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Preparing for the demise of the third-party cookie – identity and the future of addressability

The third-party cookie has been on borrowed time for a while, but now the end is finally in sight. Sometime between now and January, Google will start blocking third-party cookies from Chrome, following the lead of Safari (in 2017) and Firefox (in 2019). And because Chrome accounts for about 64% of browsers worldwide, the impact will be huge.

The Drum’s Digital Transformation Festival, in partnership with MediaMath, brought together a panel of experts to discuss what the move will mean for advertisers, publishers and the open web in general.

The key takeaways from the session were:

  • Attention has focused on the effect on targeting, but there are equally important ramifications for measurement, attribution, frequency capping and optimisation;

  • The disappearance of third-party cookies will pose a significant threat to independent publishers;

  • There are solutions out there for advertisers, but achieving scale remains a major issue;

  • Outside the big walled gardens, collaboration and partnerships will be key.

Tim Willcox, MD Amnet Programmatic Experts for Dentsu Aegis Network raised the issue of how the end of the third-party cookie will effect the level of detail to which advertisers and agencies can measure the impact of their programmatic campaigns.

“Econometric modelling is something that’s used in TV a lot. Will that become more prominent?” he asked.

Another panelist, ID5 Chief Strategy Officer Joanna Burton, warned of the threat posed to the open web by Google’s move.

“I worry whether those sites that people don’t want to share their email address with will be able to compete effectively if they lose access to the tools to do frequency capping, measurement and targeting that currently rely on third party cookies,” she said.

According to MediaMath’s General Manager APAC, EMEA, Viktor Zawadzki, the most important thing at the moment is to avoid too many restrictions being placed on the ability to monetise media, particularly by independent publishers.

“It’s important to make sure we have a free and strong press,” he said. “What will happen if smaller properties cannot monetise properly anymore? What happens to journalism?”

Burton picked up on this point. She agreed that there were compelling reasons to get rid of the third-party cookie, but she also noted that the change comes at a time when publishers are already struggling. The pandemic has created a greater appetite for news, but also forced advertisers to cut their budgets. This means more traffic for publishers, and therefore more cost, but lower revenues.

“At the same time, they’ve lost the ability to monetise traffic effectively in the other browsers – Safari and Firefox – where third party cookies have been blocked,” she said. “They’re also dealing with regulations like GDPR that are limiting the use of third party cookies. We are looking at a really difficult time for publishers. Already, in Safari and Firefox, publishers are seeing less than 50% of the money they could make if they were able to identify users through third party cookies or some alternate way.”

The problem of scale

An over-arching solution has yet to appear, although it is clear this will involve a combination of contextual advertising, targeting by cohorts, ID solutions, authenticated data and inferred data. Willcox argued that reliance on first-party data would improve the relevance of advertising, as well as predicting the emergence of small ecosystems where data could be leveraged across a number of sites.

The problem will lie in achieving the sort of scale marketers have been used to for their campaigns.

“Stitching first-party data silos together is the big challenge for the future,” Zawadzki said. “We need an open solution for identity, to make sure that we have scale.”

The session ended with some advice for people wondering how to prepare for life after the third-party cookie. Firstly, if you haven’t already started, do so now. Look at ways to collect first-party data. For publishers, that might mean registration or a log-in wall. Advertisers can offer discounts and other incentives.

Secondly, start testing in Safari and Firefox to see how your campaigns perform, or your traffic performs, in a world without third-party cookies.

Thirdly, look for partners such as agencies and other partners to work with on a first-party basis.

And finally, start experimenting with ID solution providers, seeing how to work with them and the scale you can achieve.

“For now it comes down to evaluation,” Zawadzki said. “Building a checklist to review what the tech stack looks like in terms of being ready for the future of identity.”

Tim Willcox, MD Amnet Programmatic Experts, Dentsu Aegis Network, Joanna Burton, chief strategy officer, ID5 and Viktor Zawadzki, General Manager APAC, EMEA, MediaMath were talking to John McCarthy, senior reporter, The Drum at The Drum's Digital Transformation Festival.

You can watch the full session here.

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