Digiday Media Research: A comprehensive guide to third-party cookie alternatives

Over the past decade, the third-party cookie has grown into one of the foundational elements of the digital advertising ecosystem. In two years, it will effectively be removed when Google ends its support of third-party cookies. How publishers respond to this change will be one of the defining stories of the media industry’s next two years.

But the paths forward are numerous, and few are well-paved. That’s why Digiday created this guide, available exclusively to Digiday+ members, which provides an overview of the possible responses publishers might take to the end of third-party cookies.

Get a taste of the guide below and subscribe to Digiday+ for full access.

Digiday Media Research: A comprehensive guide to third-party cookie alternatives

By Amina Asim

The Big Picture

In August 2019, publishers and advertisers panicked when Google claimed that after disabling third-party cookies “for the top 500 global publishers, average revenue in the treatment group decreased by 52%, with a 1 median per-publisher decline of 64%,” results determined through a randomized controlled experiment on publishers using Google Ad Manager’s programmatic services. More than 2 million publishers use AdSense to generate revenue from online advertising, indicating publishers’ dependence on a private though omnipresent company, a reality even more nerve wracking in light of Google’s now delayed deprecation of third-party cookies.

But looked at in a different light, publishers, who for the last decade or so have been relegated to the role of merely supplying audiences for big ad tech, suddenly have leverage. The publisher has become a primary source for any registered or consent-based data that can be used to target ads in compliance with new regulations. And all of that data is just the foundation on which publishers must build to keep up with advertiser demand.

Up to $10 billion of US publisher revenue could be at stake. Most non-premium publishers depend on ad targeting through third-party cookies for over 80% of their ad revenue, according to a McKinsey study. These industry changes have resulted in a focus on experimenting with first-party data strategies within the advertising ecosystem. This resource presents a catalog of first-party data alternatives and tools, some of which are available today to both publishers and advertisers, and some that are still being developed.

The regulatory backdrop

Google is not the only tech company to end support for third-party cookies, and it didn’t make that decision in a vacuum. Starting in 2018 with the enforcement of GDPR, a patchwork of anti-tracking and data privacy regulations have taken shape in Europe, the UK and individual states in the US. Regulators have become increasingly precise about acceptable use of user data for ad tracking, real-time-bidding methods and user consent. For instance, the UK Data Protection Authority ICO released guidance focused primarily on programmatic advertising practices in mid-2019. “Cookie compliance will be an increasing regulatory priority for the ICO in the future,” wrote Ali Shah, head of technology policy for the ICO.

Non-compliance faces large fines with a higher maximum amount of “£17.5 million or 4% of the total annual worldwide turnover in the preceding financial year, which can apply to failure to comply with any data protection principles, users’ individual rights or data transfers to other countries. A standard maximum fine of £8.7 million or 2% of annual worldwide turnover can be handed down not complying with provisions like administrative requirements of the legislation.