The Identity Crisis: Third-party cookies and advertising

Written by
May 13, 2024

The need for greater transparency and control over how personal data is collected and used has driven significant changes in the world of advertising, from legal compliance through the GDPR and the CCPA to Google and Apple using their position of power to cause significant changes throughout the entire advertising supply chain. 

Google's long goodbye to third-party cookies and Apple's restrictions on cross-site and cross-app tracking necessitates that the digital advertising supply chain finds alternative solutions to identity. And as we prepare for the cookie drop in 2022, there has been a spawning of various new targeting solutions independent of cookie matching. 

A targeted approach

Identity or targeting partners are falling into two camps. Companies such as Google and Permutive have taken the approach not to identify an individual but rather, identify segments based on shared interests. While ID5, The Trade Desk's Unified ID Solution 2.0 and Liveramp use email hashing or fingerprinting methods to build alternative individual identifiers. 

The key difference here will be compliance and what that compliance will look like a year from now. The majority of advertising technology is based on third party data and passing single user identifiers, and both features are now under threat. ID solutions and fingerprinting may currently appear fine, but there is so much unknown regarding the future of privacy laws and regulations. 

The recent trial of FLoC (Federated Learning of Cohorts) by Google, a core part of its Privacy Sandbox project for Chrome, suggests that the segment-focussed approach of clustering large groups of people with similar interests could become the new gold standard. 

Putting publishers first

In a world of limited third party data, we expect to see advertisers return to high quality, curated contextual sites to ensure they reach the most relevant audiences. 

Publishers big and small can win here, with larger publishers leading in programmatic buys thanks to their abundance of first-party data, while smaller publishers can take their share through direct audience buys and programmatic, thanks to audience modelling, bolstered by their genre-specific content, which is ever favourable for ad targeting in this privacy-compliant world. 

In the absence of third party data, we will be relying on publishers, and platforms like Venatus Market, more than ever to make accurate assumptions about their visitors' likes and interests based on their content. 

Venatus' view

As a company that works directly with publishers and advertisers, we acknowledge the need for greater privacy and transparency within advertising while understanding that our advertisers need to measure return on ad spend and target the right audience. 

We will be taking a tailored approach and anticipate that we will need to work with various identity vendors to navigate through Apple and Google's approaches to privacy. Some of these vendors will become the de facto standard while others may fail. As we wait for more details on Google's Privacy Sandbox, it is impossible to select one single vendor until all the information is available.

Prioritising user experience

It is essential that, as an industry, we work together to protect the online user journey as we navigate into a more privacy complaint world. We must learn from the legacy left behind from the GDPR, which overlooked user experience in the roadmap to appear compliant.

Identity and privacy are vital to the industry's success, and so is user experience. Let's get it right this time and keep driving ad standards alongside privacy standards.