5 Ways Advertising Could Change If Chrome Blocks Third-Party Cookies

Though initially stressful, it could have long-term benefits

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Online advertising is fundamentally changing.

With increased pressure to bend to the calls for consumer privacy, corporations and governments are doubling down on regulations to block third-party technology that targets consumers. Recently, those winds have produced the California Consumer Privacy Act, GDPR, Apple’s Intelligent Tracking Prevention (ITP) and Firefox’s Enhanced Tracking Protection (ETP) initiatives. All are meant to protect consumer privacy, and all have created roadblocks for the advertising programmatic ecosystem. That’s because programmatic entities rely on third-party cookies as the foundation for user-level targeting and measurement. Without them, marketers can’t target users with highly relevant ads and determine whether those ads lead to sales.

Following complaints regarding its own consumer tracking practices, Chrome is next in line to follow suit. Recently, credible reports began circulating, suggesting Google would be the next frontier to block third-party cookies.

This is major news. With Chrome’s market share at 63%, the implications of losing third-party cookie access in the browser are far-reaching and potentially crippling to programmatic advertising as we know it.

How will this play out? That’s yet to be seen and is hotly debated. But this discussion signals a web of dependencies in programmatic. If the effects of Apple’s ITP has taught us anything, it’s that it is better to prepare for what effective programmatic advertising can look like without having to rely on third-party cookies.

So, what does programmatic look like in a post-cookie world? Here are some potential ways marketers will need to pivot their ad targeting strategies.

Targeting will become contextual

It is better to prepare for what effective programmatic advertising can look like without having to rely on third-party cookies.

Retargeting will dwindle in terms of the importance of online marketing. Instead, context will become king.

In the current advertising landscape, the primary consideration is the person receiving the ad, but that focus would shift to what the user is consuming, where they are consuming it and what their mindset is. Key indicators like keywords, time and location and environmental factors will shape the new targeting. This could also drive IP targeting to the forefront, but that has a series of potential shortcomings. Advertisers will need to be smarter about analyzing the conditions around the consumption of content and consider signals above and beyond the user.

Context and formats will go together

In a future where the industry can’t rely on detailed targeting, ad experiences will need to capture consumer attention more effectively. As advertisers gather more contextual data around user behavior, they’ll need to imbue that relevance into their creative. Formats will be tasked with doing the heavy lifting in order to compete for engagement. As such, banner ads and intrusive pop-ups will be less effective. Advertisers who focus on high-impact formats like native, video and branded content (which often already outperforms other formats) will have a higher potential to resonate with their target consumers.

There will be increasing reliance on publisher data

First-party data will become more valuable for targeting users. Many publishers are already installing first-party cookies on their sites to collect this level of user data and others will likely follow suit. We’ll also see a significant increase in paywalls for content while publishers who want to continue an ad-monetization model will offer free content but with registration requirements that request more detailed data points in exchange for access.

The challenge is that this data still won’t be available to DSPs, so advertisers will have to work with publishers to combine first-party data insights into their programmatic strategy in a way that’s also privacy compliant. Expect an increased usage of insertion orders and/or programmatic guaranteed offerings, with data and decisions moving from the buy-side to the sell-side.

Walled gardens will gain new power

Walled gardens have direct access to their audiences and the means for easily securing consent for first-party data. Because of this, walled gardens will be one of the few areas where brands and agencies can leverage first-party data. That could make advertisers more dependent on these channels for reaching consumers. This has the potential to drive more ad dollars within walled gardens and other platforms with persistent first-party identification and meaningful on-platform engagement and purchase behaviors.

Outside channels look more attractive to advertisers

With new online challenges and legwork needed to find solutions, advertisers will begin to focus heavily on channels that don’t rely on third-party cookies. This will include email, traditional TV and OTT and in-app advertising as these systems help advertisers leverage persistent device IDs for targeting. There also will be new, more seamless ways for brands to leverage their email and CRM data to publishers for the purpose of targeting.

While these targeting changes may be jarring and will require new ways to advertise effectively, they are ultimately a reminder that consumers want more transparency and control of their data. This will be beneficial in the long run for the industry as brands, agencies, publishers and technology companies will have opportunities to innovate and develop more authentic ways to engage with consumers.