Are we finally at the beginning of the end? The drawn-out death of third-party cookies has been looming over since 2020 when Google first announced its plan to phase out support for them on Chrome. Now, Google has at last taken the first bite, eliminating cookies from 1% of Chrome traffic (just over 30M users) in early January.
The sky didn’t fall, but testing by Raptive tallied a 30% drop in CPMs (cost per mille) for the newly cookieless audiences after Google’s action. It’s too soon to predict the larger impact of the more significant reductions coming, but what’s clear is that publishers need a plan.
After all, cookies have been essential to monetizing ad inventory and creating relevant user experiences on their sites for years. These controversial bits of data have enabled publishers to remember user preferences, provide personalized experiences, and track user activity.
So how can video publishers thrive without them? Where will media owners find new, privacy-friendly paths to addressability for their advertisers? Read on for answers.
First, how we got here
Despite their current status as technology non grata, there’s no denying that cookies have played a meaningful role in the digital economy. From user authentication to maintaining shopping carts between visits, these tiny snippets of code make ecommerce possible.
In video advertising, they have enabled publishers and advertisers to deliver targeted ads based on browsing behavior, measure the effectiveness of video campaigns, and make video ads relevant to audiences.
But consumers are less keen. They worry about where their behavioral data will end up. They find cross-site ad tracking intrusive. And they generally see cookie tracking as a threat to their online privacy and security. Those concerns contributed to the emergence of privacy regulations such as Europe's General Data Protection Regulation and California Consumer Privacy Act, which in turn drove search engines to limit or curtail cookies, and here we are.
Navigating uncertainty to prepare for the cookieless future
Unanswered questions abound in this new landscape. How will CPMs and budgets be impacted? How do we define identity in a standardized way? And how do we adapt the programmatic process to an entirely new ad buying system? Publishers face many uncertainties as they try to plan future investments. However, it appears the majority are moving forward.
Digiday reported in late 2023 that 39% of publishers said building their video ads business will be a large focus for them in the first half of 2024 and that 69% of publishers were actively preparing for the death of the third-party cookie. Digiday’s research also revealed that most publishers are leaning into first-party data solutions as the path forward.
Targeting with first-party data
First-party data, which is collected directly from users who have consented to sharing their information with a publisher via website or app, is a publisher’s most valuable asset for both targeting ads and attracting advertisers.
Publishers use first-party insights to segment audiences, boost revenue and CTR, and spark sales conversations with premium advertisers.
In the cookieless era, publishers will need to get even more creative and strategic in how they collect data from their audiences, using polls and other interactive content solutions to pose relevant questions to their visitors and glean meaningful insights.
First party data will be essential to building personalized and privacy-compliant video advertising strategies that achieve both monetization and engagement goals. But there are other methods in the mix, too.
Contextual targeting
Contextual advertising is another sensible option for publishers looking for cookieless targeting solutions. At its most basic, it involves placing video ads based on the content of the page. So if you are reading an article about the best beaches in the Bahamas, you might see an enticing video ad promoting a travel credit card.
Because contextual advertising matches the ad to the content a user is consuming, it delivers a relevant user experience, which can help increase brand loyalty for the publisher as well as success for the advertiser. But sophisticated contextual targeting is easier said than done. Publishers need partners and AI-driven tools that can analyze vast amounts of data and diverse page variables such as language, text, page structure, link structure, and more to optimize contextual placements. In video, publishers that want to maximize dwell time must ensure every user sees in the player only relevant video recommendations that correspond to the content they’re reading.
This complex analysis requires capturing context, optimizing the yield of content shown in the player, and personalizing recommendations accordingly, making it a job best accomplished with deep learning algorithms. For that, publishers need partners with the right tools.
Using prebid.js enrichment module, publishers can augment requests with additional contextual data based on page signals (content category, content description, and keywords) before they are sent to an ad exchanges or demand-side platform (DSP). This allows publishers to give advertisers more information on the context in which their ads will be displayed, boosting CPMs without cookies while staying privacy-compliant.
Cookieless ID Solutions
Post-cookie adaptation is also leading publishers to explore cookieless ID solution providers and vendors that work with them. These solutions typically rely on deterministic and probabilistic matching to make connections among identifiers like email addresses, mobile device IDs, and offline data, creating a unified view of a user across devices and channels. The identifier can then be used to track and analyze the consumer's online activities and behavior without relying on third-party cookies.
ID solution providers employ methods like device or browser fingerprinting and IP address tracking that don’t require cookie trackers. EX.CO has integrated with all of the top cookieless ID solutions in our bid stack by default and continues to test them.
The Google Privacy Sandbox, explained
Another avenue available to publishers is Google’s Privacy Sandbox, a collection of API-based alternative solutions to third-party cookies. The Privacy Sandbox comprises nine total APIs designed for spam and fraud prevention, ad relevance, measurement and attribution, and cross-site privacy.
Rather than tracking individuals, the Protected Audience API (PAAPI) assembles browsing habits into cohorts that represent users with similar interests. A media owner can use the API to compile user impressions associated with a particular event, such as clicks, into a segment for targeted advertising. This approach allows publishers to offer valuable and relevant video ad placements to advertisers without tracking individuals per se.
Google’s approach appears viable, but both ad buyers and sellers will need to conduct thorough testing to evaluate how Google’s APIs actually perform for end-to-end campaigns.
Get started on your way to cookieless addressability
The end of third-party cookies has major implications for video ads and for the ways advertisers and publishers target, measure, and deliver video ad content. Prioritizing first-party data, testing innovative contextual targeting methods and ID solutions, and building the right partnerships will help publishers continue to get value from programmatic advertising and sustain their ad revenue streams.
Building a resilient video content and monetization strategy should start with some housekeeping:
- Assess your inventory to understand how many of your bid streams and ad calls are cookie-based
- Test out ID solutions and data partners, then compare methodologies and results
- Work with an experienced online video platform with an array of addressability capabilities you can try
EX.CO can help you maximize the value of your video ad inventory, drive bid requests higher, increase revenue, and future-proof your businesses for a digital world without cookies. In addition to working with the top identity providers in-market, EX.CO is also fully prepared for the death of third-party cookies as official Google-certified partners and active members of the Interactive Advertising Bureau (IAB).
Want to learn more about how to prepare for the cookieless future? Drop your details below.