Advertising Revolution: Embracing the Cookieless Era Head-on

Cookie-apocalypse in numbers

In the advertising world of the future, it’s likely that integration with the human mind will let ads instantly adapt to people’s pizza cravings at 3 AM, while advertisers will use potential customers’ biometric data, scan their DNA, and naturally delve into the depths of their subconscious to analyze their dreams.

However, as we’re getting closer to the end of 2023 and a farewell party for third-party cookies (those data tidbits that seemed to bring advertisers even an inch closer to the described scenario), the future of the digital marketing industry looks more like a doom of data diets and random targeting.

But we still believe that the cookieless advertising apocalypse is at least postponed, and we’ll show you why. First, let’s explore the prevailing mood within the digital advertising industry.

Source: Adobe study, Hubspot survey, StackAdapt research

These numbers suggest that businesses are somewhat ready to reimagine their customer recognition strategies and, even if with gritted teeth, adapt to the new cookieless advertising reality by turning to contextual targeting and other options. However, while some are rushing to implement changes, there are certainly those who have chosen to take a wait-and-see approach.

But why did advertisers have to surrender and let go of the cherished third party cookies anyway?

To unravel the answer and make it easier to embrace the gloomy cookieless future, we need to first delve into a rather gloomy cookie-filled past.

What triggered the cookies doomsday?

Based on Google’s recent blog post, 81% of consumers feel that the drawbacks of third-party and first-party data collection greatly outweigh the advantages. And this sentiment is understandable given that about 64% of Americans, as reported by Pew, have experienced at least one data security breach.

But if these figures don’t make it clear why the call for changes in data privacy and cookieless future has become so pressing — just wait until you hear the upcoming data-chaos tales.

A lesson from Google on how to sneak around with privacy settings

In 2012, Safari, known for its default blocking of third-party cookies, was regarded as a safe place for privacy-conscious users.

But that year, everything changed. A scandal unfolded as Google was discovered bypassing Safari’s privacy settings and tricking it into allowing cookie placement on users’ devices without their consent.

Google claimed their actions were accidental, mere glitches in the system. But eventually, the truth emerged, and Google, facing its sins, settled with the Federal Trade Commission (FTC) for $22.5 million.

A tutorial from Facebook on inviting guests to 87 million profiles

In 2018, it was revealed that Facebook unwittingly became the platform for the evil scheme of a political consulting firm, Cambridge Analytica, which quietly collected personal data from over 87 million unsuspecting Facebook users. Private photos, cringe-worthy messages to exes, embarrassing likes… But it gets even worse.

This stolen data was used to build a software program to create voter profiles, predict, and influence choices at the ballot box.

Of course, there were consequences — FTC fined Facebook $5 billion for privacy violations, but the scariest part is that copies of the data harvested for Cambridge Analytica can still be found online.

A major educational platform’s masterclass in cookie mishandling

In 2017, the Edmodo educational platform was widely used by teachers and students. But little did those 90 million registered users know that the service kept a secret — improper cookie handling and encryption. And one day, some shady characters took advantage of these weaknesses and accessed personally identifiable information. Obviously, the aftermath was a disaster. The compromise of millions of user accounts led to a loss of trust among teachers, students, and parents, and, despite being one of the oldest and most widely used online learning platforms, Edmodo couldn’t recover from the incident and shut down.

These and countless similar heart-wrenching stories have prompted Google to announce its plan to disable cookies for 1% of Chrome users beginning in early 2024. Why only one percent? Well, this move is meant to help developers run real-world experiments. Then, in the latter part of 2024, after this testing phase, third-party cookies will be blocked for all Chrome users, and we will finally immerse ourselves in a cookieless world.

Impact of cookieless future on digital advertising

So, here is where our journey into the not-so-distant cookieless advertising future begins.

The concept of “third-party data” has become so obsolete that even advertisers have forgotten about it. At first, of course, many businesses found themselves in a state of confusion, unsure of how to navigate the evolving digital landscape of cookieless targeting and cookieless programmatic advertising. However, the most adaptable and resilient players in the advertising industry managed to not just survive but thrive. These are the companies that, as predicted by McKinsey, have shifted their focus toward the three most viable strategies:

• Getting first-party data for cookieless tracking is like hunting for treasure now. Companies are making use of all possible consumer touchpoints, paying careful attention to and securely storing information about every curious customer who lands on their website. They meticulously track every interaction, from perusing the product catalog to engaging with content, push notifications, or customer service. Every inquiry and click is thoughtfully recorded and then analyzed. Companies normally turn to Customer Data Platforms (CDPs) when it comes to gathering and handling such first-party data. Meanwhile, Consent Management Platforms (CMPs) come into play when they need to collect and process users’ personal information for purposes like marketing, analytics, behavioral advertising, and tailoring content to individual preferences.
• Forming partnerships gained absolute power because, in order to exchange data and squeeze the most out of the information that users willingly share, forging alliances in the cookieless advertising world is no longer just a good idea — it’s a necessity. Certainly, these partnerships have matured beyond simple handshake agreements and are now facilitated by powerful Data Clean Rooms.
• Turning to contextual targeting is more popular than ever, since its beauty lies in the fact that it boosts ad performance and media revenue without relying on personal data. It is all about showing ads that fit the subject and context of the content being consumed, rather than targeting based on the person viewing it. While you might consider contextual targeting old-school, the advanced technology behind future solutions, such as natural language processing and image recognition, is smart enough to make contextual targeting perfectly scalable and cost-effective for advertisers.

What are the surefire alternatives for targeting audiences in the cookieless world?

