Third-party cookies’ demise spells trouble for the open internet – the industry will need to collaborate to find the right solution for the future, argues Xandr’s Ammar Jawad Doosh.
The deprecation of third-party cookies, Google’s recent extension announcement and the race to find a solution have been heavily discussed as the deadline looms over the digital advertising industry. However, while the challenges and solutions surrounding identity are important, it is also necessary to consider how this is going to affect other areas, such as the sustainability of the open internet.
The tough reality is that a failure to provide effective targeting not only affects marketers’ ability to create impactful campaigns, but also puts at risk the open internet: the websites, apps, games, and video streaming platforms consumed for free.
Powering the open internet
The open internet is powered by advertising and supported by the value exchange between consumers, content owners and brands. If the open internet can no longer provide an arena for effective advertising, then advertisers will be forced to look elsewhere.
This will leave content providers on the open internet looking for other revenue streams, such as placing content behind paywalls and user logins, which risks further fragmenting the online ecosystem that becomes overly complex for buyers and damaging to the user experience.
This in turn will likely force advertisers to shift even more of their digital ad spend to “walled gardens”. These big tech companies have been collecting detailed audience data for years so they are able to precision-target messages.
Advertisers stand to lose, too. A lack of competition could impact not only pricing but also the diversity of media plans. If advertisers are forced to invest in the same platforms with the same data, the chance to differentiate is limited.
This is why the industry must find workable solutions to guarantee the integrity of the value exchange between consumers and publishers, and publishers and advertisers.
The good news is that there are already a number of alternative technologies that could help the industry overcome its current identity crisis and drive monetisation on the open internet, while at the same time supporting user privacy. However, making any of these alternatives work requires a combination of education and collaboration.
Educating the consumer to opt in
With authenticated and consented first-party data being central to most of the proposed alternatives, advertisers and publishers must educate the consumer on the value exchange necessary to sustain the open internet. A steady stream of consented data is key to a prosperous open internet, and so it is vital that consumers are aware of how their data will be used and the way in which this will benefit them.
Too often consumers are confused by multiple layers of opt-in prompts that are motivated either by regulatory or platform operator requirements.
To avoid this confusion, it is important to streamline the consent process to ensure it is a consumer-focused dialogue that states exactly what, why and how their personal data will be used. Various regulatory frameworks and industry standards also warn against the use of manipulative patterns that may be interpreted as coercing or tricking users into consenting, also known as ‘dark patterns’.
Ultimately, the industry should work together to focus on providing a transparent, uniform, and seamless privacy experience that truly adds value to the consumer.
Key alternatives like Industry IDs, curated marketplaces, and clean rooms all require opted-in users.
- Industry IDs allow publishers to expand their access to demand by building coalitions and consortiums to share anonymised IDs or logged-in audience data so that sellers and buyers can consistently identify users.
- Curated marketplaces are bespoke marketplaces within larger marketplaces that allow publishers to easily package up first-party audiences into multi-seller deals for targeting in the DSP.
- Clean rooms provide publishers and advertisers with the ability to match first-party datasets without exposing customer data to either party.
Collaboration can unlock the future
There are, however, alternative solutions that could benefit the open web that do not rely explicitly on first-party data, such as contextual targeting, modelled solutions and browser and app frameworks.
Contextual targeting – where ads are served based on the content that the user is consuming at the time of the ad delivery – has been around for a long time but has evolved considerably since it was first implemented.
Meanwhile, with the rise of machine learning and artificial intelligence, modelled solutions allow publishers to predict and draw conclusions around audience expansion, frequency management, measurement and fraud prevention.
Finally, browser and app frameworks can help address advertising plan campaigns without the need for cross-site identifiers. All of these can be done without any threat to users’ privacy.
While third-party cookies and personal identifiers have previously been the currency the digital advertising industry has traded with, we are now moving towards a more ethical ecosystem and we will need to work collaboratively to navigate this successfully. The challenge will be to evaluate all the alternatives, including those not yet invented, carefully and as an industry.
Collaboration between partners within the ecosystem is now more important than ever. The incentive is that by doing this right the industry can help to ensure an open and sustainable future for the internet.