We are in the middle of a revolution in digital advertising. User targeting based on third-party cookies is in its twilight by anti-trafficking tech presented by leading browsers’ providers. The cookies’ era is coming to an end. It is a big concern for advertisers who heavily rely on this technology.
What is a cookie? What are the user’s privacy anxieties? How will advertisers target users in the future? I’ll answer these questions in this blog.
What is a cookie?
Cookies are small text files containing information about the user. They are downloaded when you visit a website for the first time. Usually, they include the website’s name and unique user ID. But there are also more comprehensive, holding information about user’s behaviour on the website, links clicked, colour preferences, etc.
At the first look, the idea looks innocent. Cookies help to improve and to deliver a more personalised experience. But there is also a darker side. Third-party cookies are following user’s activities across all web, not only one particular page. They monitor behaviour and preferences and then sell this data to advertisers who can deliver more personalised ads.
Critics point out that many information collected by cookies are too personal and detailed. There are also many data breaches resulting in leakage of personal data.
Internet users’ privacy has become one of the hottest topics in conversations across all industries involved. Cookies played the leading role in them. Various voices of opinion leaders, institutions, and users shouted out the necessity to protect privacy in the Internet. Apple was the first of the leading browser providers, and in 2020, they decided to ban third-party cookies in Safari.
Google and the ad industry firstly solely criticised Apple’s move. They elaborated that it will destroy the advertising industry, and it will be impossible to deliver a personalised experience to the customer. These complaints were ignored, and Microsoft, Mozilla, and finally Google followed Apple’s steps.
What after cookies?
Third-party cookies will exist only in a small part of the market. Does it mean the end of behavioural targeting? Probably not. First-party cookies are still functioning, so web developers will gather information about consumers. But only this information allowed by users, so it’s a significant improvement from a privacy perspective.
Lack of information from third-party cookies means problems for programmatic advertising platforms. As I explained above, they provided a lot of behavioural data, helping to target audiences granularly. Now it will be more challenging.
The role of contextual advertising
But it doesn’t mean it’s impossible to target ad without third-party cookies. Advertisers still can deliver their message to potential audiences without breaching their privacy. Contextual advertising will probably play the primary role in the post-cookies advertising landscape. By this approach, ads are displayed on websites basing on their content, not previous user’s behaviour. So, for example, on blogs about beauty, we can expect ads about cosmetics.
Contextual advertising is way more privacy-friendly and can also be very efficient. On the other hand, it’s based mainly on sites descriptions and how they position themselves. There is a lot of space for ad fraud and zombie websites in which only visitors are bots watching ads.
The future of digital advertising
First-party data will be the most valuable in digital advertising of the future. It can result in more frequent direct deals between ad buyers and ad sellers. The RTB platforms might lose their dominant position as middle-man will not be as significant as it is right now, and also it is more vulnerable to ad fraud than direct deals with legit web pages.
Google is not giving up on attempts to develop technology to track users’ behaviours. But their FLoC idea to gather users into clusters is widely criticised by opinion leaders, competitors, government, and users.
The movement of improving privacy on the Internet is not stopping. Apple in IOS 14 released a new feature, allowing users to block collecting data by apps. It enraged Facebook which business model heavily relies on data collected from users and offering well-targeted ads to advertisers. We will see what these tensions will bring for the ad market.
Probably 2022, when Chrome will ban third-party cookies, will be the end of the era of behavioural targeting in advertising. There are very intense researches on how to substitute it with respect for Internet users’ privacy. It’s impossible to tell how it will look after this date. But undoubtedly there are massive changes for the ad industry ahead.