The Future of Display Ads without Third-party Cookies
Posted August 18, 2020
The Future of Display Ads without Third-party Cookies
Posted August 18, 2020
By Craig Weiss
News that Google plans to block third-party cookies in its Chrome browser, likely by sometime in 2022, sent B2B marketing and display advertising platforms scrambling for new ways to credibly track user behavior across the internet.
Third-party cookies have been the backbone of behavioral targeting, particularly for programmatic display advertising, for more than two decades now. Without persistent Advertising Without cookies data, B2B marketers will have to find new ways to deliver relevant content to potential buyers. And they know it’s going to be a real challenge.
Google’s not alone in what it depicts as its growing commitment to consumer privacy. Other giant platform publishers, such as Facebook, Apple and Amazon, are also moving to close off their ecosystems to third-party tracking – all while logging and monetizing consumers’ behavior while they are using their platforms, of course.
Please understand – we are here at Anteriad take privacy very seriously, and constantly work to ensure that we and our data partners comply with evolving privacy standards such as GDPR and CCPA. So I am not discounting the need for better consumer privacy protections. But I also know that all forms on online business, and specifically B2B marketing, are reliant on behavioral data, and it’s not healthy for that information to be controlled by only a few giant platforms.
In this post, I’ll look at the details and implications of how Google and other platform providers are driving the demise of the classic third-party cookies, as well as some of the technological alternatives that are under development. I’ll also share my thoughts on how all this will affect display advertising and other B2B marketing channels, and the ever-shifting balance between.
The problem of third-party cookies
Again, let me say that Google’s plan to phase out third-party cookies in Chrome is nothing new in the B2B marketing landscape. The Firefox and Safari browsers have been doing this for a while now. In fact, this piece at The Verge attributes Firefox’s stance on third-party tracking to a genuine zeal for privacy, while acknowledging that other players may have revenue in mind.
Google’s announcement is simply the tipping point in this evolution – but it’s an enormous one. Chrome commands about 70 percent of the global desktop browser market share; it owns about 60 percent of the global mobile browser market, given the worldwide dominance of Android. If Google were acting unilaterally, it’s announcement would be huge news. And Google is not acting alone.
Apple’s Safari has more than half the U.S. mobile market, and it doesn’t like third-party cookies, either. A generally sceptical piece at Explica runs through Apple’s branding of itself as a privacy champion, including a forthcoming “privacy report” that lets users know which sites Safari blocks from trying to track their behavior (hint: it’s pretty much all of them).
Many observers have been predicting massive disruption in programmatic display for quite a while now; this is just the nail in the coffin. Third-party cookies as we have known them are going away. What will replace them is the question.
The need for technical innovations in display advertising
Google – which as you may know owns a massive cross-domain display advertising marketplace – has announced that it’s developing a new technology labeled FLoC (Federated Learning of Cohorts) which will allow B2B marketers to target groups of prospects who share similar behaviors, while still protecting the discrete privacy of individuals. This piece at Ad Exchanger goes into some fine detail about sandboxes Google is currently running to model out the “post-cookie web,” as it labels it.
Other programmatic ad targeting providers have been working on similar solutions, well before Google’s announcement this January. These range from anonymization to turnkey authentication solutions, by which site visitors can easily elect to share data in exchange for access to high-value content. It’s effectively an iteration of the universal online ID, a concept that’s been circulating for a while now.
I’ve sat in on demos of some of these solutions. I’d describe them as promising, but there’s a ways to go before they will truly meet the needs of B2B marketers.
Some other observers are suggesting a return to pre-cookie basics. A piece at The National Law Review (remember, this is all due to, at least in some part, concerns over privacy issues) suggests that keyword targeting – which places display advertising based on the content of a Web page, as opposed to behavioral history of the user – may make a big comeback. Certainly, semantic technology is better than it used to be, but there’s a reason behavioral targeting became the industry standard. It works.
Clearly, the imminent demise of the third-party cookie is a call to innovation for display advertising platforms. They haven’t found a perfect solution yet – but need is the great driver of innovation. And there certainly is a need.
The ascension of first-party data
The bottom line? The demise of third-party cookies will result in the rise of first-party behavioral data across all channels of B2B marketing. It’s already a premium commodity in B2B marketing content syndication, and its value will only increase as access to third-party data becomes limited.
