Though there are many alternate solutions in development, the two solutions gaining the most traction are Google’s Privacy Sandbox and the Unified ID 2.0. 

Now that cookies won’t sunset until 2023, advertising professionals have time to experiment with these new pathways.

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It’s time to experiment with new forms of data

The ad tech industry has been busy since Google announced it was removing third-party cookies from Chrome. The digital ecosystem relied on cookies to deliver relevant, targeted ads and to measure campaign effectiveness.

Without cookies, advertisers will have to rely on first-party data and find new ways to deliver effective digital ads programmatically. 

“The next two years are critical and advertisers will need to research and experiment and most importantly really interrogate what is coming on to the market to replace third-party cookies,” said Clare O’Brien, head of media effectiveness and performance at ISBA, the trade body representing UK advertisers. 

For many digital advertising professionals, this change requires a fresh look at what valuable content and marketing look like. Marketers will have to deliver highly valuable content for consumers to earn first-party data and they’ll have to start mastering different data models.

“Google’s cookie deprecation and Apple’s many privacy initiatives represent an opportunity for marketers to up their game on when it comes to their own cohort modeling and contextual analysis initiatives,” writes Andrew Frank, VP distinguished analyst at Gartner. “This can be done in addition to shoring up first-party data collection and consent management to gain a competitive edge.”

A marketer case study for Unified ID 2.0

Earlier this week a brand case study was (finally) released for the UID 2.0. Though ad tech companies and publishers have been experimenting with the new solution, brands have been slower to jump on board. Most are waiting for the industry to establish which tool will be the next standard. 

“Marketers want to be early adopters, but not the guinea pigs,” explains James Hercher at AdExchanger. But one brand took the plunge. 

Made In, an eCommerce cookware manufacturer, recently completed a streaming TV campaign running on UID 2.0. They saw a 20% decrease in its average cost per acquisition. On top of this, customer acquisition decreased by a third when using the identifier.

By taking the risk, Made In proved that they could deliver successful campaigns without cookies. With cookies depreciating, we’ll see more brands begin to adopt new solutions and publish their results. 

Digital advertising isn’t going away. Brands, publishers and ad tech companies will need to adopt solutions that benefit everyone, while protecting the consumer’s privacy. As these companies go through major changes, are they shifting their digital spending?

MediaRadar Insights

Despite the changing ecosystem, programmatic advertising continues to increase year-over-year. 

In 2021, over 279 thousand advertisers spent $21.3 billion in programmatic advertising (January – September). This is up 61% from 2020 where 189 thousand advertisers spent $14.7 billion.

Brands that benefited from the pandemic largely drove programmatic spending last year. This year, consumers are spending in new ways, causing a slight shift in the top spending categories.

The main difference is that Tech has become less dominant, while Entertainment brands have newly emerged as a top spending category. This is a reflection of the recovering economy.

Within the top 20,000 advertisers, the top spending categories in 2021 are: Retail, Finance/Real Estate and Entertainment. Last year at this time, the top categories were: Retail, Finance/Real Estate and Tech. 

Advertisers that fall within the ‘Other’ category make up 18% of all spending—more than the clear-cut categories. 

Top spending advertisers are: 

• SmartNews Mobile App
• Walmart
• HBO Max
• Capital One Shopping
• Disney+.

Their spend totals $711 million—which is an increase of 73% compared to last year. (This excludes SmartNews Mobile app because it is a new programmatic advertiser). 

Just like last year, there are many new brands willing to experiment with programmatic. 63% of advertisers are new to the programmatic space. While we don’t know how long they’ll stay, we believe that digital advertising and programmatic buying will only grow in importance post-pandemic, even without cookies.

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Though the ad tech industry is in constant conversation about what this means (spoiler: most people don’t exactly know and first party data really matters), it’s still important to keep updated as new developments arise. 

Here’s a check-in on the latest updates regarding alternative cookie solutions.

With cookies depreciating, an alternative is necessary

With the removal of the industry standard for digital tracking, many companies have developed alternative solutions—creating a frenzy of ad tech deals. Leaders have questioned which alternative solution will emerge as the next industry standard?

Right now there are more than 100 alternative identity and contextual solutions coming to market, according to continuing analysis by MMA Global and Prohaska Consulting. Though exciting, this hyperactivity is not sustainable. Buyers and sellers need to have compatible data and technology.

For this reason, ad tech leaders are paying attention to alternative IDs that are gaining the most steam.  

