Learn what Google phasing out third-party cookies means for your advertising campaigns – and what you can do to mitigate the impacts.
A mammoth change is coming to the online ad-industry this year, and it’s one that has somehow snuck under the radar for a lot of advertisers. In fact, it’s likely to be one of the biggest changes in the history of online advertising.
Web cookies no doubt play a huge role in your advertising strategy. They allow you to track user activity, gain detailed insights into things like the age, gender, occupation, and location of web users, and ultimately produce more personalised advertising experiences.
However, as useful as tracking cookies is, it’s not without its detractors. We’ve already seen legislation in 2011 that led to users having to opt-in to cookies on every web page they visit. Now, increasing privacy concerns mean the cookie may finally be about to crumble, as by the end of the year Google plans to eliminate third-party cookies for all Chrome users.
In their place, the tech giant will introduce new standards and tools designed to improve user privacy and security, while still enabling advertisers to continue to deliver relevant and targeted materials.
From a privacy perspective, this all sounds good in theory – if those tools can fulfil their promises, that is. But there’s no mistaking this marks a huge change for the online ad industry. And it’s one that few organisations are currently prepared for.
What does this mean for advertisers – and you?
In truth, this has been a long time coming. Google has previously delayed this change to the way it operates on two separate occasions, having met with complaints from ad-brokers and concerns about fair market standards. Both Mozilla and Apple have also previously placed limits on tracking cookies within their Firefox and Safari browsers.
Now, it looks like things are finally moving forward. Working alongside the UK’s Competition and Markets Authority, Google has taken an important first step in restricting the use of cookies for 1% of its Chrome users in preparation for a wider rollout.
This is hugely significant, especially when you consider that the Chrome browser accounts for 66% of the internet’s total traffic. With other companies almost certain to follow suit, there’s a good chance we’re looking at an entirely cookie-free future.
So, what will the impact be for the online ad industry?
Very real concerns currently surround the effectiveness of some alternative solutions for targeted advertising. A report by Criteo found that Topics, one of Google’s own alternatives, was five times less effective than using third-party cookies (although Google is keen to point out that Topics is a continuing work in progress and improvements have since been made).
If equivalent replacement tools aren’t found, the online advertising industry is likely to see a significant downturn in profitability. In fact, research from IAB found that publishers could lose up to $10 billion in ad revenue. And Google itself reports an estimated revenue decrease of up to 70% for those who aren’t able to find a comparable approach to gaining customer insights.
There are of course plenty of alternative ways to mine customer data, from identity solutions and data pools to digital fingerprinting and Google’s own Privacy Sandbox. Each of these can help publishers serve more relevant ads to users. But with so much choice and so many unknowns, it’s extremely difficult to pick the best option with any certainty.
In all likelihood, a combination of different solutions will yield the best results. And that combination may look different for each organisation depending on their advertising goals. This means vigorous testing and experimentation is required. And the clock is ticking.
Preparing for a cookie-free tomorrow
Ultimately, the shift away from web cookies will have a significant impact on online advertising techniques, strategies, and expenditure. By preparing for that change now, your organisation has a chance of minimising the disruption.
If you haven’t already, now is the right time to talk to your advertising agency about the solutions and approaches it plans to adopt to help mitigate the impacts of this change.
Ask how your supplier plans to adjust its processes, and what technologies and solutions they plan to introduce to fill the void. If you have the time, it may be worth exploring the pros and cons of those solutions yourself, so you can improve your own understanding and have a follow up conversation later down the line. Now would also be a great time to review any contracts with advertising partners, to make sure you get the same value for money regardless of the changes that take place.
By getting ahead of the game, you can make sure your advertising budget continues to deliver results as these changes take place – and gain an advantage over those who are still unaware of what lies ahead.
At The Smart Cube, we’re constantly keeping track of emerging category and market trends and developments, so our clients can stay ahead of the curve and take proactive steps to improve their performance. If you’d like to learn more about our insights, get in touch.