Cookies are Crumbling: The Demise of the Third-Party Cookie and What's Next
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Cookies are Crumbling: The Demise of the Third-Party Cookie and What’s Next Everything You Need to Know About Alternative Targeting Solutions and the End of Cookies Increased sensitivity to data privacy and protection amongst consumers and legislators has brands, marketers and tech companies re-evaluating how they reach their customers. Having relied on third-party cookie tracking for years, the ad tech industry is now adapting quickly and testing alternative tracking solutions. The pressure is on to deliver outstanding, personalized customer experiences with cookieless targeting alternatives.
Content
Intro. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03
Third-Party Cookies are Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04
The Transition to Cookieless Targeting: Why Now?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 05
Safe, Effective Cookieless Solutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06
1st Approach: Substitute Third Party Cookies, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
with Alternative Tracking Technology
Demand Side Examples
Supply Side Examples
2nd Approach: Contextual Targeting – Skip Personal Data Altogether. . . . . . . . . . . . . 10
for 100% Privacy-friendly, Legal Targeting
5 Advantages of Contextual Targeting
How Does Contextual Targeting Work?
Bottom Line
Targeting Video Ads with ShowHeroes
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Contact Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Intro
Privacy regulation and consumer data protection are topics that have
been front and center this past year with cookies being the much-
talked about focus. Specifically, third-party cookies are in the hot seat.
Browsers like Firefox and Safari have already abolished third-party
cookie tracking along with Apple’s iOS update in 2020, while Google has
announced it will deprecate cookies by 2023.
Third-party cookies have been the principal tracking technology used
by advertisers and brands to deliver targeted, relevant messages to
consumers. They are also the thorn in a consumer’s side when it comes
to privacy protection.
Cookies will still be used for various functional services,
for example in analytics or e-commerce checkout processes; however,
for targeting and personalization purposes various alternatives are
already being adopted to create personalized web experiences.
We will take a deeper look into how cookieless tracking technology is
evolving and transforming today’s digital landscape.
3Third-Party Cookies
are Out
Let’s face it, cookies are Out and privacy-safe tracking is In.
Third-party cooking tracking has always boasted that through granular targeting
based on browser history, consumers will be exposed to relevant messages and
brands will be reaching the right consumers for their products.
However, pulling back the curtain, cookie tracking has never been very user-friendly
and actually does not efficiently reach all possible, in-target consumers.
Here’s a quick breakdown of the cookie-tracking process:
Third-party cookies, or small data files, are stored in a user’s browser while
visiting a website
Marketers and brands associated with these domains use this information to
build marketing profiles and target ads based on user behavior
User identification requires synchronization across hundreds of ad serving
platforms and tech vendors in order to identify a single user across all
networks. Yikes! That’s a lot of friction.
After all that, cookie-based targeting only captures a fraction of users, meaning the
majority of total traffic and advertising potential is left untapped. Let that sink in for
a minute.
Lack of standardization makes it difficult to respect the latest privacy regulations.
Meanwhile, individual user privacy gets thrown out the window. It’s time for new
solutions.
4The Transition to Big Tech Says
“Buy-bye” To Cookies
Cookieless Targeting:
Why Now?
Mozilla (Firefox) and Apple (Safari) have already eliminated the ability
to perform cross-site tracking with their respective browsers. Google
announced that its Chrome browser cookie deprecation will be phasing
out support for third-party cookies in stages over the next two years,
The kick in the pants to third-party cookie targeting has been consumers’ increased
abolishing cookie tracking by 2023.
concern over privacy and therefore updated legislation and regulations.
As market leader with the largest share in user installations across
Here are the latest global legislation initiatives aimed to protect consumer privacy
platforms, Google’s move to do away with all third cookie tracking can be
and regulate how user data is processed, collected, and used:
considered “the last straw” and manifests the often quoted “death of the
Europe: GDPR – General Data Protection Regulation third-party cookie” or “cookiepocalypse”.
United States: CCPA – California Consumer Privacy Act; Overall, this development has been accelerated by the ever-increasing
CDPA – Virginia Consumer Data Protection Act adoption of mobile devices over the last few years. Mobile has historically
Brazil: LGPD – Lei Geral de Proteção de Dados Pessoais offered even stronger limitations of third-party cookie usage than
desktop devices.
South Africa: POPI – South Africa Protection
of personal information Apple’s most recent IOS 14.5 update has changed its opt-in policy making
Apple products literally cookieless. Now developers must ask permission
These laws, and many more that are this close to being approved, are putting
before tracking iOS users for ad targeting.
consumers’ privacy and data protection front and center on a global level while
continuing to raise the bar for compliance.
“This opt-in requirement marks a big shift for smartphone users’
The European Union’s ePrivacy Directive, requires user consent for “non-essential
privacy because it makes developers responsible for addressing
storing of information”. Consequently, users have become accustomed to the
privacy, not users. It’s estimated that iOS users granting permissions to
ubiquitous consent banners popping up while browsing the web.
developers will experience a massive drop, from 70% to 10%.”
