As Google begins phasing out third-party cookies in Chrome in January 2024, digital publishers face the increasingly growing urgency to ensure their steady ad revenue streams in the post-cookies era.
We all saw it coming, and now it’s happening. On January 4, 2024 Google rolled out the Tracking Protection functionality for 1%, hence officially beginning the global phase-out of third-party cookies in its Chrome browser.
The cookie phase-out has begun. Are we ready?
Quite predictably, this roll-out has evoked the other dozen of heated discussions between the analysts, industry pioneers and digital ad market leaders on whether the global online advertising ecosystem is ready for the new cookieless era in its history, and if not, what actions are yet to be done in order to overcome the potential massive challenges, related to it.
The survey results on the matter are also ambiguous.
On the negative side, according to Digiday reports, for instance, almost 60% of publishers express their worries about the possibilities to effectively measure ad performance on their digital properties, while over 75% of advertisers are also preoccupied with both the targeting and the measurement aspects of the cookieless ad landscape.
In addition, the McKinsey & Company research unveiled that digital publishers might risk losing up to the staggering 10,000,000,000 USD in revenue as a result of the curtailed ad personalization capabilities. And up to 40% of publishers (per Lotame) predict further workforce reductions in 2024 and beyond.
On the bright side, however, the above-mentioned Lotame research findings also reveal that almost 50% of publishers have already implemented alternative identity solutions, and over 85% of marketers in the U.S. express preparedness for the cookie phase-out (per PrimeAudience data).
So, while the jury is still out on if & how the existing alternatives can ensure the continued effectiveness of online advertising campaigns, it’s high time to recall and review the key touchpoints, worthy of publishers’ attention in 2024.
Publishers’ focus areas for 2024
Like it or not, but there’s no magic pill (or the top-3 practical hacks) that will help maintain the ad personalization levels as they were upon the complete deprecation of cookies in H3 2024 (or whenever it’s going to happen). However, the good news is that there is somewhat a to-do list of activities that should help minimize revenue loss risks at least:
- Testing/fix of the possible breakages upon the cookie switch-off. In brief, it’s vital to ensure that publishers’ digital properties work properly (i.e. load and display all editorial and advertising content flawlessly on all screens) without any third-party cookies available. And the sooner the simulation tests begin, the lower the revenue loss risks.
- Revision/improvement of first-party data strategies in order to acquire more audience data segments and activate them more effectively. In this respect, it’s equally crucial to evaluate a current subscription model and paywalling practices, as well as the quality of privacy-preserving environments a publisher is working with.
- Getting serious around the implementation of SDA. As the role of data clean rooms in the post-cookies world will grow bigger, so will the importance of seller-defined audiences, especially for publishers who monetize their inventory programmatically. So if you were reluctant to implement this IAB Tech Lab’s specification, 2024 is definitely the time to reconsider.
What about Google’s Privacy Sandbox implementation?
In the beginning of January 2024, IAB Tech Lab announced the early testing results of Google’s Protected Audiences API via the demo tool, provided to them by Index Exchange.
Namely, the team has expressed their concerns regarding the possibility (and effectiveness) of running online ads using the Privacy Sandbox APIs, which ranged from frequency capping and impression counting challenges, to the issues with precise competitive ad separation, brand safety and fraud, particularly in the premium, e.g. digital video ad segment.
In view of this, many analysts predict that the further testing results may force Google to implement timely enhancements in its Privacy Sandbox closer to the end of Q1 2024 and/or in Q2 2024.
More importantly, rumors are that Google may even postpone the full-scope deprecation of third-party cookies until they’re able to fix the most urgent issues, possibly found in the testing rounds. However, from what it looks like now, the global shift towards the Privacy Sandbox is seemingly inevitable, and sooner rather than later.
This is why, when it comes to the implementation of Privacy Sandbox, the most reasonable advice for 2024 is to deepen the publisher’s in-house analysis of its possible implementation and closely monitor news and updates in this respect. That is, of course, if their premium Demand partners aren’t enforcing the Sandbox APIs adoption, which will, obviously, push it to the top of the publisher’s priority list.