With cookies extinction delayed again, how should advertisers approach alternatives?

Google's decision to introduce another delay in ending third-party cookies in advertising, pushing back the deadline to 2024, means advertisers have been given more time to test demand-side and ad buying platforms that offer cookieless solutions. 

It is not a major surprise that the industry is not prepared, as many had placed the issue on the back burner following Google's first delay to phase out third-party cookies. 

A study by Twilio found that 81% of companies are substantially dependent on third-party cookies, and 55% were not fully prepared to function in a world without cookies. In addition, 42% predict that the impending changes will lead to a lower return on investment in ad spending and decrease the ability to measure campaign efficiency. 

Some of these cookieless solutions which aim to solve privacy, trust and control that are being tested are The Trade Desk's Unified ID 2.0, which we examined in greater detail in a previous article, and Yahoo's Next-Gen Solutions and ConnectID, which we will focus on here. ConnectID is Yahoo's direct consumer identity solution, which covers its entire ad stack of ad exchange, ad-buying platform and DSP. 

For its Next-Gen Solutions, it builds on the 900 million unique people Yahoo knows through ConnectID and adds programmatic data signals, which include everything from the operating system, device type, and the weather. 

Dan Richardson

"Imagine these are ingredients in a purple blender. You have got the known from Connect ID, the single programmatic signals, contextual targeting is significant. We model that into our algorithm and can infer people's age, gender and interest in real-time. The critical thing is it is already live across the web and app," Dan Richardson, head of data for APAC at Yahoo, tells Campaign Asia-Pacific.

"The only thing that comes near our solutions is the other proposed sandbox solutions, such as Topics API, which are not limited to a single browser. It also does not store any user-level data as it does not fingerprint or track people around the internet, which people are aware of and scared of. It's helping our ecosystem at Yahoo to power marketing across all channels. That includes digital out-of-home and connected TV. We are very inventory agnostic." 

The view from the industry

Chris Brinkworth, the managing partner at Civic Data, a media consultancy, points out it is important to remember that we are already in a world without cookies and app data, as any business that has relied on tracking within Safari or iOS no longer can.    

With the pushback of Chrome's deadline, he says advertisers--even when just testing solutions like Yahoo's ConnectID--will start to see how to reclaim targeting and measurement options that they have already lost and will soon fail. 

However, he warns advertisers and publishers must focus on their own 'owned identity' (addressable) assets and the related consent attached to how that identity and data can be used. 

Chris Brinkworth

"We are in this situation today because too many in the ecosystem relied on too few solutions. We are, in effect, 'trapped to big tech's data' and need to test," Brinkworth explains to Campaign Asia-Pacific.

"If your business has its identity resolution solution, has clean data as an asset class, with consent secured. Then, you can start doing much more with Yahoo's ConnectID while owning more of your business's destiny regarding reliance. On the other hand, if you do not have that identity data yet, then Civic Data sees solutions like Yahoo's Next-Gen Solutions that use inferred modelling as a significant first step to testing new targeting methods." 

As consumers want advertisers to use only first-party data when creating personalised services, solutions like Unified ID 2.0 and ConnectID will help increase monetisation opportunities for publishers and offer optimisation from the information that is still available. 

However, whether it will be 'sufficient' or 'enough' is an entirely another question, says media veteran Fionn Hyndman, partner at Asia Pacific Growth Management. Hyndman, who previously worked at Blis and Dentsu, says the industry needs to accept that consumers do not understand what they want.  

He argues they have been "sold a lie" regarding what cookies are, what they do and how the internet works, and it sounds scary for them. 

For example, he says there are questions like, "Do you want to be tracked all over the internet? Do you want to see more relevant advertising? Do you want brands to be able to see what you do online? Do you want to pay for the publisher content you get for free? If a brand would pay for the publisher you use in exchange for knowing you were the parent of a nappy-wearing child but knowing nothing else about you, would that be, ok?"

"Consumers need to understand that brands want to know more about who they are and what they want than they want to know that I am Fionn Hyndman, and I live in Pandan Valley in Singapore. It is not like digital publishing was a straightforward life choice before these changes, which just takes the shine off.  The environment is incredibly challenging, so I expect it to get worse," he tells Campaign Asia-Pacific.

Are Yahoo's Next-Gen Solutions and ConnectID the real deal?