Consent will be integrated even more closely and seamlessly with future alternative
tracking technologies, and will remain the main focus for worldwide data protection
Needless to say, there is a sense of urgency to get ready for the
laws like GDPR, LGPD and CCPA / CDPA, and POPI.
cookieless shift.
5Safe, Effective
Cookieless Solutions
While third-party cookies for targeting audiences will be phased out,
free internet needs efficient alternatives in order to sustain ad-based
business models and secure independent, quality journalism.
By and large, two major solutions can be identified to reach this goal:
1 Substitute third-party
cookies with alternative 2 Contextual targeting:
Skip personal data
tracking technology to ensure altogether for 100%
continued individual-user and privacy-friendly, legal
behavioral ad targeting targeting
Let’s take a closer look at both options.
61ST Approach:
Alternative Tracking Technology for
Individual-User and Behavioral Ad
Targeting
Due to the growing legislation outlined above, user consent for storage
and processing of personal data is (and will remain) a permanent
requirement when formulating alternative cookieless solutions.
Whichever technology is implemented to replace third-party cookies, it
must respect individual user consent in compliance with ePrivacy, and
state or national legislation, via the likes of privacy data centers and
consumer-unique IDs that ensure transparency and control over each
users’ data across the entire (advertising) value chain.
Depending on the perspective on the industry, such technologies and
approaches can take on many different forms.
To name a few examples:
7Demand Side
Examples
Login-based brand experiences such as loyalty Proprietary Universal ID solutions Cohorts and Data Clean Rooms
programs, platforms and magazines or similar
Universal ID, or shared ID, solutions attempt to map Data clean rooms are places where walled gardens
offerings.
1:1 what was previously done with cookies by using like Google, Facebook and Amazon share aggregated
This option requires a lot of resources to build, first-party data and offline data to create a user rather than customer-level data with advertisers,
distribute and promote but it comes with many identifier (user ID). while still exerting strict controls.
advantages.
Key players in the global programmatic landscape are First-party data from the advertiser is added to the
First off, collecting first-party data with a sign-in offering their own Universal ID solutions. The Trade same space in order to compare how it matches with
process can potentially help with tracking and analysis Desk, for example, has its own proprietary aggregated data from other platforms. With this
of Point of Sale (PoS) traffic and offline purchase “Unified ID 2.0” technology which can be used by any process, one can evaluate how different data sets
data. Login data is considered the highest standard SSP, DSP or DMP. Its solution offers potential for very match up, and then determine whether the right
of consumer data as it implies consent and accuracy, high market penetration and net reach. ads are reaching the same audiences and how many
and it can be used as granular input for targeting and times.
There are other, similar offerings from the Advertising
personalization.
ID Consortium, DigiTrust, and ID5. You can check out Data clean rooms can deliver ad impression data at
Secondly, the level of insight can be vast due to a full list of the top Universal ID companies here. massive scale; however, they are expensive to build
the depth of data that can be sourced. Collecting and working with large corporations like Google,
Many of these IDs are leveraging first-party cookie
and segmenting this data has the potential to give Facebook and Amazon can be time consuming and
technologies and are available through prebid.org’s
advertisers a high degree of understanding of their complex. Discover more information on Cohorts and
header bidding stack.
audience and target groups. Data Clean rooms in our article “Cookieless Targeting
Solutions.”
8Supply Side
Examples
Unified Logins and First-party data Publisher consortiums
Just as advertisers strive to create closed, controlled ecosystems to help identify users In a similar, yet technologically different approach, publishers are joining
permanently, publishers can use login IDs or single sign-on technologies to track users forces, looking to deploy consent and first-party cookie based concepts
across devices and over time. in an attempt to be able to track users across their digital offerings.
Email addresses, in particular, will become the main focus for publishers. It’s even more This is how it works: consortiums provide a framework to include
valuable when consumers validate this data; for example, when a user signs up to people-based identifiers in programmatic transactions and provide an
receive emails or text messages in return for a discount or other benefit. open and standardized pool of cookie IDs and device IDs.
They can be a suitable alternative for long term, reliable user identification, albeit with An example from the German market would be Ad Alliance. Another
some drawbacks. For first-party targeting to be effective and accurate, one needs a lot well-known company is the Advertising ID Consortium.
of data to gain enough insightful information combined with AI and machine learning.
One solution is joining a consortium or finding a first-party data partner to stay
profitable. In many regions, publishers and media houses join forces to expand the
reach of such systems across their combined inventory, for example, NetID in the
German market.
92ND Approach:
Contextual Targeting –
Skip Personal Data Altogether
for 100% Privacy-Friendly
and Legal Targeting
About a decade ago, when new concepts, then collectively dubbed as
“web 2.0” paved the way for user generated content, scalable SaaS-
offerings and flexible data management (“folksonomy”), topics like
contextual data and contextual targeting were en vogue. However,
the adoption of contextual data sources for targeting online ads never
became the definite choice – until now.
Contextual targeting today uses semantics, natural language processing
of on-page text, the URL and meta information, combined with artificial
intelligence and data processing in real time.
