Ever since Chrome announced that it will phase out support for third-party cookies, adtech industry, as it supposed to, is scrambling to find alternatives. While it makes sense to see how we can power targeted ads without cookies, it is equally important to understand how cookieless advertising will affect other parts of advertising.
There are too many ‘what happens to X without third-party cookies’ questions and last week, Digiday tried to get answers for a few.
a. Frequency capping:
As you are aware, media buyers tend to show the same ad to a user for a limited number of times per day/week. And, frequency caps rely on the cross-domain user ID that’s available via third-party cookies.
Without 3P cookies, many media execs believe that the users will be targeted contextually and as there’s no way to do frequency capping yet, ad experience is going to be lousy. As Ari Paparo noted in AdExchanger, buyers have to use first-party data from publishers or IP address or some sort of help from the browser to figure out cap the frequency of ads.
“Cookies are a blunt instrument. Publishers have a love-hate relationship with cookies. It helps them monetize content, but they lose control of the audience if they aren’t sure who’s dropping them.”
– Michael Krauss, VP of product management at Sourcepoint.
Both measurement and attribution depend on third-party cookies. And, when cookies die, so does the ad attribution model we use today. But it’s not all gloom and doom. Chrome promises to make attribution work with its conversion measurement API. Worst case, we’ve to get back to last-click attribution for a while. Apparently, affiliate publishers and networks have a lot of work to do, specifically, in this case.
c. Federated Log-in Systems:
For publishers with SSOs or federated log-in systems that use third-party cookies, there’ll be a need to develop alternative methods. Because the current system requires third-party cookies to identify users and keep them logged-in. In other words, users will have to sign in several times. If your log-in/subscription platform depends on the first-party, then there’s no issue.
d. Analytics and Fraud:
This is expected. Audience analytics will show inflated unique users (as the repeated users will be considered new – without third-party cookie data) and other functions (cross-domain tracking) will become limited. But some analytics companies have started exploring alternative ways to mitigate the problem. Safari ITP gave them the nudge to get started.
Most importantly, fraud detection vendors that use third-party cookies to identify patterns and user behavior to filter and block bots are in trouble.
What Will Happen to Shared IDs?
Cookie syncing has always been inefficient. Match rates were low and platforms lose valuable user data whenever they sync cookie IDs. Many industry veterans cite that cookie syncing is what holds the open web programmatic from pulling advertisers from walled gardens.
As opposed to open web, walled gardens don’t have to sync cookies as they collect user data directly and wouldn’t sync its data with other platforms. After all, they are walled gardens.
Shared IDs or universal IDs are framed to bypass the syncing process. Instead of having multiple IDs for a user, an independent entity will create a single ID and share the same with everyone so that there’s no need for syncing. But as with any other technologies in adtech, shared IDs rely on third-party cookies to understand users and enable other partners to utilize them.
DigiTrust, The Trade Desk, ID5, and Advertising ID Consortium are some of the ID solutions available in the market. DigiTrust ID is already blocked in Mozilla’s Firefox browser and the same isn’t expected to work when Chrome rules out third-party cookies.
“Without third-party cookies, we are only left with per-domain identifiers using first-party cookies, and it becomes impossible for third parties to set or recognize any form of shared or universal ID across domains— for any purpose.”
– Jordan Mitchell, SVP, IAB Tech Lab.
Many industry executives interviewed by Digiday predict that the shared IDs would be useless. While it is a fact that the shared IDs aren’t created to replace cookies, some ID providers claim to work with/without third-party cookies.
Some collaborated with firms like Liveramp to develop a better ID that doesn’t rely on cookies alone. And, ID5’s shared ID gets stored in publisher’s first-party data and other vendors can access the same via ID5’s cookie matching table.
To put it another way, a publisher can create IDs, store it in its cookie, and share it with the desired vendors via a matching table.
“We have a publisher user ID that we standardize across the ecosystem. This ID lets ad tech vendors and advertisers identify individual users but under the control of the publisher.”
– Mathieu Roche, CEO of ID5.
