Thanks to Google, making sense of a world without third-party cookies continues to be a challenge. And it’s hard to plan for the end when it’s so unclear when that will be.
Really what the latest delay does is give more time for things to get confusing for marketers — especially when it comes to how to target people without those cookies. In other words, the already-crowded market for alternative ways to do this will only get more crowded.
To separate the wheat from the chaff, here’s a primer on how the different alternatives are shaking out. There are exceptions and nuances, of course, but in general the alternatives tend to fall into one of three categories.
First, there’s the replacements for a one-to-one identifier. Think The Trade Desk-backed Unified ID 2.0, or similar solutions touted by companies like LiveRamp and ID5. These alternatives are essentially trying to replicate what third-party cookies do in various privacy-compliant ways. In some cases, for instance, they do so by replacing third-party cookies with hashed and encrypted email-based IDs.
The main issue with this category is not security (decryption or signing schemes), but consent. Take Unified ID 2.0, for example. The success of it is predicated on being able to pass an email address (in whatever form) into a targeting or profiling machine that could be deployed across publishers. Something like that needs a very sophisticated way of gathering consent — maybe even a user portal for insights and withdrawal — at least in Europe. Plus, publishers need to be ok with onboarding their readers onto the identifier. Not every publisher has the sort of clout to convince people to sign in to their sites.
None of this is beyond the realm of possibility, if ad tech vendors are to be believed. Many of them continue to pour considerable resources into developing and marketing these alternatives. In fact, just this week, MediaMath joined the group of companies backing Unified ID 2.0 — despite the fact that it’s the alternative being spearheaded by its longtime rival The Trade Desk. For now, though, the scale of these solutions is sparse at best, or very narrow at worst.
“We already support ID solutions from LiveRamp, ID5, Parrable, Lotame, LiveIntent and others — our aim is to deliver our clients the best solution for their market, data set and campaign goals, so adding UID2.0 to our roster makes perfect sense,” said Sylvain Le Borgne, chief partnership officer at MediaMath. “Broad scale adoption by publishers will be key to providing meaningful metrics and analysis, and some challenges, like household measurement, will need to be overcome — we look forward to seeing how The Trade Desk approaches these challenges.”
Next, there are the device-managed audiences, or solutions like Topics and FLEDGE from Google that are built through browser APIs. Let’s look at FLEDGE, for example: The proposed tool from Google is meant to facilitate remarketing by letting someone’s browser, not the advertiser or ad tech vendor, control advertiser-defined interest groups that a browser is associated with. Topics is wired in a similar fashion: It’s designed to use the Chrome’s browsing history to automatically gather information about users’ interests so that they can be shared with other ad businesses — all avoiding to prick privacy concerns.
In short, these solutions work on the premise that all targeting and measurement will move to the browser. This way, less data is revealed, the mechanisms that do it are controlled and, subsequently, the sharing of them is more restricted. At least that’s the theory. As ever, the devil is in the details — many of which are yet to be discovered.
What is clear, however, is the latest iteration of FLEDGE — the one that’s being tested now — has Google as the central gatekeeper. There’s no surprise there. But unless this is addressed, any progress toward a final solution is likely to be limited. Indeed, there are many supply-side platforms that aren’t participating in the trials, and it’s not hard to see why.
Therein lies the main challenge. There’s a lot of cynicism around these solutions that’s yet to be tempered. Think about it: Google seems to be saying, “If we can get you to focus on contextual targeting and broad audience segments, we can show you lots of inventory and leverage our existing systems (like quality score), just at less granular levels.” That in turn perpetuates the fear of missing out on the inventory, and forces marketers to accept whatever data Google provides.
Lastly, there are seller-defined audiences. Simply put, this is where the publisher or some intermediary says, “Hey marketer, you don’t have the ability to recognize this user because you’re a third party, but I can because I’m a first party, so here’s what I know about the user.” That data then gets transmitted into the bidstream that marketers can target against.
Right now, SDAs aren’t really available at scale. Tests are just starting up. So there’s no concrete feedback to speak of yet. However, publishers have high expectations for SDAs despite the considerable costs and work that go into setting up these deals. And why wouldn’t they? After all, SDAs give them more control than ever over how their audiences are bundled and sold.
By now it’s probably clear that each of these categories has different forces working for and against them. Sure, they will likely all work alongside each other one day, but it’s clear that different sections of the market want as much to happen through their backed solution as possible. Look at supply-side platforms, for example. It’s pretty clear that they have a soft spot for SDAs. In many ways, they’re a means to an end for those companies.
That end is survival. Listen to most SSP bosses talk right now and it’s clear they see themselves in a future state as becoming a data clean room of sorts — a platform where marketers and publishers can join their data anonymously to identify audiences that are attractive to the former. When the bid requests for those audiences go out, the publisher doesn’t have to disclose who the user is. It just signals to the demand-side platform that this is a high-value audience for the marketer in question. And the DSP buys it. If this happens, then SSPs don’t necessarily have to compete with as many of those ad tech vendors because they’ve effectively been reduced to workflow tools.
The same sort of machinations are at play for the other options. The bottom line is marketers have their work cut out for them when it comes to making the right choices for their businesses.
“Test and learn has to be the mantra for marketers right now and working with select or trusted partners to understand which solutions or approaches best suit their business requirements,” said Rhys Williams, tech and activation lead at media agency the7stars. “I think it’s very hard to pick a clear winner but we are starting to see techniques or methods that are more than likely to form part of the longer term answer to privacy first marketing — data clean rooms, identity graphs and cohort creation. Marketers should be building these into their roadmaps for Q4 2022 and in 2023.”