Future without cookies

T he use of third-party cookies for targeted online marketing will soon be phased out. While Google Chrome will continue to support third-party cookies until mid-2024, other browsers such as Safari and Firefox have long since blocked them. With the introduction of the EU's ePrivacy Regulation, their use will now also be further restricted by law. In view of the imminent end of third-party cookies, advertisers and agencies are looking for alternative methods. Two prominent concepts are Universal ID and Topics from Google. Universal ID uses email addresses that are linked to first-party cookie data, while Topics identifies different topics in the Chrome browser and thus enables interest-based advertising.

The alternatives at a glance:

First-party data and server-side tracking: The growing relevance of first-party data as a tool for advertising campaigns is undeniable. Users who give their consent allow advertisers to use their data. Server-side tracking, where customer data is stored on a company's own servers, enables longer cookie lifetimes and greater control over data processing. This allows for more precise targeting and data-driven marketing strategies.

Topics API by Google: As part of Google's Privacy Sandbox initiative, the "Topics API" was developed to provide an alternative to traditional cookie-based tracking. This technology aims to enable interest-based targeting by analyzing the user's visit history and identifying topics that reflect their interests. These topics are then used to target advertising. In contrast to the individual user profiles created by third-party cookies, the Topics API is based on a less invasive method that uses topic categories to place relevant advertising. This offers a compromise between user privacy and effective targeting.

Universal IDs and ID systems: These approaches use uniform identifiers such as email addresses to track users across different platforms. Users register once with an ID provider and give their consent for advertising purposes. Such systems enable tracking across multiple platforms, but require a high level of user acceptance and reach. However, as users generally do not want to be tracked, it is questionable whether this is a long-term alternative method. Google in particular does not see this as a valid alternative and has therefore developed its Topics approach.

OneID is a new Swiss ID solution from OneLog that enables advertisers to target Swiss users efficiently and without overlaps via programmatic platforms. As an independent service of the OneLog login solution, OneID offers frequency capping and is also open to external publishers. Integration into the IAB Europe Transparency and Consent Framework ensures user control and transparency in data usage, laying the foundation for a future-proof digital advertising infrastructure.

Unified ID 2.0 from The Trade Desk is an initiative to create a new, collaborative identification solution that strengthens data privacy while providing effective advertising opportunities. It utilizes first-party data, with users giving direct consent for data usage, giving them more control over their information. This open and interoperable approach allows different parties in the advertising ecosystem to access a common identification method that is not controlled by a single provider. The goal of Unified ID 2.0 is to provide a transparent and consensus-based alternative to traditional cookie-based methods that is beneficial to all parties involved in the advertising process.

Contextual advertising has been around for a long time, but is now experiencing a renaissance. This is partly due to the end of third-party cookies, but also because the technology is much more advanced than it was 10 years ago. It is an approach that uses the content of a website or medium to place relevant advertising. Instead of relying on user data, this method is based on the context in which the user is currently located. For example, advertising for camping equipment or hiking boots could be displayed on a website about outdoor activities. This method respects the user's privacy as no personal data needs to be collected or analyzed. Instead, it is based on the assumption that the content the user consumes allows conclusions to be drawn about their interests and potential purchase intentions. Contextual advertising is particularly suitable for brands that operate in specific niches or industries and want to ensure that their advertising is highly relevant in a specific thematic environment.

Artificial intelligence and predictive audience models: AI-supported approaches based on probabilities enable the creation of models that function in a similar way to target groups. Strong algorithms based on extensive data pools can predict user behavior and thus enable more effective advertising campaigns. Although these methods require a large pool of data, they offer the potential for extremely precise targeting.

With the elimination of cookies and the difficulty of recognizing users, the performance of campaigns is impaired. This could lead to an increase in the cost of effective digital advertising. On the other hand, third-party data cost a premium, which is now no longer applicable. In addition, the smaller the target group, the higher the auction price had to be paid in order to actually reach it. In a cookie-less world, CPM prices should therefore tend to fall and (partially) make up for the performance losses. Whether this leads to declining performance will depend very much on the individual case.

Tips for advertising clients

Advertisers should focus on first-party data and possibly implement server-side tracking to maintain control over their data. They should also specialize in data handling and be ready to adapt to technological developments. Above all, they should keep an eye on and test the many alternative options. Advertisers should require their agencies to familiarize themselves with the latest technologies and methods for cookie-less targeting and develop strategies accordingly. It is important that agencies are able to allay fears about reach and offer effective alternatives.

Online advertising is facing a significant change. It is crucial that advertisers and agencies alike adapt and develop innovative solutions to succeed in a cookie-free world. The future belongs to those who embrace technological advancements and focus on the use and analysis of first-party data and other non-cookie-based methods.

*Daniel Hünebeck is a digital expert, works for the SWA, Digital Ad Trust Switzerland and is a lecturer at the FH Grisons.

Tips for advertising clients

1

Investment in first-party data:

Collect and use data that comes directly from your customers. This can be done through newsletter registrations, customer surveys or loyalty programs.

2

Testing new ID solutions:

Test alternative identification solutions such as Unified ID 2.0 or Topics from Google.

3

Increased use of contextual advertising:

Focus on contextual advertising based on the content of the website where the ads are displayed.

4

Technological partnerships:

Be open to new technology providers that offer innovative solutions for the cookie-less era and take a look at their solutions.

5

Constant market observation:

Stay informed about developments and trends in digital marketing so that you can react quickly to changes.

"It's important that agencies are able to allay fears about outreach and offer effective alternatives."