In January 2020, Google announced plans to eliminate third-party cookies, heralding a massive shake-up for digital advertising and the internet itself. The end of these cookies promises the golden age of digital marketing, where the internet becomes privacy-first.
At first glance, this update seems to be a step in the right direction, and in many ways, it is. That’s not to say Google’s motives are pure, though. Banning third-party cookies positions Google a step ahead and strips power from competitors, further solidifying its control over digital advertising. The company is essentially handicapping competitors by limiting access to data under the guise of a user-first, privacy-focused update.
Banning cookies will have a lasting effect on many publishers, although not all will be affected equally. Publishers relying on programmatic advertising served through third-party ad servers, like Google Ad Manager, will be impacted dramatically. Ad exchangers, demand-side platforms and advertisers can access cookie data in real time and then use that information to determine how much to bid on inventory. Without third-party data to augment the value of their inventory, traditional publishers can expect their programmatic eCPMs (expected revenue per thousand impressions) to decline, leading to a substantial drop in ad revenue.
So how can publishers win back their ad revenue? Whatever happens next, digital advertising won’t be as simple as it is now, and publishers will soon be forced to rethink their ad strategies and implement new solutions that will enable ad monetization.
First-party data is going to become immensely valuable, and publishers must start identifying how they can harness and monetize it.
Unified IDs are unsustainable in the long term
Publishers will need to be aware of this drastic shift in digital advertising and find alternatives in order to maintain their ad revenue. One potential path is a unified ID solution, where publishers pool together first-party data in an anonymized way, creating an ID that can identify users across the supply chain. This “cookie-less” solution, for example, could use anonymized email addresses to replace third-party data.
Many companies are already building unified ID programs, such as TradeDesk’s Unified ID 2.0. Prebid, an open source header bidding platform, has already announced it will support it. Unified ID 2.0 is just one of many on the market, each slightly different in terms of functionality, implementation and privacy.
Google recently announced its own form of unified ID, which helps publishers who use Google Ad Manager. Through publisher-provided identifiers (PPIDs), publishers can share first-party data in an anonymized way with outside bidders. This seems to be Google’s middle ground to protecting privacy while not alienating advertisers and publishers. The publishers will, of course, have to hand over their first-party data, so Google is once again left with an abundance of data it could potentially use.