How Cookieless World Will Affect Advertising?

The increasing demand for user privacy is influencing a major industry shift as stakeholders are forced to reinvent their data collection practices. According to a study, over 90% of customers worldwide are worried about the amount of information brands can obtain about them and how this information is used. As a result of these issues, users and policymakers have begun to advocate for a cookieless world.

What are cookies, and what is the connection between cookies and privacy concerns

In 1994, web scientist Lou Montulli came up with the term cookie- it describes pieces of data created by a web server to identify users who have visited a website, in the nutshell, they are used to ‘memorize’ user preferences. Cookies eventually became the most valuable tool in the hands of digital advertisers who utilized them to deliver targeted ads. Also, publishers and site owners use them for web analytics and other purposes.

Cookies serve a useful purpose, at least with the original intent. It made surfing the internet much easier by eliminating the need to re-identify users each time they visit a page.

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 demographic data, interests, lifestyle, financial data of users; this led to a massive backlash over privacy breaches.

In response to the privacy-breach concerns, governments and big companies came up with regulations, policies, and data tracking restrictions (ePD, GDPR, ITP, ETP, etc).

Technically, third-party cookies are the data-collecting files that are generated by websites in order to personalize a user’s browsing experience, cookies are stored in a user’s computer. In essence, this means a web page is tracking a user’s digital activity without the user’s permission and without them knowing. It was quite a widespread practice up until recent years.

Google Ads use cookies to display targeted ads for things you searched for or browsed about on websites. But this only happens because most browsers permit it.

Recently, we have seen many cookieless browsers spring up as a response to user-privacy concerns. Only recently, Apple’s Safari and Firefox discontinued support for cookies. Almost everybody now seems to be promoting a cookieless world in support of privacy rights.

In February 2020, Google announced the shutdown of cookies in Chrome. They explained that this action was made to safeguard users who had requested additional privacy. Currently, Google collaborates with advertisers to ensure that the transition has minimal impact on the online marketing sector.

This is understandable because, with over 62% of the total browser user-base, Chrome is the most popular web browser. So going cookieless will significantly impact the marketing industry.

What does cookieless future hold for programmatic advertising and the digital marketing industry?

The digital advertising industry, including programmatic advertising, has heavily relied on cookies to gain insight, run cross-site targeting, retargeting, and marketing attribution. According to a recent survey conducted in the United States, more than half of top marketers believe cookies are critical to their marketing approach. Another report claims that at least 80% of all marketers employ cookies.

Evolving into cookieless ads, cookieless attribution, and cookieless web analytics will not happen without some temporary challenges and setbacks. According to a Google study on the impact of cookieless targeting, the top 500 global ad publishers saw a 52 percent drop in ad income.

But the industry must certainly move on, and advertisers must find a way to run cookieless targeting, cookieless retargeting, and cookieless attribution.

What is cookieless tracking?

This means adopting ad tracking and targeting solutions that do not require third-party cookies.

So how does cookieless tracking work?

Third-party cookies are being discarded, but it does not indicate that data gathering is becoming purposeless and eliminated. While they were a valuable tool for marketers in the past, they are no longer necessary. There are many other options for gathering and analyzing customer data for customized advertising, and proactive advertisers and adtech companies are already adopting cookieless tracking solutions.

Switching to a cookie-free strategy will necessitate more than a few minor adjustments. Here are a few cookieless tracking solutions that show how cookieless tracking works.

Adopt consensual information gathering

Privacy rights are important, and marketers must devise ethical ways to obtain consumer data in a consenting manner. This could be done by making a direct request, informing them that you require their data for marketing purposes.

You may politely ask users to share their information in exchange for a reward to acquire consensual data. For example, you may give a discount or a free ebook to people who disclose their email addresses. Doing this helps you get data ethically, and with consent, so you are sure of not infringing any privacy law.

Contextual targeting is coming back

It never really went away!

