As cookies wane, those who’ve done their homework will be in good shape

As an industry of publishers, advertisers and ad tech companies, we have been preparing for the end of the third-party cookie for a very long time. Few things have occupied our product road maps, influenced our annual planning cycles and gripped us with bouts of existential dread as much as the certitude of the cookie’s eventual demise.

How much brainpower has been expended to figure out an alternative way of reaching coveted audiences in the absence of those persistent little identifiers?

How much legislative effort has gone into creating privacy laws designed to mitigate the impact of these sneaky bits of code tucked into the recesses of our browsers that inform whoever might like to know that we are interested in buying a pair of shoes, a new house or some much-needed personal-grooming services?

How many marketing dollars have been spent trying to convince site visitors to register with us so that we could add another file to our authenticated user database in the hopes that it just might be enough to get us to the Holy Grail of a sustainable pool of hashed emails (HEMs) that could be matched to a hypothetically sustainable pool of advertiser HEMs?

How many product and editorial hours have been spent on rebuilding and revising site architectures to capitalize on the (fingers crossed, premium publishers!) triumphant return of contextual ad dollars?

The precise answers to those questions are as unknowable as a toddler’s day-to-day mealtime preference, but if we think back to the first impacts of cookie deprecation hitting in 2017 with the introduction of Intelligent Tracking Prevention in Safari, it’s safe to say that there has likely not been a single issue over the past decade occupying as much of our industry’s horsepower as sunsetting the third-party cookie.

So here we are — cookie deprecation is finally happening across the biggest browser in the industry in that last holdout of sweet, sweet audience targeting that has been propping up effective costs per mille (eCPMs) across good sites and bad for more than 15 years. And, while some fervent believers still think that Google may kick the can down the road one more time, most of us consider this unlikely and are happy to finally be testing the plans that we first started putting in place in the halcyon days of a pre-pandemic society.

Without a clear path forward, many of us prepared for the impending cookieless chaos by evaluating and implementing a wide variety of options, taking advantage of whatever we thought made us unique, and shoring up alternatives where we perceived weaknesses. And while it’s way too early to claim that the results are in and that all signs are pointing in one bright and shiny direction, we are seeing enough cookieless Chrome impressions coming through to observe which way the wind is blowing — at least for a little while.

With all the standard caveats about it being early days, not all solutions being available yet, the unique and one-sided nature of a publisher POV, blah, blah, blah, here is our very early take on what we are seeing and what our (mostly) honest friends are telling us after we pinky-swear not to delude each other with false hope.

• First-party audiences are indeed valuable in a cookieless environment. Early indications for publishers are pointing to double-digit percentage lifts in eCPM when we can provide deterministic matches. Even more encouraging for those who may lack a sufficient scale of authenticated users, we are seeing that the improvement also holds true for probabilistic audience matches. Seeing these early significant results for those who have labored to build loyal audiences and who have invested in the tech and infrastructure to support this strategy is the type of validation that can even make a CFO smile.
• Private marketplaces (PMPs) are more valuable for advertisers and premium publishers. We made a bet with ourselves that the coming inability to chase audiences everywhere from high-quality media properties to fly-by-night made for advertising sites was going to generate an intensification of PMP deals for premium publishers. The early read is that this bet was right on the money, as we are seeing significant increases in activations, rates, and transactions across a wide range of advertisers and categories.
• Clean rooms and other secure data sharing options are proving to be a great way to unlock genuine insights that translate into unique ways for advertisers, their agencies, and publishers to come together. Such data sharing allows all stakeholders to construct distinct bundles of attributes and interests that would have gone undiscovered in a world where cookies continued to prevail. Putting this into action can create high-performance inventory and strengthens relationships for publishers and clients.
• Notably absent in this discussion is the efficacy of Google Privacy Sandbox solutions. Unfortunately, there hasn’t been enough demand coming through these channels for us (or really anyone, according to a March 19 article in Digiday) to understand if it is going to perform as intended. We expect countless breathless articles in the upcoming weeks analyzing every nuance of the replacement options that Google is pushing forward to moderate the ecosystem’s ability to optimize impression targeting and value in their cookieless world. In the meantime, we wait.

While the third-party cookie is unlikely to leave us with a whimper, it’s not quite going out with a bang. Our glass-half-full POV is that those who have done their homework and who’ve put the pieces in place to negotiate the turmoil will be in good shape to take advantage of different strategies currently out there or coming soon. We actually appreciate that Privacy Sandbox has been on a slow roll because it has given some very viable solutions time to marinate and begin proving themselves.

As we look back, we can see that we all fell into using cookies because they worked pretty well, were a cheap way to find desired audiences, and because we didn’t know any better. They also worked in a way that created as many issues as they solved, ranging from impression fraud to privacy concerns to ad safety and more. Going forward, we are excited to see a variety of solutions delivering promising results, because we think that having multiple options to target, build and optimize will result in a healthier environment than the one we are exiting. At least for a while.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.