AI Will Solve the Cookie Conundrum but Advertisers Must Act Now

Sorting a large amount of data on a dark background.

By Mateusz Jędrocha, Head of Upper Funnel Solutions, RTB House

2023 is set to mark an evolution in advertising, as the industry finally moves away from third-party cookies to a privacy-first ecosystem. It’s a change that should have happened by now, but it’s been hampered by Google’s delays to cookie deprecation and advertisers’ reluctance to switch to more ethical advertising practices for fear they will no longer be able to reach the right audiences at scale.

The increasing pressure on advertisers from consumers and the wider industry to demonstrate values and respect user data however, means the industry is out of excuses to not put consumer-privacy first. Users are becoming more anonymous and conscious about the data they share and regulators more specific in terms of their expectations towards the advertising industry. It’s clear, the time for advertisers to act is now, but how should brands go about it?

The recession of opportunity

Inflation is soaring across all sectors and as a recession hovers on the horizon, brands would be forgiven for thinking the best course of action is to reduce marketing budgets until the financial situation appears rosier. In fact, the opposite is true. Research has consistently shown that companies that decrease their marketing spend during a recession are left in a less competitive position when the economy recovers. What’s more, a time of lower media demand, offers a great opportunity for brands to trial different inventory, test new solutions, and generally make use of less crowded space often at a reduced cost.

Discovering audiences with Deep Learning

For brands to reach the right consumers, they need to ascertain where they spend most of their time. Many marketers wrongly assume this isn’t possible without cookies but Deep Learning technology, which is designed to mimic the way the human brain functions, can interpret and analyze data at supersonic speed to understand user intent and learn from it. It even has the ability to identify audiences who may not be directly searching for a particular brand, but who would be interested in its products or services.

The contextual targeting comeback

One of the best anonymous targeting solutions is also one of the industry’s oldest: contextual targeting. The popularity of this method dipped when third-party cookies became popular, but breakthroughs in AI technology are making contextual targeting more viable than ever. The right contextual solutions enable brands to build segments of audiences in a privacy-safe way through Natural Language Processing and the predictive power of algorithms. These same algorithms can then reach audiences in the most efficient means possible by intuitively understanding exactly which ad format and content to display to each individual, creating a highly-personalized experience.

Enthralling ad formats

Figures suggest individuals are exposed to anywhere between 4,000 to 10,000 ads a day. No more than a few of these will pique an individual’s interest, so creating cut-through is no small feat. Fortunately, digital advertising has come a long way since the days of static banner ads; advances in AI have significantly enhanced the creative possibilities for ads across all formats. Interactive and immersive campaigns are what brands should be focusing on to really enthral consumers. There are hundreds of ways brands can get more creative with their campaigns; from banners that encourage users to actively engage by liking or disliking the content, to dynamic video that is optimized in real-time to reflect what is going on at any specific moment.

New channels offer fresh possibilities

Brands should also be open to testing new channels to discover if their budget could be proportioned more effectively. The launch of Netflix and Disney+ ad tiers have brought a whole new dimension to the possibilities for CTV advertising, which is a more measurable and addressable alternative to linear TV, as well as being more popular with younger consumers. Likewise, in-game advertising, a staple of Gen Z and Millennial audiences, is a great way for brands to reach these key consumers at their most engaged and active in a non-intrusive way.

The privacy-first advertising evolution is something to be embraced by brands. A wealth of opportunities have opened up for the post-cookie era thanks to advances in AI technology. With the right approach and the right partners, advertisers can target consumers more effectively than before, with exciting, meaningful campaigns that also respect their privacy. Ethical advertising practices are soon to become fundamental to both consumers and the industry at large, and brands that neglect to overhaul their marketing in favour of a privacy-first approach in 2023 will pay for it later.