Future of advertising

How Will Retargeting Work without 3rd Party Cookies?

In this article you will learn:

  • What is happening in the environment of ads based on 3rd party cookies?
  • Will it be possible to use 1st party data without the possibility of using 3rd party cookies in the future?
  • What are the biggest challenges for marketers in the future cookieless reality?
  • What is the industry approach to these changes?

In January 2020, Google announced that it will end support for third-party tracking cookies in the Google Chrome browser “within two years”. In June 2021, this timeline was extended to 2023.

 Other browsers, such as Safari, Firefox, and Edge, have already stopped supporting 3rd party cookies, but from the marketer’s point of view, the fact that Google will also follow this trend is important due to Chrome’s over 60% market share.

Cookies were designed to give personalized settings for internet web users and have been used in advertising, to identify consumers and target advertising to the relevant audience. Relevant advertising is crucial in providing tailored experiences to consumers. 3rd party cookies have become a key piece of technology for ad tech vendors to be able to support most common advertising use cases.

One of the crucial parts in marketers’ strategy and frequently used advertising use cases is to target users from the bottom part of the sales funnel. It’s called retargeting and is purely based on the advertiser’s 1st party data.

The possibility of cross-site audience identification is based on 3rd party cookies.

It means that to participate in the auction, to bid for the user, and then as an implication – display an ad, a 3rd party cookie is essential. This solution will not be supported after the changes in 2023.

Will it be possible to use 1st party data without the possibility of using 3rd party cookies in the future?

YES.

3rd party cookies will indeed not be supported, however, these cookies are just a marker allowing advertisers to use their 1st party data for targeting the right audience and serve relevant ads. As we are involved in the process of the changes from the very beginning, we are able to explain what the two – most popular – approaches to the cookieless world are about.

Let’s start with an approach fully supported by leading browsers like Chrome and Edge – privacy-preserving marketing APIs aiming to keep advertising use cases while giving privacy guarantees to internet users. We would like to start with this particular approach because potentially this is more scalable – just from the fact that they will be officially supported by browsers

  • Granular 1st party advertiser’s data (event level) will remain the same as we know and understand today.
  • Based on this data, technology vendors will have to create user groups, with similar characteristics – as identification has been assigned to a particular user, now identification will be implemented to a group of users.
  • Information about the group, where the user is assigned to, will be stored on the user’s device.
  • Within each campaign we select interest groups, so the recommendation engine is personalizing ads based on the advertiser’s data.
  • During the auction – on the publisher’s website – auction participants will be able to bid for users from groups, which are important to the advertisers they are representing.

How are the main challenges of this approach addressed?

The two biggest challenges that had to be addressed are the creation of personalized ads for a group of users  – and the ability of precise estimation of users’ value within the groups.

 To address the problem of personalized ads for a group of users, RTB House has introduced Product-level TURTLEDOVE which was fully implemented (with no changes), and now is an integral part of Google Chrome’s vision for the future solution. PLTD (Product-level Turtledove) is allowing marketers to:

  • display relevant product recommendations,
  • dynamically optimize creatives
  • preserve the personalization user experience in ads – almost mirroring the current state

 To address the problem of the ability of precise estimation of users’ value within the groups, RTB House has introduced Outcome-based TURTLEDOVE which also was fully implemented in Google’s proposal, and it is allowing marketers to:

  • expand the possibilities of bidding functions,
  • evaluate each user individually,
  • efficiently allocate marketing budgets,

This approach is keeping user-level bidding precision while maintaining interest group privacy guarantees.

If you have any questions or comments regarding the article, please let us know.