AD TECH INSIGHTS
by Roman Vrublivskyi
Posted on Apr 22, 2024
How Cookieless Advertising is Reshaping Industry
by Roman Vrublivskyi
by Roman Vrublivskyi
What does it mean to be cookieless? Believe it or not, the cookieless world is almost here, and the main reason for this is growing concerns about data privacy. For instance, almost 70% of Americans are concerned regarding the amount of data collected by businesses, while over 80% of users state that potential data-related risks are more important to them than the benefits they may get from a company. Additionally, more than 90% of businesses claim that customers won’t purchase their products if their personal data isn’t protected properly.
Many things have changed along the way, including the programmatic monetization strategies. For this reason, it is important to know what the advertising technology ecosystem has in store for now.
Even though Chrome delayed Cookie shutdown (again) until the second half of 2024, cookieless advertising remains the top programmatic advertising trend of 2024. Therefore, it’s important to start preparing for cookieless marketing now, and this guide is here to help.
So, what are cookies in the first place? Just to refresh our memory a bit – cookies are pieces of data created by a web server. Cookies are used to ‘memorize’ user preferences. Let`s look closer at first party vs third party cookies:
Cookies eventually became the most valuable tool in the hands of digital advertisers who utilize them to deliver targeted ads. Supply partners apply those for web analytics and other purposes.
Unfortunately, some entities found a way to unethically leverage the cookie’s mechanism to compile user profiles for monetary gains. They obtained non-consensual access to users’ demographic data, interests, lifestyle, and financial data; this led to massive privacy breaches.
Some brands see cookie free targeting as a single alternative to the one applying data from online mechanisms for tracking, while Safari and Firefox are already blocking cookies by default. As for Google, it currently collaborates with advertisers to ensure that the transition has minimal impact on the advertising ecosystem.
This is understandable since Chrome has a market share of over 64%. Therefore, going cookieless will impact the marketing industry, the revenues of a typical publisher, and the way we know technologies.
The digital advertising industry, including programmatic, has heavily relied on cookies to gain insights and run cross-site targeting, retargeting, and marketing attribution. Even now, when the world is steadily switching to marketing without cookies and targeted ads without cookies, they are in use. In 2023, 75% of marketers still employed third-party cookies.
Evolving into cookie free advertising, attribution without cookies, and cookieless web analytics won’t happen without some temporary challenges and setbacks. Transparency has a cost. According to a Google study on the influence of cookieless targeting, the most renowned 500 global ad publishers saw a 52% drop in ad revenue.
However, the end of cookies doesn’t mean the end of digital advertising.
That’s all about adopting ad tracking and cookie free targeting solutions that don’t require third-party cookies.
Yes, third-party cookies are being discarded, but it doesn’t indicate that data gathering is becoming purposeless and eliminated. There are many other options for collecting and analyzing data for customized advertising, and proactive advertisers and AdTech companies are already adopting cookieless tracking solutions and marketing practices.
Advertising in a cookieless world will boom in 2024 and will keep evolving in the future. Therefore, it’s essential for advertisers and publishers to start implementing cookieless practices before Google completely eliminates trackers. This is a way to remain competitive and maintain customer trust.
Instead of using cookies, advertisers can collect first-party data. Such information (email addresses, purchase history, etc.) is more credible since it’s provided by users willingly or can be simply monitored without trackers.
To enhance the first-party database, marketers can offer a newsletter subscription, launch loyalty programs, analyze customer feedback, create polls and quizzes, analyze user behavior and purchase history, and so on. Additionally, they may establish partnerships with reputable publishers to gain access to their data as well.
Privacy data is important, and marketers need to adjust. How? By making a direct request, informing users that you require their data for marketing purposes.
They may politely ask users to share their information in exchange for a reward to acquire consensual data. For example, this can be a discount or a free ebook for people who disclose their email addresses. Doing this helps marketers get data ethically and with consent.
Actually, it never really went away. Contextual targeting works with keywords and web content. So, rather than targeting people based on their private info and preferences, advertisers target them according to their preferred content sources.
With contextual targeting, a smartphone ad goes to a phone review website, and a shoe ad goes to a fashion website. This method will be a major programmatic ad trend in cookieless cookieless marketingadvertising.
Advertisers can programmatically serve ads to publishers that have content relevant to their ads. Users will be targeted based on the content they view.
While advertisers need to deliver their ads to relevant audiences, publishers want to monetize their inventory. Therefore, marketers can go for guaranteed programmatic deals with website and app owners who have already shown the most effective performance.
