The Cookieless Future Is Inching Closer — Here’s What That Means for Advertisers

Back to Blog - by Otniel Calderon

Digital advertisers won’t have to say goodbye to third-party cookies today or tomorrow, but that time will eventually come. The writing has been on the wall since early 2020, when Google first announced its intentions to phase out third-party trackers on Chrome browsers. After several delays, the company reiterated its commitment to the move this past spring, which is now set to take place in the latter half of 2023.

While Google’s phaseout of third-party cookies has been positioned as an attempt to meet growing consumer privacy concerns, its plans have created new issues for regulators, competitors, the digital advertising industry, and everyone else with a stake in the web’s evolution. The search giant has explicitly stated that it wouldn’t be “building alternate identifiers to track” individual web browsers, but it has proposed a new ad targeting standard that it claims will lead to similar results. Dubbed the “Federated Learning of Cohorts” (FLoC), this technology uses an algorithm to group browsers together based on overlapping browsing histories — providing an ostensibly more private consumer experience while still allowing for targeted ad delivery.

The only problem with FLoC? Virtually no one else is on board with it. Detractors say the technology could introduce a host of new problems that are just as pernicious as those it’s intended to solve. Regulators in the U.S. and Europe will also have questions, as will privacy-conscious Chrome users who realize they’re unwittingly involved in FLoC testing.

Regardless of whether Google’s proposal ultimately gains mass adoption or fizzles out, the use of third-party cookies for advertising is nearing its end — most browsers already block them. But given Chrome’s sizable lead in terms of overall browser market share, Google’s decision to further postpone the inevitable is significant for advertisers, who now have a little more time to prepare for a cookieless future.

Cookieless Advertising Is Already Possible

There are numerous cookieless alternatives for ad targeting — and cookieless identity and measurement solutions — immediately accessible to advertisers. They include inherently cookieless channels like Connected TV/OTT, streaming audio and podcasts, and content-based and contextual targeting solutions that let advertisers reach audiences engaging with highly relevant or intent-driven content.

We’ll likely see an uptick in testing and adoption of these alternatives in the coming months, along with a continued shift in the way advertisers use performance marketing. Historically viewed as an approach for driving hard sales, a growing number of brands across all categories are now deploying performance marketing tactics to build their pool of valuable first-party data. These brands incentivize audiences (usually in the top half of the marketing funnel) to trade their contact information in exchange for newsletter subscriptions, content downloads, exclusive promotions, or other offerings. This approach offers opportunities to build credibility and trust with prospects well before purchasing decisions.

As advertisers continue to search for ways to fill the void soon to be created by Google’s phaseout of third-party cookies, here are three principles they should keep in mind:

The best is yet to come for data-driven advertising.

Brands are sitting atop mountains of customer data, and most have yet to tap into it. As digital transformation accelerates across sectors, more companies will have the capabilities needed to do so, which means a new era of advertising is just around the corner. Third-party cookies have never been the proverbial “golden ticket” to consumer hearts and wallets, but it’s out there — advertisers just need to find it.

Personalization is still possible (and critical).

Consumers still want personalized experiences, and the brands that deliver them consistently through the responsible use of data will be rewarded with increased loyalty and engagement. As advertisers gradually turn their focus — and budgets — to inherently cookieless environments like OTT and streaming audio, many will realize that these largely untapped channels present incredible opportunities to reach target audiences in a highly personalized environment. The sooner advertisers incorporate these channels into their campaigns, the sooner they can leave cookies behind for good.

Metrics and KPIs will continue to evolve.

Many advertisers make the mistake of measuring campaign performance against indicators that don’t align with their chosen tactics or predefined objectives. This can lead to optimizations that aren’t improvements, reporting that’s not insightful, and brand messaging that’s confusing rather than compelling.

As technology enables new ways of reaching consumers, advertisers will have to adjust the strategies they use to gauge the effectiveness of their efforts. Investing in flexible analytics and measurement solutions can help, but a focus on workforce development should also be fruitful. Of course, optimal results are never guaranteed. But if you don’t have the tools and expertise needed to properly define success, they’ll be that much harder to achieve

At Digilant, we’re committed to keeping our clients informed on how best to prepare for the cookieless future. Stay up to date with all the latest changes and announcements on our future of third-party cookies content hub here.

Want to learn more about how you can navigate a cookieless future and future-proof your media investments? Contact us today.

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