There’s a major change coming to digital advertising and it’s on the mind of every marketer. I’m, of course, talking about the demise of the third-party cookie.
Advertisers everywhere are understandably uncertain, if not scared, of what the cookieless future holds. And why not? — the cookie has been the mainstay of digital advertising for nearly 30 years.
But I’m here to tell you: there’s no reason to worry. In fact, the cratering of cookies is actually a good thing for marketers, consumers and digital advertising.
Here are five reasons why.
1. Cookies are an Outdated Technology
The third-party cookie is a relic of the 1990s. And even though that decade is going through a resurgence, cookies will not be coming back in fashion. One of the reasons is that they are not — and never were — built for the multi-device world we now live in.
But we’ll get to that in a moment.
When cookies arrived on the scene, digital advertising was in its infancy. Home computers were still emerging, and even though the internet was expanding rapidly, it was a much smaller place than it is today. With that in mind, marketers could count on — and design their campaigns around — internet users seeing an ad for a product and purchasing from a single location, i.e., their desktop computer. The third-party cookie thrived in this environment because it was easy to tie the ad directly to the conversion.
Let’s flash forward to the 21st century and look at an example of today’s typical ecommerce transaction.
You’re streaming your favorite show on your connected TV (CTV) and there’s a commercial break. The ad is for the latest fashion, a scrunchie reborn for the 21st century. You’re not going to buy the scrunchie from the TV, of course. Instead, you’ll have a device next to you, perhaps a mobile phone, tablet or laptop — that’s where you’ll make the purchase, or you may even purchase it in a physical brick-and-mortar store. Using the single-device conversion model of cookies, an advertiser would have no ability to understand if their CTV ad led to the purchase.
2. Cookies are Bad for Measurement
The example above illustrates that not only are cookies outdated, they’re also bad for measurement. In a recent video, I talk about this issue and share how measuring with third-party cookies is equivalent to hiring someone without looking at their resume or buying a house simply based on what the front door looks like.
Thankfully new technology allows marketers to evolve beyond the limited single-device conversion model of cookies. Using a people-based approach, advertisers can reach target audiences across their devices and understand what ad in the campaign led to purchasing.
Said another way: people-based advertising allows marketers to move into the 21st century and stop making multi-million-dollar decisions based on small data sets that don’t paint an accurate picture of how today’s consumers shop.
3. Cookies are Ineffective for Consumer Privacy Management
Cookies have been a nightmare for consumers regarding privacy and the customer experience. Most internet users have encountered the unfortunate ad that follows them around no matter where they go online. Even in today’s world that allows web users to opt out of third-party cookies, the same ad seems to find us.
Even if we opt out on one browser, the decision doesn’t translate to the many other devices we own as consumers.
For example, if I opt out of cookies when I’m using Chrome on my desktop, that opt-out doesn’t carry over if I then decide to use Microsoft Edge on the same device. The same goes with cookies within an in-web mobile device, or any other device I own that’s connected to the internet and allows third-party cookies. Consumers that want to opt out should be respected across all their devices, and cookies simply don’t make it easy.
4. Cookies are Bad for Reach and Frequency
Third-party cookies and single-device identifiers have long been ineffective for managing reach and frequency. Thus, marketers follow the trends and hope for the best as they split their ad budget amongst popular ad channels. This results in wasted ad dollars and consumer brand burnout from repeated exposure to the same ad.
The good news: the consumer experience doesn’t have to be like this.
Using the Viant Household ID (VHHID) in our omnichannel, people-based DSP Adelphic, marketers can reach target audiences across their devices in the household. By focusing on the consumer experience at this level, what we call “householding” at Viant, marketers receive a comprehensive view of behaviors and purchases made by all members of the household, whether at home or away from home, and control how often someone is exposed to their ad campaign.
5. Cookies are Not Ready for the Evolving Internet
Third party cookies have been on the decline for years. In fact, in the past 12 months, cookies presence in the open RTB bid stream have declined from 51% to 26%*. Google Chrome is the last real holdout, but those cookies will go away in 2023 when Google officially deprecates third party cookies.
The end of the third-party cookie is part of a more significant change happening online. Some call it Web 3.0. At Viant, we believe something bigger is happening — we’ve named it the New Open Web.
The New Open Web moves beyond cookies and presents an exciting new future of digital advertising. For marketers, the New Open Web provides the tools to create better, relevant ad experiences for their customers while reducing media waste and driving greater returns. Consumers also benefit by receiving less repetitive ads and more of the privacy they want and deserve.
The rise of NFTs, blockchain and the metaverse over the past year prove the New Open Web is not the future — it’s the now. These developments also highlight how consumers are driving the change away from an internet dominated by cookies and a few companies.
By partnering with Viant and leveraging our people-based software, marketers can reach today’s evolving without cookies and make the most of the New Open Web.