In the past, contextual targeting was an effective ad targeting strategy, but people thought it was a little slower in achieving positive conversion outcomes. Contextual targeting works with keywords and web content. So rather than target people based on their private info and preferences, you target them based on the 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 following the cookie era. Advertisers can programmatically serve ads to publishers that have contents that are relevant to their ad. Users will be targeted based on the content they view and not other personal metrics such as search strings, interest, behavior, etc.

Collaborating with Adtech companies

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 out. Advertisers can engage the services of adtech companies and programmatic advertising to reach a large audience without infringing any privacy laws or regulations.

Let’s consider some of the cookieless solutions some tech companies will soon use.

Apple’s SkadNetwork

The SkadNetwork was initiated in 2018 by tech giant Apple to promote cookieless attribution. SKAdNetwork is a privacy-friendly cookieless solution for the attribution of mobile app installations. Its goal is to measure app downloads conversion rates (CPI) without violating users’ privacy.

What is cookieless attribution?

It means that marketers can measure their advertising campaigns’ performance and conversion rate without tracking individual user data. Apple’s SkadNetwork is doing this by aggregating data directly from its app store facilitated by the Apple server, (which is disconnected from user identifiers).

Unified Identity

Adtech firms are coming together to develop the Unified Identity- as a replacement to cookie trackers but with stringent standards and procedures.

It will function by obtaining authorization via a single cookieless authentication. A user just needs to give a single approval to receive personalized ads. This tool is a public and free-to-use initiative.

Sandbox

Alphabet Inc introduces the Privacy Sandbox as a robust initiative that will make Google cookieless. Google is arguably the biggest beneficiary of third-party cookies, so they are expected to provide an efficient solution to replace cookies.

Google Privacy Sandbox is a collection of different projects aimed at facilitating user targeting without cookies or cross-site targeting. Proposed solutions from the Sandbox are not only initiated by Google but other partners. Some popular initiatives from Sandbox include FLEDGE and Topics API.

According to Google, the FLEDGE is aimed to enable cookieless retargeting and custom audiences creation. Topics API will facilitate interest-based advertising without tracing a user’s web activity.

Both initiatives are still under review.

Specifics of Cookie Syncing on SmartHub

As of now, the majority of ad tech platforms still 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 for the entire advertising infrastructure – it makes it possible to timely 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 advertisements. Right now, we are also in the process of preparing the cookie sync mechanism that will keep your system even more flexible and efficient.

What is cookie syncing and the specifics of cookie syncing on SmartHub?

Cookie syncing is a mechanism that ensures that all the parties involved in an ad transaction have a common insight about who they are targeting. Cookie synchronization allows SSPs, DMPs, DSPs, and all other ad tech partners to match up the users in their databases, allowing for the delivery of tailored ads to each user.

Most ad tech platforms, such as ad networks, ad exchanges, DSPs, SSPs, and DMPs, still rely on cookies. Cookie synchronization is still essential to the entire advertising infrastructure because the world hasn’t fully transitioned to cookieless targeting and attribution systems. Also, It allows for timely data exchange between platforms, ensuring that targeting stays relevant and effective.

Benefits of cookie syncing

Cookie syncing is essential for effective advertisment, it optimizes the advertising process and promotes faster and better outputs. Here are some highlighted benefits.

Targeting and Retargeting

Cookie syncing is useful for targeting and retargeting campaigns since it allows advertisers to track a user’s location across the internet. For instance, 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 a more personalized ad.

Detailed targeting

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 network.

Maximize ad spend

Cookie syncing enables you to maximize your ad spend by identifying converted users and automatically taking them off the target list. This allows you to focus your resources on potential customers alone.

SmartHub also employs cookie synchronization technology, which allows for more precise audience targeting with web adverts. We are currently working on a cookie sync mechanism that will make your system even more flexible and efficient.

Where do we go from here?

Everyone involved in advertising and online marketing must take proactive steps to prepare for changes that will happen with third-party cookies. Publishers should implement consent-giving mechanisms and monetize with contextual ads, while advertisers must shift to alternative ways of targeting and attribution. In the end, ensuring user privacy while serving ads is the main request of the future cookieless era.