The Unified ID 2.0, (UID 2.0) which was originally developed by the Trade Desk, is becoming increasingly prevalent. Advertising companies like Publicis, Omnicom Media Group, LiveRamp, Lotame, IP5, Index Exchange, Magnite, PubMatic, OpenX, SpotX and most recently IPG have signed on in support of the technology. 

Companies appreciate the UID 2.0 because it’s transparent, open source under an industry body run by the IAB Tech Lab, and perhaps more importantly, it can be used within a company’s own privacy walls. 

In March, the UID 2.0 entered beta in the States and it recently began beta testing in Canada. It’s a key time for publishers, agencies and other businesses to experiment with the technology to see if it’s a good fit.  

Xandr builds flexible platform to bring multiple solutions together

While companies seek a new industry leader, flexibility will be key.

Xandr, AT&Ts ad platform, announced that it will be accommodating different needs and choices. The digital marketplace will support nearly all future ad IDs, including Unified ID 2.0, LiveRamp’s Authenticated Identity Infrastructure and netID in Europe.

“Xandr has been head’s down evaluating the many ways we can flexibly support our clients on both sides of the marketplace, as we approach the deprecation of third-party cookies and identifiers,” said the company. 

Especially after COVID, companies recognize the need to be nimble. With this approach, buyers and sellers will have a common currency even if they choose a different identifier.

What will Google do, or be allowed to do?

Though there are clearer paths forward than there was last year, there are still many looming questions. Google has explicitly stated that it will not work with alternative solutions. 

At the same time, Google is under investigation by the U.K.’s Competition and Markets Authority (CMA). It has massive droves of data. By removing the cookie and not supporting alternatives, the company may be found to be abusing its market dominance, breaching competition law. 

Google faces similar monopoly lawsuits in the United States, though not tied to the demise of the cookie. 

Google is cooperating with the CMA and asking for industry feedback on their Privacy Sandbox initiative.

Many questions still linger, but the mood may be shifting from frustration to a new sense of opportunity. And with some solutions becoming more ubiquitous, like Unified ID 2.0, there may be more clarity about which options companies should experiment with over the next year.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

Every time Google releases a new blog adding to the cookie saga, the industry goes a little crazy.

And now, the latest announcement is that Google is delaying its farewell to the cookie until 2023. Not only that, but it has given UK authorities full oversight of the transition. 

Marketing Firms Weren’t Happy with Google

Third-party cookies allow advertisers to track user behavior across websites in order to deliver personalized advertising. Over the years, digital advertisers have become accustomed to a vast amount of data and the removal of cookies presents a real threat to how they operate. 

Without cookies, digital advertisers will have a harder time tracking visitor behavior across other websites. But not only that, Google may become an even greater force in digital marketing (if that’s even imaginable). 

Google has troves of first-party data collected via its search engine, Youtube, Gmail, and app downloads. Critics of Google’s decision to remove cookies argue that the decision was not an altruistic ‘privacy-first’ decision, but an effort to build up its moat.

Critic Brian Handrigan, chief executive of Advocado, put it this way: Google is a “wolf in sheep’s clothing” and it’s newfound love of privacy was a “land grab.”

So They Took Their Concerns to the UK Government

Though Google was developing solutions that enable advertisers to deliver relevant ads without individual identifiers under The Privacy Sandbox initiative, marketing firms continued resisting Google’s decision. 

Last year a group of 20 marketing firms filed a competition complaint with the UK’s Competition and Markets Authority (CMA), saying that they “share a concern that Google is threatening the open web model that is vital to the functioning of a free and competitive media and online economy.”

Google Welcomed Feedback and Offered an Oversight Period

About three weeks ago, Google told the CMA and the public that it was committed to increased transparency, substantial limits on its use of Chrome data for advertising, and that it wouldn’t discriminate against rivals in favor of its own advertising products. 

Google also volunteered the CMA a 60-day “standstill period” in which the watchdog could reopen investigations into any issues. And it delayed its cookie sunset by two years (including the six months of oversight period). The current plan is to start saying good-bye to cookies over a three month period starting mid-2023.

Though the CMA is taking the lead as the primary regulator, it will be asking for input from the broader web community during the six-month consultation period.

“The CMA is now asking others in the industry for feedback on these commitments as part of a public consultation, with a view to making them legally binding,” wrote Google legal director Oliver Bethell on the Google blog. “If the CMA accepts these commitments, we will apply them globally.”

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