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Adform prepares for a bright future without third-party cookies

Partner content: It is high time for advertisers to start migration to first-party IDs.

Google’s announcement that it would delay cookie deprecation on Chrome until mid-2023 was welcome news to the industry, as it provided more time to further develop cookie-less solutions. The unspoken truth, however, is that third-party cookies are already barely alive. Today, in most markets, more than 50 per cent of users are on devices, browsers, and channels that do not support third-party cookies. In addition, automated deletion means that cookies, on average, live for only about a week. Such limited availability and lifespan severely affect advertising activities such as audience segmentation, targeting, storytelling and analytics. Consequently, only half of your potential customer base are addressable via third-party cookies, and only within a limited time span. Adform’s in-depth analysis of third-party cookie dependency on common advertising platforms reveals a high dependency on cookies, with the unfortunate consequence that a huge gap exists – regardless of the Google Chrome deprecation delay. Approximately 60 per cent of all day-to-day ad tech features are dependent on third-party cookies across the typical tech stacks of any major brand. The combination of limited cookie support and huge dependency reveals that current ad tech stacks have a huge gap that urgently needs to be addressed.

A high number of adtech functions depend on third-party cookies for targeting, optimisation and reporting for use cases involving audiences, ad frequencies, and conversions. By contrast, a lot of important areas are unaffected, such as contextual, geo-segmentation, publisher placement and time scheduling. For marketers, the rule of thumb is to examine what does not work on Safari browsers when using their usual platforms.

Based on the exposure advertising ecosystems have to third-party cookies, it is high time for advertisers to start the migration, and to begin testing and optimising first-party IDs. Most martech platforms, such as web analytics and web content platforms, already operate entirely based on first-party cookies or identifiers such as email IDs, while virtually no adtech platforms have achieved this transition yet.

First-party solution deployment with global and regional publishers has had surprisingly rapid traction during 2020 and 2021, and first-party IDs and audiences now exist at the same scale as third-party cookies in most markets and on a few platforms.

Adform has been an early pioneer and now trades more media spend based on first-party IDs and data than on third-party cookies. The transition away from third-party cookies, to first-party IDs linked by a proprietary engine called Adform ID Fusion, has enabled a substitution of capabilities.

The rapid adoption of first-party IDs and data capabilities by publishers throughout 2020 and 2021 has again given marketers the possibility of targeting, optimisation, and measurement on Safari and Firefox, two browsers that have long since deprecated third-party cookies. Not only does this increase performance back to the levels of cookie-based environments, but it also provides even higher return on ad spend (ROAS). This can be expected to continue for some time until many more adtech platforms establish first-party support and integrations with publishers.

The average improvement when using first-party IDs and data from publishers is at least a two- to three-times increase in click-through rate and the same in conversion rate on media buying on Safari and Firefox. With these two browsers having a global mobile market share of 30-50 per cent, this represents a significant ROAS improvement opportunity for most marketers. While the low-hanging fruit of ROAS improvements justifies swift action, the strategic value in building independence from third-party cookies, and the gatekeepers of these such as Google, should not be forgotten.

The transition from third-party cookies from adtech and mar-tech intermediaries to first-party IDs, directly owned by the brands and publishers which customers trust, leads to an improved ecosystem on several fronts since it entails greater transparency, which can help to reduce fraud.

When first-party IDs from publishers and advertisers form the transactional backbone of the supply chain, impressions and data use will become fully traceable. This will increase transparency, helping resolve issues with discrepancies, accountability, hidden fees, arbitrage and ad fraud, and significantly decreasing the risk of data leakage.

Advertisers need to secure efficient and transparent data control. Adform and other industry leaders have been working to execute this substitution as the new industry standard. Meanwhile, some ID solutions or technology providers only promote and support their own first-party ID when in fact the real need of any brand is to have its technology foundation capable of working with all, or at least the wide majority of, ID providers. Adform can, for example, integrate with any proprietary ID in addition to all established ID solutions. In addition to this, Adform has solved the central challenge to link all IDs across publishers, and between brands and publishers, in order to maintain and improve data-driven use cases around marketing campaigns in the future.

www.adform.com

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