Oxagile is keeping a keen eye on the changing advertising scene to help advertisers thrive in the future cookieless world. Our expert, AdTech & Big Data Marketing Manager Marina Leontieva, fresh from the Programmatic I/O conference, is about to unveil the insider tips and lifehacks on the techniques that will make advertisers really look like they came from the future.

Expert perspective

“Angelina Eng, the Vice President of Measurement, Addressability & Data at IAB, delivered an insightful talk that closely aligned with our perspective on cookieless advertising, and underscored the significance of classifying audiences into 3 categories and employing appropriate strategies, tailored to each category specifically.

1. For Unlinked Audiences (advertiser/publisher data not connected), think about making the most of the data Retail Media Networks collect directly from their users to expand your audience targeting beyond their platforms. Try to create ads that are seamlessly integrated with the publisher’s website, matching its style and even adding interactive elements like search features to improve the user’s experience. Additionally, consider utilizing first-party cookies and user-provided non-personal information, combined with contextual clues or cohorts, to create finely tuned target groups and look-alike models.
2. When dealing with Browser/OS Linked Audiences (no third-party tracking), AI truly works wonders. You can make AI-powered keyword insights a regular part of your strategy and fill in any missing data points in your datasets with AI algorithms, making your information more thorough and accurate. Plus, you can use AI for cohort analysis, which allows you to group your audience based on the data you have, enabling more focused marketing efforts. And, if you want to take it up a little, explore deep learning models, which are capable of generating synthetic data to fill in gaps while keeping your data secure and intact.
3. And if you’re working with Linked 1:1 Audiences (advertiser/publisher data connected), Data Clean Rooms are your ticket to serious benefits. These tools will let you “activate” first-party data from platforms, making it accessible to third parties all without the need for direct user identification. Plus, another particularly compelling thing you can do with Data Clean Rooms is to dig into aggregated data and get a deeper understanding of unique behavioral trends that define specific user audiences.”

Navigating cookieless world with data superpowers

Thankfully, in the world of cookieless advertising, nobody will be left adrift like a piece of cookie in a cup of milk. We’ve got data collection and management superheroes here to rescue advertisers and help them enjoy the cookieless era.

Customer Data Platform

Customer Data Platform (CDP) is a true digital detective, gathering information from various sources — behaviors, transactions, and demographics — to create a unified customer or a “perfect customer” profile.

However, CDP goes beyond simply understanding your customers. It fosters collaboration among different departments, ensuring everyone has a unified view of the customer. It enforces consistency in messaging, allowing businesses to maintain a synchronized approach to customer engagement even in a cookieless targeting environment.

And the most incredible power of CDP is, no doubt, personalization. It enables businesses to pinpoint their targets with precision, delivering tailor-made experiences that enhance customer retention and boost revenue.

Consent Management Platform

Consent Management Platform (CMP) is like the superhero of data privacy, quietly protecting websites from financial penalties and bad reputation moments, all while keeping things legal.

This digital defender is perfect to:

• Ensure users’ privacy and consent are respected when the website gathers and utilizes first-party data for marketing, analytics, behavioral advertising, content customization, and more.
• Engage in behavioral profiling to make automated decisions, tailoring content to individual preferences.
• Handle international data transfers, ensuring data security and compliance, even across borders.
• Safeguard sensitive information like ethnicity, religious beliefs, biometric data, and political opinions, ensuring the highest level of protection.

Unified Identity

The Unified ID superhero is formed from a user’s email address or phone number and is on a mission to empower advertisers to deliver personalized, targeted ads to consumers while safeguarding their privacy.

Unified ID, in its updated form, embodies the principles of Project Rearc by the Interactive Advertising Bureau (IAB) and enables cookieless tracking to let advertisers and publishers reach users without relying on invasive third-party data.

Data Clean Room

Data Clean Room is on a non-stop guard of user privacy in the cookieless future: it provides advertisers with aggregated and anonymized user information, keeping personal details safe, while offering non-personally identifiable information (non-PII) for targeted advertising and audience measurement.

Data Clean Room comes to the rescue for:

• Ensuring compliance with privacy regulations such as GDPR, enabling businesses to understand users while respecting their privacy.
• Offering a glimpse into trends among groups of users, demographics, and industry segments.
• User segmentation, letting advertisers create customized audience groups for more effective user targeting.
• Analyzing aggregated data, including first-party data, allowing businesses to gain a deeper understanding of user behavior and activity.
• Guaranteeing that user data remains safe, offering a secure location to access and share aggregated user data.

How to smoothly enter this brave new world without cookies?

Expert perspective

“All platforms and tools, such as customer data platforms and consent management platforms, which can not only make a cookieless future bearable but also quite profitable, cover all the essential components for extracting maximum value from consumer data: from data collection and organization to its cleansing and integration.

However, extensive expertise in big data and a deep understanding of AI and ML algorithms allow us to highlight that, despite their apparent simplicity on the surface, there are numerous pitfalls and various scenarios where one tool may excel while another falls short. Therefore, there is no one-size-fits-all cookieless targeting solution at the moment, and the right working mechanism can only be implemented through a thorough examination of your specific goals and customers.

At the same time, there are several tips you can try to smoothen your transition:

• Shift your focus to unfamiliar audiences and reduce your reliance on third-party data.
• Use machine learning for contextual advertising that builds a tight bond between the advert and the placement, making it relevant for the user without relying on cookies.
• Embrace a Test and Learn mentality, foster a culture of experimentation and mindfulness.
• Adopt a holistic data approach and implement a comprehensive strategy that encompasses both known and unknown audience data.
• Equip your organization to adapt to the ever-changing cookieless advertising landscape.”