Google’s announcement on Tuesday that it will phase out support for third-party cookies in Chrome within two years is an early contender for story of the year. Some expected this was coming, and the industry had already been planning for a future without third-party cookies thanks to similar moves from Safari and Firefox. But Google’s announcement confirms once and for all that the advertising industry has no choice but to adapt to life without third-party cookies.
VAN spoke with industry experts to find out how the changes might be expected to impact video:
This was somewhat of an inevitable outcome, and I think most people were already expecting this to happen at some point. All the efforts from all the browser vendors over the past years has been to restrict cookies and user tracking to an ever-increasing degree. Whether it’s browser companies or regulators, new changes in data privacy are downscaling third-party cookie tracking and collection.
This will have a major impact on the category. Whole industries within it have been built on cookies to do anything ranging from A/B tests to ad targeting. It will take significant engineering across the industry to adapt to these new changes and for companies to find alternative solutions to the same problems.
What does matter to us is that this will shift the industry from user-level targeting — which will become harder and harder as user tracking gets locked down by browsers — towards contextual targeting. Rather than showing you a Nike ad because you were shopping for shoes two hours ago, you’ll get a Nike ad because you’re reading about the Olympics. Contextual targeting is a return to traditional online ad campaigns, where reaching a consumer meant showing up on the right article or piece of content.
With that said, modern contextual targeting is more data-driven and bleeding edge. It incorporates new technologies like AI and semantic science to ensure ads run on the right website and the right page, targeting the right audience. In a way, it’s very similar to brand suitability and brand safety targeting.
Although Google may end up enhancing users’ privacy by eliminating third party cookies, this transition really just massively solidifies their hold over the ad industry. Google’s decision to phase out third-party cookies in Chrome is challenging the fundamentals of how digital advertising works. It will definitely cause the whole ecosystem – and what will remain from it – to adapt to a world with less tracking information available on the web. As a powerhouse in the space, the biggest winner will be Google, which will benefit from leveraging more and more of their own data gathered from their own assets.
Following the introduction of GDPR and CCPA, this Chrome transformation presents a challenging time frame for publishers to build a platform within a cookie-free ecosystem that minimizes impact on the company’s monetisation strategies.
As we enter the new connected decade, user experience, transparency and privacy should be top of mind for all businesses operating in the digital advertising space. The video industry is moving towards a cookie-less environment and Google’s latest announcement further proves this. One way SpotX’s clients are preparing for this shift is to explore the opportunities of contextual advertising. GDPR served as a critical reminder that effective advertising is a balancing act. Future marketers can benefit from taking a more measured approach when it comes to focusing entirely on the audience and considering the power of the environment an ad is served in. This reinforcement on careful curation and thoughtful planning from advertisers is undoubtedly a positive step. If this approach is adopted by the industry as a whole, rather than creating more silos, users will ultimately benefit.
I appreciate that this phase of uncertainty is over, now we have a decision and the rumours can end. So we have a two year window in which we can work as an industry to find a solution that respects privacy, while still bringing the many benefits of programmatic to consumers as well as publishers. The need for an ad-funded internet has never been bigger than it is today.
When you look at video, connected-TV, and out-home-home, those have always been evaluated in a hybrid fashion. We’ve used panels, or other qualitative measures, or macro-econometric modelling etc. The gold standard for video, in the sense of TV, has never been the cookie, so its effectiveness won’t go away.
What will change is how well we can optimise for programmatic trading, but it will still be better than doing nothing. There will still be lots of signals which we can act on, and quite a lot of things will move from the server into the browser. So quite a lot of what we do today will still be possible tomorrow, within the browser, in a privacy sandbox.
Some things won’t be possible, and certainly the massive spread of user IDs outside of the control of the user is finally coming to an end, and I think overall that’s very good for the industry.
Two years is a good timeline. We’ve always said it will be an evolution, not a revolution – two years isn’t long for evolution, but in advertising, two years is a long time!