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March 4, 2024 | 7 min read

As we enter the second half of 2023, Google’s long-awaited Privacy Sandbox’s General Availability is live

Third-party cookies are still alive and well in Chrome, but the clock is ticking and the countdown has begun.

There’s just one year left before Google starts phasing out third-party cookies, which are mainly used for targeting and retargeting ads, and the advertising industry enters a new era. However, that’s still plenty of time for brands to take stock, reconsider partnerships and allocate resources to test solutions in a cookieless environment.

But what’s next? Do brands really know what to expect and, more importantly, are they ready for it?

What is Google’s Privacy Sandbox?

It aims to both “protect people's privacy online and give companies and developers tools to build thriving digital businesses.” By reducing cross-site and cross-app tracking, the Privacy Sandbox ensures the preservation of a free and open online environment, allowing unrestricted access to content and services for all users.

It also includes many APIs (application programming interfaces), with three crucial to the future of personalized advertising: Protected API (PAAPI), Topics API, and Attribution Reporting API. Of the three, Protected API is the most invaluable because it addresses key targeting and retargeting issues while preserving user privacy.

Privacy Sandbox General Availability

This is the first big step towards the cookieless future and means the APIs are available to all Chrome users by default and allows for scalable live-traffic testing to take place before the complete phasing out of third-party cookies.

During this General Availability period, Chrome will firstly ramp up the extent of the Privacy Sandbox-enabled traffic from 5% to 99% to allow large-scale testing, to later release two cookieless test modes to help brands and advertisers meaningfully evaluate Privacy Sandbox targeting and reporting technologies against third-party cookies, both quantitatively and qualitatively.

  • Mode A – ‘Opt-in’ testing, expected in Q4 2023, will allow AdTech vendors to set experiment labels for specific portions of Chrome traffic and allow advertising companies to coordinate with each other to conduct Protected Audience auctions without relying on third-party cookies. While the industry can test an increased volume of traffic in this mode, they will still be operating in a cookie-based environment as Chrome won’t permit the measurement of any cookieless solution performance during this stage.
  • Mode B – Planned for Q1 2024 aims to establish a performance baseline without third-party cookies by removing third-party cookies from 1% of Chrome users (implemented globally without user opt-in) and disabling Privacy Sandbox’s relevance and measurement APIs for a small fraction of traffic (all other APIs will remain functional).

How will retargeting work without third-party cookies?

It will be entirely possible to use first-party cookies to target and retarget the right audience with relevant ads. And the key lies in a privacy-centric approach where user data is not transmitted to any external server, but stored within the user's device, meaning that no unauthorized third-parties can access or analyze it. As a result, user privacy is upheld, and the risk of data breaches is significantly reduced.

In terms of advertising, adtech vendors will create user groups with similar characteristics based on this granular first-party advertising data, and for each campaign the recommendation engine will personalize ads based on selected groups. During the auction on the publisher’s website, participants will be able to bid for users from groups that are relevant for the brand they are representing.

However, the main challenges of cookieless retargeting are the creation of personalized ads for a group of users instead of an individual and the ability to precisely estimate a user’s value within the groups they are placed.

The answer to these challenges involves two independent sub-solutions, one of which would allow product personalization, and the other, proper bid evaluation without any reliance on third-party cookies. Both of them have been authored by RTB House and are now employed in their entirety in the PAAPI.

How will personalized ads work without third-party cookies?

In terms of personalization, targeted and retargeting ads impact the overall user experience and will therefore remain the main focus for marketers. That is why, the W3C working group identified the creation of a solution that allows personalized advertising with tailored content in the cookieless future as a critical need, and that that solution keeps the end-user experience as similar as possible.

Personalization is a cornerstone of successful digital marketing strategies, with users more likely to respond positively to content that resonates with their interests and needs. And our product-level retargeting solution, available in the PAAPI, allows marketers to deliver relevant and engaging content, fostering positive user experiences and driving higher conversion rates by presenting products that users viewed on a brand’s website and those that are popular among members of the same interest group.

But how does it work?

Adhering to strict browser privacy protocols, all user data, such as online actions, preferences, and viewed products is saved locally on their device, and then used to build a user profile reflecting their product interests and behavior. And since our algorithm directly connects to a brand’s website, we know which products are popular among all members of a specific interest group.

Subsequently, when the user visits the same website or other affiliated platforms, they can then be served personalized ads, featuring products the user has shown interest in previously, displayed as banner ads, pop-ups, or even native advertisements, that seamlessly blend into the user's browsing experience.

How will your advertising budget allocation work without third-party cookies?

Currently, behind-the-scenes algorithms find the right user at the right time to display an ad at an optimal price to distribute advertising budgets effectively. With third-party cookies, these algorithms can accurately estimate the parameter between the price paid for the impression and the likelihood of the user purchasing the product.

But, all that will change in the cookieless future, and the difference in approach to targeting users appears to limit the possibilities of an accurate valuation. The use of group impression valuations as opposed to individual ones could leave several inaccuracies and increase the ineffectiveness of advertising budgets.

Enter our outcome-based targeting solution, available in the PAAPI which aims to separate the mechanism of impression price valuation for a given user from the means of microtargeting prevention.

Thanks to our solution, when a user visits a brand’s website, instead of relying on cross-website tracking enabled by third-party cookies, PAAPI can save additional information in the user’s browser as part of the UserSignals. And as this data is stored on the user’s device it is not accessible to external companies.

This outcome-based solution unlocks a wide range of precise signals to be used for bidding which ensures advertisers can still make accurate data-driven decisions while respecting user privacy by focusing on evaluating bids based on user actions.

Summary

With the cookieless future just around the corner, brands cannot wait any longer to start adapting to the new, and inevitable reality. They should start thinking about what the new reality will mean for them as well as understanding what they can and cannot do in this new cookieless world.

A trusted business partner, like RTB House, who understands why the cookieless revolution was needed in the first place, and can help them address the new future where user’s privacy is at its heart, would definitely be a great help.

If you would like to learn more about this topic, contact RTB House.

Retargeting Deep Learning RTB House

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