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Why the industry shouldn't be trying to replace cookies

(Image credit: Image source: Shutterstock/Toria)

At the last IAB leadership summit, considerable talk was devoted to what will replace third-party cookies. And rightly so – we should see this as an ideal opportunity to re-architect the ecosystem and create a better experience for people, publishers, and advertisers.

Rather than trying to “fix” the third-party cookie, ad tech’s Atlas deserves a reprieve from having the weight of the ecosystem on its shoulders; a herculean task never intended for the humble technology. Now is the time to fundamentally change the ecosystem and replace the flawed, cookie-based architecture with a new one focused on privacy-centric, people-based identifiers.

How we got here

If we look back, we could have seen that the path we were on wasn’t going to end well. The industry didn’t effectively explain the value exchange across the open internet, and so consumer trust was lost. They knew cookies were being dropped that tracked them, but there was little transparency into why, and it is this lack of understanding that led to suspicion and concern. At that point the legislators stepped in, followed by Safari and Firefox browsers, and blocked third-party cookies. Google also recently announced it will eliminate third-party cookies by 2022. And it doesn’t stop there, new privacy laws are coming to fruition in increasing numbers of countries and regions around the world.

There’s no hiding the fact that cookies outlived their usefulness long ago, and complacency is probably the only reason why other solutions, many of which have been in development for over the last year or so, have only recently seen adoption start to spike.

Replacing an outdated identifier

For publishers, brands and technology providers that have yet to fully ditch the cookie, we’ve outlined below why it’s imperative to act now, rather than wait for the clock to run out on the 18 month timeline Google set on its browser.

  • There’s no transparency; consumers have little insight into how their data is being collected and used. Even though GDPR has meant a raft of cookie notices explaining that sites contain them and their purposes, there is still a need to make the value exchange clearer. In a recent webinar, Goodway Group’s Amanda Martin described cookies as ‘consent by hostage’ as consumers were not giving their consent through trust but because they had little choice if they wanted to access the content.
  • Cookies also represent the device and not the person. Frequency capping helps avoid ad fatigue but using a cookie-based solution means the tool is ineffective (even more so when campaigns are cross-channel). Say you capped an ad to show no more than five times, if that person owns three or more devices you could end up showing that individual the same ad over 15 times.
  • Cookies aren’t supported on mobile apps or connected TVs (CTVs).
  • Data loss is another factor. As you move through the ecosystem from the SSP (supply-side platform), DSP (demand side platform) and DMP (data management platform) , the effects of data loss increases to the point where a starting audience of a million could have an overall find rate of just a quarter of that.

All of which underlines the importance of moving away from the use of third-party cookies sooner, rather than later.

A way forward

Aside from the flaws, the death of the third-party cookie should be welcomed as an opportunity to collectively work together in building a trusted ecosystem that is enabled by tech. One that is built on consent where the buy side, sell side and everyone in between works collectively with a shared goal and focus. Where the consumer is helped to understand the value exchange and authenticates because of the trust they have with both the publisher and the marketer that their personal data is handled in a privacy-safe way.

One of the forerunners that is being embraced by publishers, advertisers and adtech companies centers around putting the user first by embracing a people-based ID.

With a consumer-first approach, empowered by a people-based ID, the relationship is rooted between publishers and marketers and their respective consumers. Technology acts as the connector between these parties to create a people-based identifier, but only through a privacy-first approach which uses end-to-end encryption.

An ecosystem that better connects publishers and marketers

Publishers have worked hard to build their first-party data and using a people-based ID enables them to connect to and leverage without having to share personal data. It’s also an opportunity for publishers to engage with their audiences around the value exchange and redefine it through first-party authentication events. Technology can then help connect these authenticated events with marketers.

In fact, as we move away from third-party cookies to embrace this new trusted ecosystem leveraging people-based IDs, it will enable more data collaboration and partnerships between the brands and publishers and a much better experience all round.

Moreover, for marketers, it will help them to buy and measure media far more efficiently than is possible now in the open web. They can take their audience data and overlap it with publishers’ data to gain unique insights about their target audience; create joint segments by overlapping data, activate new audiences through premium programmatic capabilities and measure effectiveness with transaction data. By being able to identify audiences, marketers will also be able to deliver relevant messaging to them or even exclude individuals from campaigns. Ultimately, improving the data held by the publisher and marketer by bringing them together and enabling them to better connect the dots between their own respective audiences.

Stop looking for workarounds

As we head towards 2022, the industry has the time to get it right, but only if we act and choose the right path. We can’t waste time by investing in incomplete or unsustainable solutions like placing hashed emails in the bidstream or worse – fingerprinting. Finding a workaround to replace the cookie isn’t good enough; the industry needs a solution that prioritizes and upholds trust. We need to do better, and we can do better, because the tools to achieve a new trusted ecosystem exist right now.

If we genuinely want a solution that persists - even amidst ever-evolving privacy regulations and consumer expectations - and works for all, it starts with a trusted value exchange built around end-to-end encrypted people-based IDs.

With the death of the third-party cookie in the not too distant future, the time to reshape the ecosystem is now, before it’s too late.

Zara Erismann, MD Publisher Europe, LiveRamp