Writing exclusively for ExchangeWire, Richard Foster (pictured below), CRO of InfoSum, discusses how the digital advertising ecosystem can rebuild after the tectonic shift in the viability of the third-party cookie.

Proving that its privacy mission isn’t just talk, Google has taken its first major step towards blocking third-party cookies. In its latest policy update, Chrome 80 will stop supporting cross-site sharing, unless cookies are flagged in line with the SameSite internet standard.

On the surface, this move is about online security and clarity. As long as technology vendors and publishers label cookies accurately, tracking and targeted ads can keep running. But with semi-restricted cookie sharing now the default for those who fail to flag, it seems like this will be a sizeable nail in the cookie coffin.

Any advertisers, publishers and tech firms hoping for a slow two years before Google hits its deadline to phase out third-party cookies entirely had better sit up and take notice. The end is coming to the cookie at speed, and it’s time to start exploring sustainable privacy-first alternatives.

Looking beyond the cookie

Richard Foster, CRO, InfoSum

Google’s policy change is one of many recent blows to third-party cookies. Following its own announcement that tracking cookies will leave Chrome by 2022, the update also comes after a warning from the Information Commissioner’s Office (ICO) of tougher action against non-compliant personal data use in real-time bidding (RTB), including cookies. That’s not to mention multiple in-browser tracking restrictions in Safari, Edge, and Firefox.

While these growing pressures paint a bleak picture for the future of cookies, this doesn’t apply to digital advertising as a whole. It is true ad tech vendors will have reduced access to the data that has fuelled targeted ads for over 20 years. But tighter online privacy protection also encourages the industry to explore different ways of achieving ad relevance, using more compliant techniques and insight sources.

Making the first-party switch

The solution is first-party data. Information directly gathered from consumers is gaining popularity not only for being GDPR-compliant, but also because it offers an alternative to previous favoured methods, such as the DigiTrust shared ID. A positive step towards privacy-centric tracking, the unified ID was designed to allow secure online identification via anonymous central IDs, with minimal cookie matching. However, as advertisers and publishers still need third-party cookies to use these IDs, their value looks set to be increasingly limited.

Instead, there is huge scope for first-party data to fill the gap left by third-party cookies; providing deep audience insight that enables continued delivery of tailored, engaging ads. But there is also one key problem. With web giants such as Google, Facebook, and Amazon owning vast quantities of consumer data, the existing walled gardens could become bigger than ever before. Using rich consumer profiles at a people-based level, mega-platforms will offer unrivalled addressability, and in doing so, make it even harder for publishers to stand out. Unless, that is, publishers find a way to match the Goliaths on data diversity, and scale.

The joy of sharing assets

Many publishers already know the value direct audience insight holds in the post-cookie world. Some are enhancing first-party intelligence by asking visitors to log in to their sites; others are implementing paywalls that will ensure a similar boost to data capture from consenting subscribers. Although both measures will increase individual supply of high-quality consumer knowledge — and the ability to build ‘known’ audiences that appeal to advertisers — size will remain an issue when competing with dominant tech players.

Publishers must start prioritising long-term sustainability and harnessing shared assets. So far, concerns about potential data leakage and lack of trust have prevented several publishers from consolidating their knowledge, with several fearing that joining forces could also mean losing their competitive advantage. But if the open web is to keep thriving, they need to explore ways of securely yoking their collective data strength.

Sharing is caring

Fortunately, there are options for publishers keen to unite their first-party insight, but retain data control. Thanks to advances in decentralised, federated, systems, it is now possible to connect information contained in different datasets, without sharing the raw data. By moving the query, rather than first-party information, these systems keep data decentralised and produce mathematical representations of the collective insight store ready for aggregate analysis and privacy-safe, anonymised ID matching.

This means that publishers can expand their pools of first-party insight and offer wider targeted advertising opportunities and brands can get the best from their campaigns. All while remaining assured that their own data is secure from leaks and the risk of non-compliance.

There’s no running from the fact third-party cookies have finally been given their expiry date. Far from being the end of digital advertising, this development gives publishers and advertisers the chance to make healthier choices. By adopting secure data management methods, publishers can attain addressable advertising in the new era of data compliance and become newly-competitive industry players.