The news that Google will no longer be depreciating third party cookies has been spoken about a lot, including by our partners at Search Labs. The main takeaways are: 

• Google will still allow people to opt out of cookies permanently, there will be an impact felt by this 

• Various browsers and operating systems had already disallowed third-party cookies, meaning the AdTech industry was already shifting to other forms of identity resolutions for tracking and measurement.  

• To some degree, the drop in identifying signals will need to be replaced by modelling for both targeting and measurement  

This means that in reality, nothing much is changing… So, instead of going into more detail on why this matters, I wanted to ask a question: who does this matter to? Brands? Agencies? AdTech Vendors? Media Owners or Publishers? Who really needs the third-party cookie, or any of its alternatives, to stay in business? 

Ad Tech Vendors & Digital Publishers

The cookie has powered this section of the advertising ecosystem for years, playing a much more important role in their business models than brands’. The sheer scale of digital advertising inventory that became available as the internet grew necessitated a common way to value it at scale, in a way that everyone could use. Cookies did this by recording browser and website behaviour allowing vendors to use this information to build profiles and target audiences. However, this resulted in a model where the industry has ended up building ever more sophisticated models to game the system and chase these data signals.  

Over 50% of available web inventory is already cookieless and this is continuing to shrink, so the market has already had to adapt. AdTech vendors and digital publishers using cookie-based technology will continue to face issues in an ever-decreasing pool to identify and monetise audiences, which for advertising means fewer effective solutions. But the market is shifting. We’ve already seen several cookieless models appear and the power of first party data is becoming ever stronger.  

Contextual targeting, which prioritises the content surrounding an ad placement over the identity of a user, is one of the core ‘replacements’ for the cookie. In traditional media, a lot of value is placed on ensuring that media placements are contextually relevant. We buy certain airtime on TV at a premium because it’s contextually the most valuable. So why has digital marketing historically valued cookie-powered audience targeting above contextual relevancy? Brands and agencies certainly saw better short-term ROI when relying on cookies and AdTech vendors and publishers could certainly monetise more inventory. But in the end, did consumers get the best deal? 

So, are cookies really vital for anyone across our industry?

Cookies allowed for a huge amount of data to be collected across the web. The industry took advantage of this new and unregulated data and sold the promise of hyper targeting, competitive advantage and huge sales growth. However, we have seen over time that regulation was required, user experience has diminished, and the digital world has joined a race to the bottom for the bidding algorithm. 

So, are cookies vital?  

Well, no. Cookies have been ‘on their way out’ for a number of years anyway. We will just need to continue to adapt as an industry. Maybe we will end up with a space which delivers more creative, more engaging and contextually relevant advertising to consumers, while delivering true value to clients.