Storing IDs on the first-party cookies are still considered as a bypassing mechanism and browsers can indeed come up with a solution to close the loophole. But as long as Chrome supports third-party cookies, the industry will adapt and use the IDs until the last ad impression.
CCPA So Far
Last week, Adweek reviewed the impact of CCPA on the adtech industry and as expected, the findings show utter confusion and chaos.
The IAB has released a framework for the publishers, but it is still not completely clear that how can the publishers deliver what the law is asking for. The problem is arising due to the vagueness in the wordings of the law. Also, It doesn’t specify the steps that should be taken to comply with it.
Upgrading the tech is yet another challenge for publishers. A lot of work and time are required for upgrading, integrating techs like header bidding wrappers and SDKs. Due to the widespread confusion and the novelty of the situation, things are taking more than ideally required time.
The opt-out rate is insignificant so far (0.3% of total traffic), but a 50% reduction of bidding activity has been observed whenever there is an opt-out signal. We cannot declare it as a sign of permanently reduced CPM in the future as this might be a precautionary measure being taken by the buy-side to avoid risk.
The Government’s emphasis on privacy has also heightened the expectations of the consumers. In a survey, it was found that 88% of the US adults are concerned about how their data is being used by the companies. Only 49% of businesses have a documented means of allowing customers to access and delete their information.
To an extent, the current situation is also working against the publishers. Since the law focusses a lot on the third-party data (which fuels the open web), more and more buyers are moving towards the walled gardens to make sure they are using first-party data instead. It has also been observed that the walled gardens are also placing a lot of friction in front of the user to reduce op-outs.
“It requires 17 clicks to opt-out of Google’s ad targeting under GDPR terms, according to the study, whereas the website of leading U.K. publisher The Daily Mail requires three.”
There has also been a rise in the number of fraudulent activities. Since the value of inventory falls down when there is an absence of consent strings, some bad players are creating fake strings to fool the system.
The transformation to CCPA compliance will take time due to the complexities and confusion. But ultimately the industry has to follow the rules. So, there’s no way out. Publishers should work proactively and it is important to stay updated about the issue as the industry is going through a huge transformation.
More Content ≠ More Revenue
In a counterintuitive approach to increase readership, publishers are producing less content. According to Digiday, publishers like Guardian, The Times of London and Le Monde increased the number of subscribers after reducing the number of articles they produced. And it worked.
The reason why this approach worked is due to increased dwell time. Before taking this approach, the publishers were focussed on the quantity of content produced. But more content doesn’t mean that the readers will spend more time on your website. In fact, the content that is not exclusive and in-depth underperforms with readers. Due to this fact, when the Guardian analyzed its website analytics, it found out that a large portion of its content was not being read by its visitors.
Therefore when the publishers started looking towards the quality instead of quantity, they were successful in keeping the users on the platform for a longer time. When a website has a higher dwell time then the search engines give it a higher priority which results in increased organic traffic. Longer content, with detailed coverage, is also preferred by the search engines.
As the quality of the content improves, the user finds the website worthy of subscribing. As a result, the Guardian reached 25 million monthly users from 23.4 million the previous year, Le Monde reached 9.1 million from 8.4 million, The Post and the Courier increased its subscriptions by 250% in two years.
Working with hundreds of publishers, we have seen businesses die due to low-quality content. In 2018, just with a single flick of an algorithm change, Facebook reduced the traffic of viral content publishers so much that many of them have shut their businesses now. The only survivors were the publishers with quality content. When your content has quality then you do not have to be over-reliant on others. Your direct visitors, newsletter subscribers will come to you. No matter which search engine is popular, it has to rank your content if it wants to be useful for the user.
You will serve more ads when you have more traffic, even the advertisers prefer websites where users spend a long time. After all, it is the attention of the users that differentiates a premium publisher from the others.
Moments that matter
‘Sequential liability is bullshit’: Publishers press ad tech firms to protect them from programmatic clawbacks – Digiday.
‘Tim Cook is more important than the EU’: Browser makers hold more power over the digital ad industry than regulators – Digiday.
A key web standards group will help decide what comes after the third-party cookie – Digiday.