The demise of the cookie doesn’t have to adversely affect digital marketing. By evolving current approaches, brands can still achieve considerable reach and publishers can generate much-needed revenues, says Pierce Cook-Anderson of Smart AdServer.
Reaching the right audiences at scale has been the ultimate goal of digital advertising and data-driven ads have been positioned as the way to accomplish this. Those able to access the vast user-level insight this requires have benefited most. But, as the industry learns to operate in the new consent economy, all of that is due to change.
While the GDPR and CCPA have already imposed limits on third-party cookies, we are also seeing moves by big players – such as Apple’s IDFA and Google’s recent changes in terms of privacy – and a growing ethical debate about identifiers. The consent economy will place a greater emphasis on consumer choice, only leaving room for ad tracking and tailoring where users are actively opted in. As a result, user-level data collection and targeting will inevitably shrink.
But this doesn’t have to mean change for the worse. By evolving current approaches, brands can still achieve considerable reach and publishers can generate much-needed revenues. What’s needed is a move beyond standard audience targeting to harness the opportunities offered by approaches built around semantic context, first-party data, and direct deals.
Expanding targeting horizons
Optimism about replacing third-party cookies is high, with recent research revealing that 75% of marketers believe tactics like contextual targeting will be a useful complement to audience first-party data when it comes to ensuring advertising’s continued relevance when the third-party cookie is gone.
The immediate reality, however, is that current volumes of user tracking and targeting are likely to decrease across the programmatic market, particularly following Google’s recent stand against alternative ID solutions for cross-tracking purposes. With many methods reliant on personal information — such as log-in data — it’s also probable that user willingness to give consent will limit scale.
But there is plenty of potential for brands to continue thriving by setting their sights on broader targeting possibilities. Making better use of content-driven ad matching and direct deals will enable them to maintain both precision and reach, without impinging on user privacy. For example, embracing models such as Programmatic Guaranteed brings the benefits of less dependence on ID sharing – and therefore fewer cookie complications – and access to a resource almost half of marketers are considering tapping: first-party data.
Closer trading with publishers will allow brands to take advantage of their capacity to gain direct consent from audiences and gain access to richer pools of first-party data that offer a basis for precise ad targeting. Additionally, Programmatic Guaranteed will also offer much-needed improvement in clarity and control. Over the last few years, buyers and sellers alike have increasingly focused on cutting down programmatic confusion and on boosting cooperation by streamlining supply chains. A shift to more direct transactions and premium ‘Private Gardens’ will take the industry away from open programmatic data leakage issues, as well as the many challenges that come with operating in the prevailing walled gardens. That’s not to mention encouraging vendors to explore vertical integration as a means of increasing their appeal, with simplified deals offering further transparency, as well as more accountable, efficient, and financially-rewarding buying opportunities.
Updating monetisation approaches
Respecting consumer rights and maximising the value generated by consenting users is key for publishers, who are ideally positioned to educate audiences about the online value exchange and the role advertising plays in supporting free, quality content. But while this approach is ideally suited to consent economy mechanics, it does have limits.
This is because not all users will give consent. In Europe, consent rates already vary greatly – from 50-80% – and, as the number and scope of regulations increase, so do the chances that more users will opt out, impacting advertisers’ first-party data assets. Of course, opt-outs will affect all publishers differently, depending on the power of each media brand. But there are other avenues publishers can take to fuel sustainable income and deliver positive user experiences, if they are ready to develop and diversify their monetisation methodology.
Advertising isn’t necessarily vetoed by lack of consent. By reconfiguring ad infrastructure around partners capable of serving ads for non-consenting users, publishers can keep revenue flowing. The most obvious and compliant path lies with adopting context-based targeting that utilises semantic analysis to accurately match ads with content topics and sentiment at a deep level, ensuring optimal relevance without compromising privacy or efficiency.
However, it will be vital for publishers to ensure their content provides a value for readers, so they can build a strong relationship with their audiences. Only then will publishers have the means to adapt their monetisation mix to include options such as paywalls for anonymised or ad-free browsing – which will help them expand revenue sources and improve their ability to drive long-term yield. Stepping into the subscription sphere might seem daunting, but there is evidence to prove it can boost income and maintain brand integrity – see, for example, The Telegraph’s achievement of 522,000 paying subscribers in 2020, resulting in total profits of £14.3m. Similarly, carefully selected e-commerce collaborations can drive extra value for audiences and publishers: as demonstrated by the likes of Buzzfeed, shoppable content and online stores can enrich the user experience, as well as bring in valuable revenue.
While the exact shape of the future consent economy isn’t yet clear, we can be certain there will be significant changes – and the industry has the power to wield these changes for universal good.
Prioritising value-centric relationships and flexibility is crucial for brands and publishers. Alongside direct dealing solutions that ensure publishers and brands keep charge of their data, consistent efficiency will call for a greater reliance on a mix of first-party and non-personal contextual insight, as well as diverse revenue drivers. By implementing versatile targeting and monetisation that can adjust to whichever consent option audiences choose, the ecosystem can continue to prosper in a consent-first, privacy-secure manner.