As we read the tea leaves for digital advertising in 2024, I’m going to (mostly) skip artificial intelligence and talk about something more immediately urgent: the deprecation of third-party cookies.
I get it—it’s far more exciting to talk about the dizzying possibilities of AI than third-party cookies, which have risen and fallen off the industry’s agenda depending on how recently Google kicked the can down the road. But make no mistake, when the day comes, it’s going to be carnage for any advertiser who has not prepared.
Why do I single out advertisers? Because from what I’ve seen, media owners are ahead of the curve in replacing infrastructure that’s reliant on third-party cookies. Many brands and agencies, meanwhile, have been dragging their heels, sticking with what works now over driving long-term change. But whether in mid-2024 or into early 2025, the legwork to prepare for the end of third-party cookies will have to take place in 2024.
There is still time to get ready, and below are my recommendations for how advertisers can prepare for the “cookiepocalypse.”
Explore The Bustling, Though Confusing, Identity Market
A silver lining of Google’s delays is the time it’s allowed for a range of alternative identifiers to emerge. These can be broadly categorized as probabilistic, where the ID is built algorithmically from a range of signals, or deterministic, where a hashed email address or phone number is used as the basis for the ID.
The downside is trying to select a solution from the crowded ID market. While there has been a concerted effort for interoperability between IDs, the lack of standardization will continue to be a barrier for advertisers in an ecosystem where each media owner uses a different ID. Expect to see a wave of consolidation in 2024 as ID adoption increases and reveals which solutions are the most reliable, scalable and performant.
The Trade Desk will likely take the biggest slice of Google’s pie through its open-source Unified ID 2.0 (UID2), which overcomes deterministic’s usual scale barriers through its sheer scale and cross-device, cross-channel capabilities. Giants such as Amazon Web Services, Warner Bros. Discovery, and Walmart have already incorporated UID2 into their digital platforms, and we can expect it to continue to proliferate across walled gardens, websites and connected TV platforms in 2024.
Tap Into Digital Publishers’ Rich, Detailed First-Party Audiences
Digital publishers have been the first movers in cookie-free targeting and audience segmentation. Many premium publishers now offer robust media planning, buying and measurement platforms, with many more on the way in 2024.
Such capabilities are enabled by the widespread collection and activation of first-party data, which has become gold dust in the privacy-first world and will only be more valuable post-cookie. Through registration and subscription schemes, publishers have gathered the email addresses required for unified ID integration, while content consumption patterns offer insightful data for audience building.
Advertisers frustrated by the increasingly signal-deprived open programmatic ecosystem can tap into publisher audiences through curated marketplaces or direct deals. Those who want to stick to open programmatic should support seller-defined audiences (SDA), the Interactive Advertising Bureau initiative that leverages publisher first-party data to make targetable audiences available for bidding without the need for additional IDs.
Uptake for SDA has been slow among advertisers, who cite data quality and transparency concerns, which is odd given that cookie-based open programmatic has these very same issues—if not worse. It seems more likely that advertisers are simply clinging to what works now, but that won’t be an option for long.
Leverage Retail Media’s Access To Consumers, But Be Wary Of Reliance
Retail media will continue to secure its status as a new advertising heavyweight in 2024. Like publishers, retailers such as Amazon, Walmart and Target have capitalized on the first-party data gold rush to launch advertising platforms that grant access to their exclusive audiences. This is especially valuable for consumer packaged goods brands that have few avenues, if any, to gain first-party data of their own.
Judging by moves in 2023 to incorporate ID solutions and make their audiences accessible to select partners through data collaboration platforms such as clean rooms, we can assume that retail media’s next big play will be off-site targeting. By extending its reach to other platforms and channels, retail media’s scale may soon rival the Google/Meta duopoly, giving advertisers a new mainstream option to diversify their media spend.
However, advertisers must treat retail media like any other walled garden and not become reliant on a platform where they have limited control or access to data. Retail media is also ideally situated to skew toward last-click bias, and retailers’ control over the pipeline from advertising to sales risks participation becoming more a cost of doing business rather than an opportunity for expanding market share.
Skip Cookies And IDs Entirely With Contextual Advertising
While the industry has been scrambling to find a replacement for third-party cookies, contextual advertising—which works without any identity framework—has gone from strength to strength. Contextual advertising is nothing new, but AI-powered semantic understanding and image classification have automated a process that once relied on laborious tagging or clumsy keyword filtering.
As this technology matures to enable features such as addressable audience targeting and overlaps with meaningful emerging metrics such as attention, advertisers gain access to an enormous volume of biddable inventory without having to bring anything to the table other than a target audience.
Contextual can serve as a wholesale solution for addressable, targeted campaigns. Behavioral and interest-based targeting will remain relevant—Google itself is banking on this with Topics—but contextual is a relatively plug-and-play option. In fact, contextual is ideally suited to work in tandem with behavioral advertising by targeting consumers that the latter cannot reach.
Advertisers have plenty to look forward to in the post-cookie world and, as we go into the new year, should embrace opportunities and excitement over sticking to a status quo that’s running out of time. Third-party cookies were a crutch for far too long, and we will all be better off without them.