To reach their audiences effectively, advertisers must go omnichannel. For instance, new approaches may include influencer marketing, content partnerships, digital-out-of-home advertising (that can be launched programmatically), etc. This is a way to maximize reach, although it’s important to remember that the performance of every channel should be analyzed continuously — regular analysis enables marketers to refine their strategies on time.
Gathering first-party data and consensual data tracking may be difficult and expensive for small marketers; this is where AdTech companies with relevant resources can help. Advertisers can engage the services of AdTech companies and programmatic advertising to reach a large audience without infringing any privacy laws or regulations.
Now, let’s review some of the solutions that can help answer the question “how to combat a cookieless future”.
SkadNetwork was initiated in 2018 by tech giant Apple to promote cookieless attribution. SKAdNetwork is a privacy-friendly cookieless advertising solution for the attribution of mobile app installations. Its goal is to measure app download conversion rates (CPI) without violating users’ privacy.
AdTech firms are coming together to develop the Unified Identity — as a replacement for cookie trackers but with stringent standards and procedures.
It will obtain authorization via a cookieless authentication. A user is going to provide a single approval for getting personalized ads.
Alphabet Inc. introduced the Privacy Sandbox as a robust initiative that will make Google cookieless. Google is arguably the biggest beneficiary if we talk about third-party cookies, so it needs to be their initiative to provide an efficient cookieless advertising solution.
Google Privacy Sandbox is a collection of different projects aimed at facilitating user targeting without cookies or cross-site targeting. Proposed solutions from Sandbox were initiated not only by Google but also by other partners. Some popular initiatives from Sandbox include FLEDGE and Topics API.
According to Google, the FLEDGE is aimed at retargeting in a cookieless world and creating an audience. Topics API will enable interest-based advertising without tracing a user’s web activity.
Both initiatives are being discussed.
AdTech platforms still largely rely on cookies — ad networks, ad exchanges, DSPs, SSPs, and DMPs. As the world hasn’t completed the shift to the cookieless targeting and attribution mechanisms, cookie syncing still plays an important role in the entire advertising infrastructure — it makes it possible to exchange data between platforms so that targeting remains relevant and effective.
SmartHub also uses cookie syncing technology that enables better targeting of audiences with online advertising. Right now, we are also in the process of preparing the cookie sync mechanism that will keep your SmartHub even more flexible and efficient.
Cookie syncing is a marketing technology that ensures that all the parties involved in an ad transaction have a common insight regarding who gets targeted. Cookie synchronization allows SSPs, DMPs, DSPs, and all other AdTech partners to match up the users in their databases, allowing for the delivery of tailored ads to each user.
SmartHub owners can enable syncing functionality on web traffic for demand and supply partners. This can be done just in a few clicks, but you have to remember that both the demand and supply sides must be synced. Otherwise, it won’t work.
Cookie syncing is essential for online marketing, as it optimizes the advertising process and promotes faster and better outputs. Here are some highlighted benefits.
Cookie syncing is useful for targeting and retargeting campaigns since it allows advertisers to track a user’s location across the Internet. When a person visits a website and interacts with an ad, the advertiser places a cookie on the user’s browser. If the same user visits other websites or apps that use cookie syncing, the advertiser may easily recognize them and target them with tailor-made ads.
Cookie syncing makes it simple to target users based on key criteria such as interests, demography, and so on. Publishers can curate part of their users’ info based on their preferences and search queries. Cookie syncing is then used to transmit this information to the advertising ecosystem.
Business owners involved in advertising and online marketing must take proactive steps to prepare for changes that will happen to third-party cookies.
Publishers should implement consent-giving mechanisms and monetize with contextual ads, while advertisers must move to different targeting and attribution practices.
Ensuring user privacy while serving ads is the main request of the coming cookieless world.
The SmartHub team is currently elaborating on a cookie synchronization mechanism that will make your advertising ecosystem more flexible and efficient. Start your programmatic advertising journey with SmartHub!
SmartHub white-label ad exchange enables companies of different sizes and budgets to launch their own marketplaces and enter the programmatic market ASAP (up to 7 days or just a bit more in case you have specific requirements). Thanks to the rapid launch, companies can achieve payback and revenue growth much earlier than is possible with platforms built from scratch. Explore our guide about how to get started with programmatic advertising.
Our unique model involves proactive customer care and support from a dedicated team of experts who go the extra mile to ensure exceptional business outcomes. With attentive support, expert guidance, and cost-cutting innovative technology, SmartHub delivers a powerful combination that propels your business toward spectacular results.
Explore the case studies of SmartHub with a detailed description of our partners` programmatic business journey and impressive results.
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