To paraphrase an old saying: Nothing focuses the mind like a deadline.
The deadline in question is Google’s stated intention to phase out third-party cookies from its Chrome browser by the end of 2024. According to its timeline, it will start this process gradually in January to give marketers a chance to prepare for its final deprecation by year’s end.
Will advertisers be prepared for this impending signal loss? For all their failings, third-party cookies became the main mechanism that enabled cross-site tracking, so for many marketers, finding new strategies is mission critical. The Current spoke with several agencies and brands to hear how they’re preparing for the long-awaited demise of the cookie. What we found is that the future is already here if marketers choose to embrace it.
“You don’t need to wait for the Chrome deadline,” says Sarah Polli, the senior director of marketing technology at Hearts & Science. “The great news is there are a lot of solutions that you can already do today. It behooves you to just start taking advantage of them.”
To hear Polli tell it, now is the time for marketers to start testing different approaches to data, which include everything from modeling to predictive audiences to contextual targeting. “I like to compare this to a toolbox. To run media properly today — in order to build a house — you need multiple tools. You can’t do everything with just a wrench. And cookies are wrenches,” she says.
“And the same thing [goes] for targeting. We may want to use contextual, or a mix of predictive. And if you have any first-party data that we could enrich and bid on, we absolutely want to use that,” she says. “It’s just going to be all the tools and signals that are available.”
In short, companies need to diversify their strategies based on their goals and leverage all signals available to them.
Polli isn’t the only marketer to point out that, effectively, cookie deprecation has already happened on Apple’s Safari (or any browser running on an iOS device), which has over 1 billion users worldwide. (Chrome has nearly 3.4 billion and is the world’s most popular browser). “We’ve already moved toward a disrupted identity ecosystem,” says Sara Owens, the SVP of analytics and data science at Media Matters Worldwide. “We’ve already seen the negative impacts when it comes to reaching audiences, targeting audiences, but also with measurement.”
Brands that still rely heavily on third-party cookies are “leaving significant money on the table,” according to a 2023 study by Adobe. It found that “83 percent of leaders at cookie-dependent companies say that at least 30 percent of their total potential market is in environments where third-party cookies don’t work, such as social media platforms and on Apple devices.” Meanwhile, nearly half say that 50 percent or more of their potential market is in cookie-free environments.
Not surprisingly, there’s a renewed focus on the value of identity data in driving an effective return on investment. Many brands are enriching their identity graphs using alternative identifiers such as Core ID, RampID, or Unified ID 2.0 (UID2). Such identifiers, for example, may be built on pseudonymized versions of a user’s email, allowing marketers to extend their campaigns at an individual level without compromising privacy.
“There is no one single answer to identity and there won’t be a single answer to identity. And that’s OK,” says the marketing lead of a global cosmetics company. “The question becomes, like [with] any other tech-stack solution that you come up with in order to run your business, ‘What is the stack of identity graphs that we’re going to use? What do we use them for? What are their purposes, and what do they deliver for us?’ That’s what we’re trying to make sure we have lined up and ready to go over the course of this coming year.”
Brands that have used alternative identifiers don’t necessarily see them as cookie replacements. Rather they represent a more effective way to use first-party data in an ecosystem that has evolved significantly since cookies showed up in 1994. Whereas cookies allow advertisers to track users across websites on a desktop, these days customers are everywhere, from mobile apps to connected TV — all environments that do not rely on cookies.
With that in mind, the software and device manufacturer HP started testing UID2 last year to help improve addressability across all digital channels. The brand’s media buys focused on Disney and Hulu inventory, its primary CTV supplier, which has already integrated into UID2. “Adopting UID2 is HP’s way of continuing to target audiences without wasting money,” says Freddie Liversidge, VP of global media at HP. The move was triggered by an MIT study that found a large percentage of HP’s digital ad spend was directed toward people already retired.
Because of the improved targeting accuracy that HP saw with UID2, the brand decided to double its budget behind the ID between Q2 and Q3 in 2023, as Caitlin Nardi, programmatic lead at HP’s North America business, told The Current.
This rethink on identity is not limited to the United States. The FairPrice Group — the largest supermarket chain in Singapore, with access to over 90 percent of the country’s households — wanted to find a new way to reach its target audience without compromising privacy. It tapped its extensive first-party data to create a seed audience for lookalike targeting to reach new consumers who shared similar qualities with current customers who’d shopped at FairPrice.
It tested this new approach during its Diwali campaign in October 2022, comparing the effectiveness of building lookalike audiences from device IDs and mobile ad IDs with those built using customers’ hashed email addresses, translated into UID2 identifiers. The results of the UID2-powered approach showed a twofold increase in incremental reach but also demonstrated efficiency, driving a 33 percent lower CPA. “This compelling evidence established that UID2 is an innovative pathway to connect with our target audiences across the open internet without relying on third-party cookies,” says Iris Paulase, the performance marketing lead at FairPrice Group.
This type of modeling is going to be a key piece of an advertiser’s strategy when it comes to reaching audiences on the internet, says Sara Owens. “If it’s modeled, it’s not about any one person, and I still think they’re strong signals,” she says.
For Owens and her team at Media Matters Worldwide, another area of focus is measurement. “We want to be able to measure across our plan and you can no longer do that deterministically because you don’t have full visibility into user identity,” she says. The company is beta testing its own AI-powered proprietary solution called Agile Mix Model, which doesn’t rely on user-level data and can measure everything from digital channels to walled gardens, any media vehicle where the company can track spend over time.
“Whether you’re running a brand campaign and you’re measuring attitudinal metrics like lift in awareness or purchase consideration, or if it’s more of an acquisition campaign and you’re tracking sales and conversion rate, those are outcomes. And that’s what every marketer should be using, and that’s available today,” she says. “It’s agnostic of cookies and whether they’re there or not. [Cookie deprecation] changes the how, but it shouldn’t change the what.”
As the clock ticks down, it seems agencies and brands are alert to the challenges and opportunities of the post-cookie world, even if there is no industry consensus on what comes next. “A lot of people have ideas, and whether or not they’ve been tested thoroughly enough remains to be seen,” says Kevin Telkamp, VP of media operations at Ocean Media. “The important factor is to choose trusted partners, to be testing thoroughly, to have these solutions front of mind.”
“I don’t think anyone’s going to have the full understanding of the impact until the lights go out. On judgment day, we get to see what happens.”
The Current is owned and operated by The Trade Desk, Inc.