As cookies vanish from the scene, contextual targeting concepts are
quickly becoming an interesting and even superior targeting alternative.
The digital sector is focusing on quality editorial environments and this
is where contextual technologies really get to shine as they respect data
privacy legislation and help sustain independent editorial models.
105 Advantages of How Does Contextual Looking at the user’s referrer opens up a rich
Contextual Targeting Targeting Work? set of possibilities. Having information on the
website a user has browsed before visiting
Let’s underline the last point in the list of the current page, provides an opportunity to
1. Content is the vehicle which creates the advantages: analyze that very page as well, which does
right environment for user awareness and not lead to one, but two different user groups
engagement. Contextual targeting removes the need to as pieces of information about the current
profile and track individual users user. And these are even in chronological
2. Consequently, placing content and advertising Cookieless targeting does not work with order, which can be interpreted as a priority
messages in the “right moment” maximizes users but with user groups. against one another.
brand awareness and campaign performance
User groups are identified by the particular In practice, it is very unlikely for an individual
content of the website they are visiting user to perform the exact same user journey
3. Brands can easily learn which content drives over and over, which means that, despite the
awareness and engagement and invest at a given moment, in combination with
additional properties that are not connected absence of a frequency capping mechanism
accordingly, in turn, increasing ad efficiency. in the traditional sense, it is very unlikely that
to the user as such, e.g. device type, OS,
browser, referrer (URL), etc.. a user will be flooded with ads of the same
4. Machine learning algorithms read, process, kind. While navigating the web, users jump
expand and capitalize on the ever-changing This means that users change the group they from group to group and from moment to
contextual moments. In other words, artificial belong to depending on the website they moment. In other words: from context to
intelligence is a brand’s best friend, helping to are surfing. On the one hand, implementing context, while being served related ads along
sift through the maze of available data points. frequency capping is impossible. But on the way.
the other hand, it’s not even necessary.
5. Contextual targeting removes the need to The advertisement that will be delivered As a moment passes, it is unlikely for it to
profile and track individual users. is determined by the user group that is return in the exact same form - just like in
predicted (calculated) for the given website. real life.
When a particular user switches to another
website, he/she changes user group and,
along with it, the campaign that is being
targeted for that user group.
11Bottom Line
Targeting Video Ads with moment, and are also likely to convert into
ShowHeroes an impression, gaining high view through
rates for the advertiser.
Following the path of context-based ad It works entirely without cookies and draws
distribution, Showheroes Group offers rich knowledge from aggregated performance
performance gains over traditional targeting data that cannot be connected to any real
It turns out that without cookies, strategies while respecting privacy and user. For the sake of illustration, here’s an
brands are actually able to present personal data protection.. analogy seen in e-commerce solutions to
cross-sell products regarding a well known
more interesting, relevant ads to Our core business has focused on
behavioral targeting approach:
sustainable solutions with contextual
users. Cookieless user tracking forces targeting technology instead of identity People who bought “X” were also
solution providers and marketers resolution methods as a means to deliver interested in “Y”.
precise audience profiling.
to think deeper about their target Webpages on which ad campaign “X”
As part of its video advertising solution,
audiences’ needs and related user ShowHereos has developed a yield
performed well, are also likely to deliver good
results for campaign “Y”.
journeys. optimization system that takes into account
the current website and the content video This collaborative filtering approach
played within an individual ad based on generates a lot of data to be used for
historical data. Combining these two factors, campaign-based delivery optimization, while
the ShowHeroes AdHero predicts which simultaneously preserving user anonymity
available campaigns and programmatic deals and privacy.
are eligible for a specific placement at a given
12Summary
Following suit, the cookie is literally crumbling under the weight of
ever increasing technological requirements and privacy legislation As
it continues to fall short of these, plenty alternatives are available to
bridge that gap and ultimately improve on what once has been the de
facto standard for an entire industry.
Despite the fact that Google, Facebook
and Amazon occupy “just under While user tracking will still be available through a multitude of
different technological approaches and in varying degrees of scope,
70% of all digital ad dollars spent” reliability and effectiveness, all signals seem to be pointing in the
according to eMarketer, the market is direction of contextual targeting as the leader of the pack for future
targeting technologies. The fact that it does not rely on any personal
vast and heterogeneous as it keeps user data whatsoever, gives it a huge advantage in terms of adoption.
evolving and becoming more complex. With contextual targeting, there is virtually no risk involved with
existing and future global data privacy legislation. Instead, it offers a
wealth of benefits in terms of delivering online messages, including
ads, to users in a way that respects and protects their privacy and
personal data.
13One More
Thing... Are you an Advertiser?
Do you want to learn more about cookieless,
user-friendly targeting strategies and
ShowHeroes solutions for advertisers?
info@showheroes.com
Are you a Publisher?
Learn more about what
ShowHeroes can do for you at
www.showheroes.com/publishers/
Did you know that ShowHeroes Studios
offers scalable, fast, tailor-made production of high
quality video content?
www.showheroes.com/content
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