With Google considering following Apple in blocking third-party cookie targeting in its Chrome browser, digital marketing seems on the verge of a seismic shift.
In the programmatic era over the last 10 years or so, ad spend in display and paid social have been dominated by their abilities to find audiences via cookies. Much will depend on the detail, but let’s see who is best placed to succeed in a post-third-party cookie world.
The duopoly (aka Google and Facebook) stands to take a hit on this in absolute terms. Both have huge retargeting businesses that will surely be restrained. Yet their footprint of logged in users protects them compared to their competitors so they may end up even more dominant.
With the sad recent news about Sizmek’s Chapter 11 filing, this sector is under the microscope. However, such a move by Google could be good news for both Flashtalking and Adform (and even a reborn Sizmek).
These companies have cookie-less tracking technology that could be vital in the new world and give them an edge over the dominant Google Campaign Manager (formerly DoubleClick). This could see these platforms pick up customers in a similar way to last May when Google’s change to user IDs in data transfer caused some brands to review their practices.
Criteo was hurt by the rollout of Apple’s intelligent tracking prevention and would likely be further hit by any change here as Chrome has approximately three times the market share of Safari. By the same logic, AdRoll and other companies that make the majority of their money from retargeting would likely be significantly impacted.
Quantcast, though not as known for retargeting, still relies on cookie-based audiences to feed their machine learning and would need to show that their techniques are as effective outside of the third-party cookie world.
DSPs would face a lot of upheaval, and all incumbents would be exposed to the shifting sands. Today, there is a stark difference in bids between users that have a solid cookie-based history and those that don’t. Further restrictions on Chrome will put pressure on the DSPs to show they can shift to new buying models as well as endure a short-term slump in demand.
Companies like AppNexus (aka Xandr) plus Iponweb and, importantly, Google itself would have an advantage here as they operate on both the supply-side and demand-side, so they could look to enrich ways of buying beyond the cookie.
Beeswax would likely come out stronger for the change as their model predicates building innovative solutions for clients and would likely offer solutions to the challenges faster than most others. The Trade Desk, Adform, Amobee, Adobe Advertising Cloud (aka TubeMogul) and Conversant would need to show that their integrated data management platforms and data offerings that allowed them to succeed.
For publishers, there would surely be a short-term hit, as has been seen with the Apple move. This came at a time when publishers can afford it least. Buyers would still buy inventory, but at lower yields than before.
However, there may be a positive twist for publishers if the industry moves to content and quality. It could shift money away from the long-tail to premium content producers. For the publisher ad-tech layer, primarily the supply-side platforms, a move by Google away from third-party tracking would cause big problems. No SSP today that I am aware of monetizes cookie-restricted inventory well, so it would require a big shift from them to be anywhere near ready.
DMPs and data marketplaces
Arguably the toughest challenge will face the data management platforms and data marketplaces. Due to the nature of real-time bidding today, these platforms are very reliant on cookies and would very likely take a big hit in the short term. Unlike SSPs and DSPs, this group generally has less exposure to the start or end of the buying cycle and would be reliant on others to rebuild an ecosystem for them to flourish in. Data companies with access to clients would be more protected as they would have the opportunity to shift how their data is executed out of a cookie world.
Many of the techniques that have been effective for buyers in the last 10 years will now be far less so. Thus, to get the same returns, they will need a big shift in buying strategy. It’s faster to move a strategy than re-engineer a product, so many companies in this space will be fine. However, they will need the skills and support from partners to move—and to do so quickly.
Such changes then create opportunities and threats across the board. Some companies and sectors are more protected than others, but for everyone it really does become an “adapt or die” situation.