Programmatic Display & Cookieless Targeting

Kyle Minerley

Get ready for a paradigm shift

The cookies are crumbling. Digital cookies, that is.

Earlier this year, Google announced they will phase out third-party cookies on their Chrome browser by 2022. Since Chrome accounts for about 70 percent of all desktop web traffic, more than double all other browsers put together, this is obviously a dramatic shift that will reverberate across the digital ecosystem.

Unsurprisingly, the “cookie apocalypse” has huge implications for programmatic.

How do cookies work for advertising, anyway?

A cookie is essentially a small text file that is used to follow users around the internet. Cookies are used for numerous purposes, one of which is targeting ads.

Whenever you access a website, that website uses a first-party cookie to track your movements within it. This is how a website, for example, shows you which hyperlinks you’ve already clicked or retains customization options you’ve selected. First-party cookies aren’t going anywhere.

The Chrome phase-out involves third-party cookies, which are placed by domains other than the domain the user is currently on, such as social media networks (e.g., when you click the “Like Us On Facebook” button on a website), live-chat popups, or advertising services. Third-party cookies have been (somewhat unfairly, since they generally don’t contain personally identifiable information) associated with privacy concerns, hence the pressure to phase them out.

How does this affect programmatic?

Fundamentally, programmatic is all about targeting people based on their characteristics and interests, and cookie-based targeting is a huge part of that effort because it allows us to infer personal information based on previous browsing behavior. If, for example, a particular user visits multiple finance-related websites, we can infer they are interested in finance. We use third-party cookies to gather that information.

In the current ecosystem, third-party cookies are all over the place, providing a wealth of this targeting information. The phase-out won’t completely eliminate third-party cookies, but it will cause them to expire after 24 hours, and 24 hours of browsing history is nowhere near enough information to target with the level of granularity we need to run an effective programmatic campaign. In short, one of the core ways we build programmatic audiences will disappear by 2022.

The third-party cookie phase-out will also impact attribution. When a user sees a programmatic ad, we use a cookie to track further impressions and conversions such as a Web purchase or contact form fill.

So, can you do programmatic advertising without cookies?

There is no simple solution to the third-party cookie phase-out. Instead, there will be a period of trial and error with some loss of granularity as we adapt to the new programmatic ecosystem.

The best-positioned companies are those that have already accumulated tons of personal data that can be used for targeting and attribution purposes, such as Facebook and (interestingly) Google. In addition, companies that have tangible, on-ground data that can be translated into audiences (such as the big credit card companies with their purchase data) will find that data in high demand.

While we can’t predict exactly how the world of programmatic will change, we do know programmatic will continue to be a core digital tactic, and we believe audio and video ads will grow in importance.

This is a developing change in the digital landscape and we continue to monitor it closely and ideate around solutions. The key: don’t panic. Work with a programmatic vendor you can trust to keep your campaigns afloat during even the most dramatic shifts.

* Denotes required field