Ultimately, this could be a good thing. I can foresee that many publishers will invest more heavily in creating high-quality content that readers will be willing to opt-in for access. Of course, these publishers will have to clearly disclaim the terms by which they will use and possibly share this data, and give users a clear path to opt-out of the agreement – but that’s the general spirit of GDPR and other privacy regulations we operate under today.
As more and more publishers build high-quality audiences, we here at Anteriad and other data-driven marketing and demand generation platforms will build wider networks to compile this data. And Big Data AI technologies like our Relevance Engine will grow and improve to find purchase intent and other meaningful patterns in that data.
It’s the path we are already on.
But in the near-term, the end of third-party cookies will definitely impact B2B marketing, and the most dramatic consequences will be felt in programmatic display. Large-scale third-party solutions are going to have to adapt quickly or face extinction.
Someday soon, advertisers are going to serve a lot of ads to people who simply don’t care about them. For the often broad, high-funnel reach of B2B display advertising programs, you need a breadth of data to correlate to find that magic match. Content-based targeting simply can’t replace the knowledge that a user has viewed similar content five times in the last month, at multiple sites. That’s the patternistic data you need for effective display advertising retargeting, and it’s what new tech like “privacy clusters” is aiming to replicate.
But it will take a while.
Data aggregators will continue to do what we do – look for the best possible mix of data partners to provide a base for advanced analytics. As I said earlier, the guidelines for privacy are already there. Personally, I welcome the regulatory emphasis on privacy, and hope governing bodies get smarter with the sometimes nebulous rules they’ve passed in the last few years. New solutions like turn-key opt-in networks will definitely make it easier for consumers to manage their personal data with confidence. This, in turn, will encourage more publishers to develop high-value audiences that they can monetize in various channels.
But, that too, will take time.
Please understand, I don’t see a huge shift in spending to accompany this short-term (hopefully) decline in display advertising targeting efficiency. B2B marketers are going to keep spending on the channels they know to generate a healthy mix of engagement and leads at all finnel points. But both they and consumers are going to be less satisfied with the results. Which leads me to my final points.
The Privacy Paradigm
Online “privacy” is a paradigm: consumers exchange information about themselves for access to content and services. And when consumers are bombarded by irrelevant ads – often in obstructive formats to compensate for the fact that they really aren’t that interesting to the viewer – they may realize that sharing data is not the worst thing in the world.
I personally haven’t cleared a cookie in years; the only time I actively clear my history is when I get a new laptop. And I work from a home office. I consume a lot of content related to our industry, and the advertising stream that hits my desk is relevant. During the COVID-19 lockdown, I saw a tremendous number of ads for work-related items that could ship to home, and I bought a bunch of that stuff. Because the ads were relevant.
Relevancy makes display advertising – and really, all forms of marketing – not only less obtrusive, but actually desirable. A core belief of our team here at Anteriad is that B2B buyers are happy to be marketed to when they are ready to buy. I truly believe that focusing solely on issues of “privacy” will have the net effect of making ads more intrusive and, of course, less effective. And in time, you’ll see a shift back as CPMs and CPLs begin to drop.
These are always trade-offs when defining exactly what “privacy” means. That includes who’s actually holding your “private” data.
What does privacy really mean?
With the end of third-party cookies, you will have some of the largest companies in the world, under the guise of privacy, positioned to completely obliterate third-party and smaller players in the display advertising industry, and to a broader extent data-driven marketing in general.
If Google “altruistically” blocks all third-parties, guess who gets to take the whole ad spend? Google. (In all fairness, most observers suggest that Google’s public roadmapping of its plans is likely due to it not wanting to completely destroy the market.) Apple is doing the same on most of its devices, and Amazon is echoing the practices in its infrastructures.
Yes, there will be some additional privacy that results from these measures. But trusting massive corporations (Facebook is on the list, too) with your personal information has a pretty dicey history of its own. These monoliths may be taking out some bad actors by eliminating third-party cookies, but they’re also taking out some good-faith actors who are, candidly, more trustworthy than they are. How much do you trust a closed Facebook infrastructure where you can’t really see what they are up to? The world needs more openness – not more reliance on the largest corporations.
The new era of display advertising without cookies
Advocating for more privacy is great – long term, it can only build consumer confidence and make it easier for good-faith B2B marketers to develop trust relationships with prospects and customers. And the end of third-party cookies as we knew them is an inevitable step in that process. But it will create near-term pain for B2B marketing and programmatic display advertising. What’s needed now is a push for technological innovation, high-quality audience development, and more transparency from the big players who control the lion’s share of buyer data.