Why Post-Cookie Targeting Solutions Can Not Retread Old Ideas

By Michael Beebe, CEO, Dstillery

The advertising technology industry has spent most of the past 18 months developing plans and products to fill the white space in targeting that will be exposed when Google finally stops supporting third-party cookies in its Chrome browser.

By adjusting the timeline until late 2023, Google just gave the ad industry a lot more time for research and development, and you’d be hard-pressed to find anyone who didn’t appreciate the longer timeline. That’s because many of the proposed solutions that have emerged to date are really simple retreads of old ideas.  This is not a moment for retrograde thinking — it is a moment for the industry to innovate.

Path of Least Resistance

For advertisers, the path of least resistance may be to fall back on targeting technologies available today that are not dependent upon cookies or to rely on one or more yet-to-emerge ID spaces to replace cookies.

As far as currently available solutions, proposals usually involve one or more of the following strategies:

  1. Double down on first-party data to target existing customers who have opted in to receive an advertiser’s messages
  2. Return to classic contextual targeting, using words, images, audio and video on the page to show ads in environments that are brand-safe and relevant
  3. Dedicate even more budget to the walled gardens that benefit from a large base of opted-in users with consent.

Surely, brands and their agencies will employ all of these strategies to some degree, but they each come at a cost. Plainly stated, this is why the opportunity for innovation in programmatic is so great.

 

When brands focus messaging against first-party data, they sacrifice new customer growth opportunities. Needless to say, abandoning any method of new customer acquisition in a crowded advertising market is not a sound business strategy. Yes, brands can try to find new prospects who look exactly like current customers, but without cookies and retargeting, that will become more difficult.

By allocating more budget to classic contextual, brand marketers give up precision, which deteriorates return on ad spend. Most advertisers are aware that contextual goes beyond basic keyword targeting, but it is harder to create a perfect match between ad and customer interest when using page signals alone.

If brands increase reliance on walled gardens, they cede control of customer relationships to these massive platforms. These behemoths share woefully little data or insight with the brand and agency, forcing marketers to rely on a black box of reporting. It is sort of the opposite of relying on first-party data — the brand might get scale and new customer opportunities but at a loss of any insight into their best customers or prospects.

Those are the options available now. As for what will be available in the future, there are a number of strong proposals across the industry for IDs that are functionally equivalent to third-party cookies, yet respectful of consumer privacy.

The Trade Desk’s UID2, LiveRamp’s ATS, LiveIntent’s nonID, ID5’s Universal ID, and Britepool’s ID have all emerged as independent options, while Google is developing a one-to-several solution called FLoCs, or Federated Learning of Cohorts. FLoCs propose to protect consumer privacy by grouping users into cohorts with similar behaviors and allowing one-to-several, rather than one-to-one tracking and targeting.

This emerging multi-ID space will definitely occupy a valuable place in the post-cookie targeting landscape.  These solutions do not suffer the same drawbacks as the options described above, but they do have their own

Most notably, the opt-in paradigm of the one-to-one proposals means these new identifiers will have much less scale than cookies. Given the number of competing proposals, the multi-ID space will be fragmented, introducing tremendous complexity.

Embrace the transition

The transition away from cookies gives advertising organizations choices. Anchor to the familiar, such as first-party data, contextual advertising, walled gardens, or a raft of cookie-like IDs. Or, brands and agencies can embrace the transition.

The readily available cookie-free options come with clear limitations, and simply substituting an emerging identifier for cookies carries lots of uncertainty. Simply settling for a substitute is not going to give advertisers what they are looking for, and they will undoubtedly express disappointment.

But resting on one’s laurels and waiting for the ideal future path to emerge is the opposite of innovation — it is passive. Brands and agencies can proactively develop new solutions to the issues of targeting and privacy. This requires these organizations to embrace some of the new limitations, rather than finding new ways around the resistance.

If brand marketers only have access to certain signals, how can they combine them to deliver the best ad experiences? How much are brands willing to invest in testing right now, and how willing are they to accelerate the percentage of budget they devote to cookieless solutions?

If the current options on the table make one thing clear, it is that marketers cannot wait. With the stay of execution for cookies provided by Google, each individual brand has time to develop the solutions that will work for them. Digital advertising is not going anywhere, but those that opt for the passive path of least resistance are going to be left behind.

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