A Cookieless Future: Preparing for the End of Third-Party Cookies

As we all know, Google is dissolving cookies in its Crome browser by the end of 2023, and stepping in the shoes of other browsers like Safari and Firefox. If you are a marketer or an advertiser who relies on demand-side platform (DSP) to reach your target audience, you might be wondering how the cookie less future will affect your campaigns. This means that you will no longer be able to use cookies to track and target users across the web, which could impact your ad performance and measurement. Collecting and utilizing 1PD is the key component of a successful campaign for all digital marketers, as it allows for precise audience targeting, and helps you drive higher engagement and conversions from your ad campaign.

What Is a “Cookieless” Future?

As the name suggests, the cookieless future refers to a recent shift away from using third-party?cookies for various purposes.

While you probably already know what a cookie is, you may not know just how frequently they’re used — or the privacy concerns they’ve presented.

Though it’s perhaps a win for user privacy, it also presents a lot of uncertainty for site owners and marketers who use third-party cookies for tracking individual users and displaying relevant advertising. As a result, many people are scrambling for equally tasty alternatives as major players continue to transition to a cookieless future.

As user privacy and security become increasingly important on the web, Google, Firefox, and other big web players are starting to transition away from certain cookies altogether.

What Does “Cookieless” Mean?

Being “cookieless” means not using or accepting third-party cookies for tracking the user behavior and their interests on the website.

Since many of brands and advertiser rely on cookies for personalization and to use the audience for their campaigns to drive better performance, it is becoming hard to accept the cookieless future for the agencies, advertisers and publishers.

Why Cookieless Future?

There are many benefits to a cookieless future, especially when it comes to security and ad fraud.

However, these benefits can seem more like inconveniences to?site owners and marketers, especially with?97% of advertisers?using third-party data and cookies. As a result, many are questioning why a cookieless future is necessary in the first place.

Thankfully,?site owners, and marketers will still be able to personalize experiences and target users — just without the privacy and security concerns of cookies. To do this, they’ll have to take advantage of cookie alternatives, such as first-party data like permanent web IDs and tools like Google’s Privacy Sandbox (Topic API, FLOC)

Plus, a cookieless future may not be entirely cookieless after all. Since third-party cookies are the primary concern, many sites may still be able to continue using first-party cookies without worry.

But even with the privacy and security benefits, a cookieless future can still feel like a big hassle. Moreover, there are many more reasons to adopt cookie restrictions — some of which may even present cost savings.

Why Are Cookies Being Phased Out?

Privacy, security, Ad fraud concerns are the biggest reasons behind the cookie phase-out. As a result, most buyers and sellers think the phase-out will actually benefit?digital advertising?in the long term.

What are the targeting solutions available post cookies get dissolved?

Below are some of the targeting solutions that would be used once cookies are completely dissolved by Google and major companies are working to build these solutions. Largely, some of the initiative is still in its initial stages, but it has the potential to play a significant role in the future of digital advertising.?

FLOC (Federated Learning of Cohorts)

Federated Learning of Cohorts is a Google’s Privacy Sandbox Initiative which is a privacy-preserving alternative to 3P cookies that allows advertisers to show relevant ads without tracking individuals across the web. The best part of FLOC is it works by grouping people who have a similar interests together and group them into large cohorts. When someone visit a website, the website can see which cohort your browser belongs to (for example the cohort can be of any interests say sports, fashion, new etc.) while the individual browsing history could not be seen. This helps to protect your privacy while still allowing you to see relevant ads.?

Data Clean Room

Data clean rooms (Google Ads Data Hub (ADH), Facebook Advanced Analytics (FAA), and Amazon Marketing Cloud (AMC) are?places where walled gardens like Google, Facebook and Amazon?share aggregated rather than customer-level data with advertisers, while ensuring compliance with privacy laws like GDPR and CCPA. Data clean rooms anonymize, process, and store personal data safely. The main use of data clean rooms is to connect anonymous marketing and advertising data from various sources for attribution. Advertisers with first-party data will benefit the most from clean rooms as they offer a privacy compliant methodology for matching first-party data.

Unified ID 2.0 solutions

Unified ID 2.0 (UID2) is a privacy-focused, unencrypted alphanumeric identifier created from a user's email address or phone number. It is independent of third-party cookies and supports advertisers' need for running personalized ads that are targeted to specific consumers without compromising their privacy. It provides holistic targeting and measurement for an internet that is becoming more privacy conscious. The Trade Desk is well-positioned to leverage its Unified ID 2.0 solution, which is a privacy friendly alternative to third-party cookies.

Amazon is working on several privacy-focused solutions such as Unified ID 2.0, AWS Clean Room that will allow advertisers to reach their target audiences without compromising user privacy.

Alternative targeting options in the cookieless future with Amazon DSP:

Contextual targeting: This option allows advertisers to target ads based on the content or context of the web pages or apps where they appear. For example, an advertiser can target ads to appear on web pages or apps that are related to sports, travel, or fashion.

Audience network targeting: This option allows advertisers to target ads based on Amazon's first party data, such as shopping behavior, purchase history, and Prime membership. For example, an advertiser can target ads to customers who have bought or browsed certain products or categories on Amazon.

Customized targeting: This option allows advertisers to create their own custom audiences based on their own data sources, such as CRM data, email lists, or pixel data. For example, an advertiser can target ads to customers who have subscribed to their newsletter, filled out a form, or downloaded a white paper.

AWS Clean Rooms: AWS Clean Rooms helps customers and their partners more easily and securely collaborate and analyse their collective datasets—without sharing or copying one another’s underlying data.

Importance of Cookieless Future to DSPs?

DSPs rely on cookies to identify and segment users, bid on ad impressions, optimize campaigns, and attribute conversions. Without cookies, DSPs will have to find alternative ways to collect and process user data, such as using first party data, contextual targeting, or identity solutions.

Identity Solutions: Identity solutions are tools that help marketers unify and leverage customer data from various sources. They use identifiers like cookies, device IDs, or email addresses to create a complete profile of each customer's behavior, preferences, and interests. This enables marketers to personalize and optimize their messages, campaigns, and measurements across different channels and devices.

Some identity solutions include Customer Data Platforms (CDPs), Identity Graphs

? Customer Data Platforms (CDPs): These are software platforms that collect and unify customer data from various sources, such as websites, apps, email, social media, etc. CDPs create a single customer view that can be used for marketing purposes.?

? Identity Graphs: An identity graph foundation is a way of linking different identifiers and signals to the same person or household. For example, it can connect a cookie from a laptop, a device ID from a smartphone, and an email address from a subscription to the same individual. This allows marketers to target audiences more effectively across different devices and channels.?

Now, it will be interesting to see whether advertisers and publishers buy into Google’s rhetoric or sit back and see how it compares with other options before drawing any conclusions.