No more third party cookies! What’s in store for the digital advertising ecosystem?
This January, Google officially confirmed it would be blocking third-party cookies from its Chrome browser by 2022.
What we see of digital advertising today has all grown from third party cookies. It is information that is sent from the website and stored in the user’s browser. These cookies are primarily used for targeted advertising.
Advertisers are able to display their ads to the most relevant audience through third party cookies. Web pages drop these cookies into the browser, which helps them collect information regarding the user’s browsing behaviour. This is sent back to publisher’s advertising partners.
Projjol Banerjea, Founder and CPO, Zeotap, explains, “Once different companies are able to track a particular user, they are then able to add different attributes to this profile. Based on the attributes collected on these profiles and the syncing of the cookies, they can find out who the person using the id is. Based on those attributes, they can optimise advertising.”
This is the reason behind why the bag you procrastinated over to buy, keeps popping up on different platforms in the form of an ad.
The industry in disruption
Since most of the automated trading is based on cookie-based audio signals and the fact that Google has 66 per cent share of the browser market, blocking third party cookies has caused a stir in the market.
User privacy has become the most important concern, especially with Europe passing new privacy regulations. Cookies have been an artefact of the digital advertising world and haven’t changed much since the mid 90s. However, with the introduction of GDPR and the mandate against user consent to collect data, cookies have their advantages.
Banerjea lists them as:
- The cookies sync mechanism enables different companies to interact with one another.
- Cookies identify devices and not people. Ids of one company cannot be read by any other platform. Cookies can only be read by people who have read them. Cookies can only be read or shared via cookie sync.
Banerjea further adds, “Cookies in some way democratise the web. The mechanism is consistent across browsers. Hence, the power of the ecosystem doesn’t get centralised to one single player. This has, however, happened with the mobile market, since the mobile ids are generated by Apple and Google.
Cookies have their disadvantages, to which Banerjea agrees. If manipulated, cookies give information about a user across various platforms, when misused there is a potential that the user is tracked with his or her knowledge.
It has created uncertainty in the market for both investors and players themselves. Start-ups will be the ones scratching their heads the most. However, the bigger players might not take the wave directly. Also, players willing to pivot towards a world without third party cookies will survive this change in the market.
No cookies! What’s next?
There have been talks about a shift in the market to syncing of mobile and web ids. This will make identification really easy and it is said to have privacy setting for the user himself.
Google is in the process of creating the “Privacy Sandbox”, which is still in a very nascent stage. Google is open for collaboration on this project and once the final product is achieved, this interface will be available for all browsers. Players in the market are also planning to create universal ids to replace cookies altogether. There have been some talks about even mobile ids to go down the way third party cookies have gone. These universal ids might replace even mobile ids.
There has been a constant effort to find a universal way to collect user data, while at the same time letting the user be in charge of his or her privacy. With Google set to replace third party cookies by 2022, only time will tell where the digital advertising market is headed. Are we going to see the death of ad-funded publishers? There is a possibility that this might change the targeted advertising ecosystem altogether and even give birth to something completely new in the digital advertising market.