Why collaboration will play a big role in the cookieless future

Publishers and marketers are seeking to future-proof their businesses following another dynamic year in the digital landscape. Alongside making in-app tracking an opt-in choice for users, Apple has rolled out its Private Relay feature to ensure users’ IP addresses cannot be tracked. Google, meanwhile, has shifted its focus from FLoC to Topics to support privacy-compliant, interest-based ad targeting. 

So now that marketers and publishers have a little more breathing room to experiment with cookieless alternatives, how are they responding to this? 
 

Bottom lines are top of mind across the industry

Optimism is strong in the digital advertising industry, with over 80% of industry professionals saying they believe they are at least somewhat prepared for a world without third-party cookies. While this optimism currently unites both publishers and marketers, so does the expectation that the loss of third-party cookies will impact revenue. 

Two-fifths of marketers believe revenues will take a hit following cookie removal, with more than half of these predicting a 10-25% decline*. On the sell-side, three in seven publishers are expecting a drop in programmatic revenue, which could have the knock-on effect of workforce reductions. The primary cause of this change for publishers is that without cookies, there will be fierce competition to differentiate themselves and deliver unique value. 

With that being said, larger publishers currently own a competitive advantage. Many have access to significant pools of first-party data, particularly those that operate subscription models, and this represents a highly valuable asset in the cookieless future. However, smaller publishers will face challenges here as collecting enough data, monetising it, and making it attractive to marketers demands a lot of resources. Looking ahead, it will be critical for the industry to adopt solutions that work across the board. 

The identity market is heating up 

To sustain personalised advertising at scale, marketers and publishers are focused on identity to unlock workable alternatives to cookies - 42% of industry professionals have implemented or are actively testing identity solutions, while a further 41% have made plans to do this*. 

While Google’s revised retirement date for third-party cookies has offered the industry additional time to prepare, and over half of marketers and publishers welcome the delay, it shouldn’t be taken for granted. Less than one in 10 industry professionals claim testing identity solutions is their topmost priority, suggesting the urgency to find cookie replacements has dipped following Google’s announcement. 

Marketers and publishers must be proactive when it comes to adopting alternative targeting solutions, as having an optimal, privacy-compliant mix in place by 2023 will support their all-important connections with consumers. The identity market is increasingly saturated, so the industry should use Google’s valuable reprieve to select the solutions that best meet their requirements. For marketers to achieve the performance they need and for publishers to maintain diverse revenue streams, it will be necessary for them to adopt a portfolio of solutions. 

Collaboration holds the answer 

Both ad buyers and sellers are receptive to building an identity portfolio, with their end goal being to scale first-party data. There are a growing number of identity solutions available - from authenticated to probabilistic - and these serve different functions such as audience prospecting or boosting conversions. The more comprehensive the portfolio, the more coverage and scale industry professionals can achieve. 

Whilst three in five marketers see the necessity of multiple identity solutions, interoperability is a critical concern. Taking a transparent, accountable, and consent-based approach will be essential to future-proofing identity; for almost half (49%) of marketers and 63% of publishers*, data privacy is the key driver behind trialling identity solutions. By ensuring that these tools are interoperable, providers can enable industry professionals to harness the full potential of a diverse portfolio. 

If there is one certainty in digital advertising, it’s that change is inevitable. As seen with Google replacing FLoC with Topics, marketers and publishers occupy a dynamic landscape that shows no sign of slowing down. Having a compatible mix of identity solutions will help them sustain their businesses and remain agile in the face of change. To preserve their valuable relationships with consumers in a privacy-first way, they must now make the most of the time available to implement the best tools for the job.

* Research taken from Lotame’s study 'Beyond the Cookie: Identity Solution Adoption & Testing Among Marketers and Publishers'. Download it here.