang on in the past. It is the end of the world as we know it, and eventually, we will feel fine and thrive.
PS. With all its resources, our company, Relevant Digital, is happy to participate in testing and building future-proof solutions. So publishers, sales houses, SSPs, DSPs and all others, ping us if you need help shaping the future of our industry.
