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Cookies and the Future: Our Thoughts on Preparation

By Eliot Dahood

Dec 1, 2020

Note: This article is the second of a two-part series. Click here to read the first article.

Introduction

Today, addressable identity targeting is central to the activities of most marketers. At the same time, a recent eMarketer report, Identity 2020, noted a disconnect in the industry.  Fewer than one-third of Industry professionals surveyed last May by the Winterberry Group were "actively testing and investing in new solutions."

 

Here are my theories on why this industry disconnect exists and how smart marketers and publishers should position their organizations in the coming year.

The Disappearing Cookies: Not "If" But "When"

As I talk with industry participants, there is an undercurrent in our conversations—many seem to doubt whether Google will deprecate the cookie.  Our analysis suggests the cookie will disappear. The appropriate question is not "if" but "when."

As detailed in our earlier article, cookies raised privacy concerns in the earliest days of the Internet. Now, the convergence of multiple factors suggests that the U.S. will move toward a greater emphasis on privacy, accompanied by the third-party cookie's demise.  These include legislation such as CCPA 2.0 and potentially a national privacy law, as well as Chrome's loss of U.S. desktop market share, over the past year, due to the privacy emphasis of competing browsers. It's also likely Google will view privacy-oriented changes to Chrome as working to prevent an antitrust action that would force it to divest the browser.

 

How Flexible is Google's Timetable?

 

Google initially announced it would sunset the third-party cookie by the end of 2021. Since then, several Google officials have said this is not a hard and fast date, suggesting the company may delay this deprecation until a straightforward replacement for cookies is in-place.

The Google Privacy Sandbox and the IAB's Project Rearc are seeking broad industry support for new solutions. However, whether these efforts succeed or not, will ultimately have little impact on the longevity of the third-party cookie.

Adweek has noted that identity is one of the most "competitive spaces in digital advertising." Industry giants such as The Trade Desk and LiveRamp are moving forward with solutions to replace the third-party cookie. And, BritePool demonstrated the success of its cookie-replacement technology in a live programmatic ad campaign.

As 2021 draws to a close, there's little doubt that Google will see two things: First, several battle-tested solutions will be poised to replace the third-party cookie. Second, privacy concerns will demonstrate more significant momentum. Hence, the real question is whether Google will sunset the cookie at the end of 2021 or a few months later, not whether this deprecation will occur.

The Cookie Dilemma: The Smart Approach for Marketers and Publishers

 

If you are a marketer or a publisher, the third-party cookie's demise will have a significant impact on your business. It may happen at the end of 2021 or a few months later, but it will happen. For us at BritePool, the best course of action is to be ready.

In early 2021, there are two easy ways to prepare:

First, determine the impact the demise of the third-party cookie will have on your business. For publishers, the numbers may be frightening. Google estimates publishers will lose, on average, 52% of current revenues.

For marketers, a relevant question may be: What portion of your new business, and your retention of customers, relies on targeting via the programmatic web?

Second, implementing solutions to replace third-party cookies will be far more comfortable if undertaken thoughtfully, when time is not a constraint. BritePool is actively integrating new publishing partners and running test campaigns for advertisers. We anticipate most publishers will work with multiple solution providers. For marketers, our focus is two-fold: To deliver real value in 2021 campaigns while the cookie still exists and a higher amount once the cookie is gone.

 

In our experience, firms rarely prosper when they are required to scramble to revise critical aspects of their business. A mad dash inevitably wastes resources and loses revenues. For marketers and publishers, the approaching sunset of the third-party cookies is foreseeable. Now is the time to dedicate some resources to position your firm to thrive in 2022, as new solutions are required.

Eliot Dahood is Chief Technology Officer of BritePool.

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