Advertisers who still rely on cookies for targeting and tracking just Safari and IOS users, using Yahoo's Next-Gen Solutions and ConnectID, expect an immediate improvement in CPA just to target Safari and IOS users. 

However, it does not mean that their sales will go 'up' immediately, warns Brinkworth. 

"You will better understand how you found those sales and what works. From there, you can start to improve because now you are getting a better visibility/measurement of your activity and targeting," he explains. 

"If anything, you will start to see that, in actual effect – you may have been overpaying for some channels because you have not been tracking it properly, and there were other means of getting the same result that you just have not tested yet, because of the reliance on cookies." 

That said, Hyndman notes that compared to the ubiquitous cookie, he does not see any tracking, ID or targeting solution delivering better results than the cookie standard today. 

"I think Yahoo's solutions look like great and elegant solutions for a cookieless environment. However, I don't see them reaching more customers or more effectively than they are being targeted today unless I am missing something," he explains. 

When it comes to helping advertisers solve long-term strategic goals like entering new markets and user privacy, Brinkworth says if advertisers must rely on its owned first-party data and identity resolution assets, they must find partners and methods in markets where they do not have that scale yet.     

If solutions like Yahoo's are already in the market that offers reach, scale and opportunities trusted by your target, he says it's a no-brainer to test and partner with them while they start to grow their own in tandem when in a position to do so. 

"No one is an expert on this. The patchwork of regulations across regions and states can hinder and help solutions. For example, in Australia, some of the data currently used to 'determine' unauthenticated traffic may well be written into law as 'identifiers', despite not being so in other countries," he says. 

"From what Civic Data have seen of Yahoo's solutions, however, they have an excellent mix of options that (should rules and laws change) will still allow advertisers to test and grow more intelligent targeting without getting into regulatory trouble." 

Fionn Hyndman

On the other hand, Hyndman argues Yahoo's products look like great solutions that will solve problems for advertisers and says this is a marketing statement as he does not see why they would solve any more problems than Yahoo has been able to serve previously.   

He explains this is because Yahoo had always tried to have a unified stack - even before they were called piles - that offered cross-border solutions. So its Next-Gen Solutions and ConnectID would not significantly change from what has been provided. 

"Yahoo's solutions solve the privacy problem in that it seems to comply with all legislation regarding tracking consumers and targeting them on networks. But it does not solve the problem that if people think you are tracking them, they may have an irrational response to the free services you provide being paid for by their data." 

Will Yahoo's Next-Gen Solutions and ConnectID ultimately replace cookies?

From the problems attached to larger tech companies controlling cookies, browsers and the data within their business, we have seen that to be an industry standard. Platforms must allow for any partners to be invited to collaborate without restriction or bias in the future.   

It must be a privacy complaint but also stand up to anti-competitive scrutiny, which is what Google has been trying to do with Sandbox, but as it is not quite there yet, it has had to push back the cookie deadline. 

Brinkworth points out that many people are also concerned about what Apple will do with the data they have shut off from the industry. If solutions want to be part of an industry standard, he says they need to find ways to allow and adhere to that interoperability.      

For example, from a 'data clean room' perspective, he says platforms have to be able to include any partner id graphs, log level data such as transactions, ad logs and conversions, a wide range of data models, and containerised code and mapping files etc. Platforms should never dictate who and why advertisers can work with partners in that same ecosystem. 

We also expect more prominent brands and agencies to have several data-clean-room partnerships for the foreseeable future. We advise our advertiser and publisher clients about building the 'intelligence across those multiple quasi-cleanrooms from Yahoo, Google, Facebook, Amazon etc.', while also testing their independent solution to work with partners outside media.
—Chris Brinkworth, Civic Data

Ultimately, Hyndman says while he does not see Yahoo's Next-Gen Solutions and ConnectID becoming an industry standard, its approach to a blend of ID-based solutions, look-alike profiles and contextual may become a standard approach.   

"At the moment, this is an excellent solution for Yahoo, and I believe it offers an elegant solution for the publishers who choose to work with them, but that is far from an industry standard," he says. 

"If every publisher integrated this and enforced a single sign-on with a ConnectID to all of their products, then, of course, all of the tracking and targeting issues we face would go. Still, the same could be said of any solutions from the duopoly or Unified ID 2.0."