Adrian Watkins

The industry is racing against a 2-year countdown.

Some are calling it the “cookie-pocalypse.” Others see it as a new dawn for the $565 billion global ad industry. What’s certain is that Google Chrome’s decision to phase out support for third-party cookies will affect everyone in the digital media industry.

While the move was not unexpected, at least among industry insiders, most will be preoccupied with it during the two-year window to overhaul and replace what has been one of the key tenets of digital media trading since its inception.

Marketers wary of the industry’s reliance on Google will have to figure out how they can adapt their first-party data strategy as some of the de rigueur marketing tools of recent years are rendered redundant in most internet browsers. These include third-party data and data management platforms, and multitouch attribution providers, all of whose days would appear to be numbered (at least in their current guise), as third-party data has been a critically important part of how marketers shape their communications strategies with consumers for close to 25 years. For instance, Procter & Gamble, one of the industry’s largest-spending advertisers, this week effused over its frequency capping efforts at the National Retail Federation’s annual conference.

However, identifying audiences online will be significantly more difficult (albeit not impossible) after 2022 within Google Chrome, which currently accounts for more than half of all installed web browsers, according to W3C.

Advertisers aren’t angry with Google, just disappointed

The tone some of the industry’s leading trade bodies took in their responses to the news reflected the scale of the challenge ahead. “It may choke off the economic oxygen from advertising that startups and emerging companies need to survive,” read a joint statement from the ANA and 4A’s.

The statement continued: “We are deeply disappointed that Google would unilaterally declare such a major change without prior careful consultation across the digital and advertising industries. In the interim, we strongly urge Google to publicly and quickly commit to not imposing this moratorium on third-party cookies until effective and meaningful alternatives are available.”

Meanwhile, Jordan Mitchell, online identity and digital privacy lead at IAB Tech Lab, made his preference for collaboration known as Google looks to develop ad targeting and measurement tools in its Privacy Sandbox.

Historic precedent

The rollback of cookie support by some of the industry’s major cookie providers is not without precedent. In April 2017, Apple began rolling out intelligent tracking prevention in its Safari web browser. Shortly thereafter, Mozilla implemented similar measures in Firefox.

Andrew Casale, CEO of Index Exchange, told Adweek this has affected publishers in Germany, one of the world’s biggest media markets, where Firefox use is much more prevalent than in the U.S.

“We haven’t seen a recovery in CPMs on either platform,” Casale said. “So, if the same events occur in Chrome with the same results, then there is a significant concern that there will be a reduction in budget toward publishers.”

Paul Gubbins, global programmatic strategy lead at Unruly, highlighted the potential impact Google’s decision could have given Chrome’s vastly superior footprint to the other two browsers.

“With the value of first-party data going up drastically following this announcement, I suspect many publishers today will be seriously reevaluating their authenticated data strategy rather than waiting for a multitude of device graph sales pitches in the coming months,” Gubbins said.

Both Casale and Gubbins separately told Adweek that many publishers have avoided asking users to register their data (effectively meaning sign in to their websites), but that may change as 2022 approaches. Casale predicted that publishers across the globe will look to emulate a countrywide sign-in initiative in Germany, where media owners have attempted to reduce their reliance on cookies for ad targeting.

‘The nail in the coffin for the cookie’

Peter Spande, CRO at Insider Inc., told Adweek that reductions in yield from Apple’s and Mozilla’s targeting restrictions have prompted some publishers to double down on their first-party data strategy.

“This is the nail in the coffin for the cookie,” Spande said, adding that it will make bidding on inventory in open marketplaces less appealing to advertisers.

Spande also predicted that advertisers may look to identify solutions provided by Google within its Privacy Sandbox, potentially providing publishers with scaled first-party data solutions an opportunity to capitalize over the next two years.

Wake-up call

For Mathieu Roche, CEO of ID5, the next two years will be characterized by “madness and transition” as the industry devises an entirely new infrastructure.

Roche believes that while the industry’s demand-side and supply-side platforms will continue to exist beyond 2022, the majority will have to work in harmony to foster an industrywide alternative to the cookie.

In the interim, however, advertisers will likely invest even more of their ad budgets in the walled gardens, which are much less reliant on third-party cookies for audience targeting.

“In the kingdom of the blind, the one-eyed man is king,” Roche said.

Meanwhile, Joe Root, CEO of Permutive, Google’s announcement is a wake-up call for ad tech’s buy-side, as such outfits will begin to feel the pain publishers have felt since the dawn of digital advertising.

“Privacy is causing a massive issue for them,” he said. “The big questions more generally [for the industry] is do we accept the truth that identity is disappearing because it’s privacy unsafe, or do we work to maintain identity?”

Original article