Should We End The Quest To Replace The Cookie?

Mannheim, Baden Württemberg / Germany 07 12 2019 Apple iPhone XS Display with
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The advertising and marketing industries have paid close attention to the inevitable phasing out of cookies by Google on Chrome. One advertiser believes we ought to develop the new online advertising ecosystem around multiple, flexible solutions, post-cookieless Google.

By Georgia Brammer, regional director JAPAC at Flashtalking

Google is no stranger to the industry spotlight.

Long before the Australian Competition and Consumer Commission (ACCC) raised concerns over market dominance, and new laws forcing the digital platforms to pay publishers for content hit the news, the tech giant was making global headlines for its decision to stop supporting one of digital advertising’s key founding blocks.

We’re talking, of course, about third-party cookies. When Google announced plans to phase out the go-to audience tracking and identity resolution tool, it sparked frenzied discussions about what would replace it.

Despite numerous innovative efforts to build the next universal ID, and some positive progress, the industry still hasn’t found the one-size-fits all alternative.

But is it realistic—or even useful—to expect such a solution? Perhaps the only sustainable way forward lies with taking stock of the identity landscape and re-calibrating the ecosystem around multiple, flexible solutions?

The identity crisis: where we are now

First and foremost, it’s important to review today’s identity situation. To meet demand for a speedy alternative, tech players have pushed production into overdrive and built an array of replacements; each one coming with its own mix of smart capabilities, as well as potential challenges.

Too many to explore all at once, here are the three most talked about cookie alternatives:

Email-based IDs 

IDs come in many shapes and sizes—including authenticated traffic solutions, open-source unified ID frameworks, and cross-industry technical standards—but most work on the same overall principle.

Publishers supply consented user data, typically first-party email addresses collected during site registration, which is then hashed or encrypted to enable matching with the vendor’s ID and allow for targeted advertising across partner platforms.

The simplicity and accuracy of this approach work strongly in its favour, but there are possible issues that shouldn’t be overlooked. For example, browsers and regulators may feel the consent users give for publishers to access their email address isn’t enough to give the green light for use by other ad tech players, even if data is hashed.

For instance, Apple has explicitly stated that this won’t fly after its iOS 14 update: in-app tracking can only take place if users give permission via its AppTrackingTransparency framework. Google has also said that won’t support email identifiers as a way of tracking users.

Additionally, scale is a core consideration. Ultimately, these solutions are reliant on users to register with or log into publisher sites and give consent to access their data—and that could mean limited access.

Currently it is estimated only around 5 per cent of open web traffic is logged in, leaving 95 per cent of traffic outside the reach of monetisation and targeting.

ID graphs

Often vital to email-centric user authentication, ID graphs work in a similar way. Companies provide first-party data that is combined with the tech platform’s proprietary personally identifiable (PII) data to run privacy-safe, private mapping that can be resolved into a master user ID.

This involves data such as logins, emails, and phone numbers, as well as information from customer relationship management systems (CRMS) and on-site behavioural data.

Much like email-powered IDs, a heavy focus on deterministic data increases the chances of reliable information and precise audience matches. This dependence on PII, however, might also mean platforms face the same hurdles with data scope and compliance.

Ensuring high levels of incoming data will call for equally high consumer trust that enables publishers and businesses to gain consent for clearly outlined processing purposes.

Clean Rooms

This solution is being championed as a way for digital forces to tackle the challenge of scale by pooling data resources, safely. The idea is that advertisers, publishers and vendors can upload their first-party data into collective systems where it can be synced and connected to enable identification and measurement.

Main concerns for clean rooms revolve around what happens to the data contained within them and who holds the keys.

Google’s Ads Data Hub, for example, aims to ensure privacy by stipulating that data can only be analysed and matched within the environment; meaning users must effectively relinquish control of their data to a black box.

New decentralised clean rooms might offer a better balance between security: allowing data owners to keep hold of the keys, and giving select parties permission to analyse anonymised data.

But such options require a leap of faith from businesses about making their data available and collaborating with others, potentially even those they consider to be their competitors.

Why we should be calling off the search 

On balance, current options have an even spread of plus points and possible issues to tackle. But the real question for the industry isn’t about determining which one will offer the best alternative; attention should be focused on whether to crown a successor at all.

There are many reasons why adopting another ruling ID solution isn’t the wisest move. For starters, it’s likely to mean giving already dominant players even more power.

See, for example, research showing that despite using multiple ID solutions—up to four at any given time—most advertisers and agencies (29 per cent) name Google as their primary ID choice.

Then comes the most important lesson from third-party cookie deprecation: setting a single default solution doesn’t fit with the fluid nature of digital advertising.

From tech advances to fresh data regulation and browser privacy policies, there are always changes on the horizon that drive ongoing evolution. Framing systems around just one tool restricts the ability to adapt as changes emerge; not to mention raising the risk of sizeable disruption with every shift.

To future-proof success, what’s needed is a break from the dependency cycle. Instead of switching tools, the ecosystem must move to an independent and ID-agnostic approach, where diverse solutions are used in tandem to maintain agility, openness, and performance.

By embracing tech that can support multiple IDs, quickly adapt to each new solution and draw on various sources of first-party data, buyers and sellers can achieve sustainable agility.

Even more crucially, prioritising interoperability and independence will also reduce the power of tech giants to set and change the industry dynamic, whenever it suits them.

This article was written by Georgia Brammer, the regional director JAPAC at Flashtalking.

Featured image source: iStock/EnDyk

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