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The Post-Cookie Era

By Declan Murray

March 26, 2021

Background

There is a lot of discussion in the ad tech industry at the moment about ‘The Post-Cookie Era’, and the effect this will have on the digital advertising world. Broadly speaking, when we talk about the Post-Cookie Era, we are referring to the fact that Google Chrome will soon start blocking third-party cookies.

At the moment, Firefox and Safari are already doing this, but Google Chrome is by far the biggest browser in the world, accounting for over 60% of all impressions. This means that once Google Chrome blocks them too, the era of third-party cookies will be over.

In EXADS we have been preparing ourselves for this change for some time, to ensure that our service continues to perform just as effectively, without any difficulties for our customers. However, it's worth preparing yourself by thinking about strategies you can use to navigate this new era.

What are Third-Party Cookies?

First-Party Cookies	Third-Party Cookies
Set on the Publisher’s web server.	Set by a third-party server, such as EXADS.
Can only be accessed from the domain that created it.	Can be accessed from any site that loads the third-party code.

To understand what this change will mean, let's look at the different types of cookies:

First-party cookies are stored by the website that a user visits directly. These allow the website owner to collect analytics data, and remember things like language settings and what items were added to a user’s cart. They help to provide a good user experience. They are NOT affected by the changes to Google Chrome.
Third-party cookies are created by other domains that the user does not visit directly. They are used for functions such as retargeting, frequency capping, and conversion tracking.

So as you can see, third-party cookies are a pretty important part of the ad tech industry, and a lot of people are understandably worried about what blocking them will mean. This article will cover:

How these changes will affect EXADS and its products specifically.
The key impacts this change will have on the ad tech industry.
The strategies that Advertisers and Publishers in the ad tech industry can use to navigate this new way of doing business.

What This Means for EXADS

The Post-Cookie Era will have some implications for Advertisers and Publishers on our platform. Let’s have a look at some of them.

Frequency Capping

From the Publisher’s perspective, frequency capping will continue to function as normal. This is because we are not using third-party cookies to do it.

Publishers

If the Publisher’s domain is 'examplesite.com'. We have them load our Javascript snippet, which sets the frequency capping cookie for use on their 'examplesite.com' domain, which means that it is a first-party cookie and thus is not blocked by the new changes.

If it is done in this way, the 'examplesite.com' site knows that something was already shown there for the purposes of frequency capping and EXADS does not. The frequency capping happens on their front end.

Advertisers

When an Advertiser sets frequency capping limits, we will use what we do know about users (such as their IP, browser, system, etc.) to identify them in the absence of third-party cookies.

Contextual Targeting

For Advertisers, the EXADS Admin Panel gives you a comprehensive toolbox of targeting options in Step 3: Targeting of creating a campaign. In the Post-Cookie Era, these tools will become even more relevant to Advertisers. They will want to ensure they use tools like keyword targeting to get their ads to show on relevant sites.

Conversion Tracking

You can use two methods of Conversion Tracking of user activity to help measure the performance of your campaigns: Pixel Tracking and Conversion Tracking API - S2S. Pixel tracking is based on third-party cookies, and so it will be impacted by the changes. We will use what we do know about users (such as their IP, browser, system, etc.) instead of third-party cookies to do this. We recommend using the S2S tracking going forward.

Effect on the Ad Tech Industry

The decline of third-party cookies could have several effects on the ad tech industry. When only first-party cookies can be used, this will affect some primary functions of ad-serving, which in turn will have many unpredictable secondary impacts on the industry.

Primary Impacts

The primary impacts of removing third-party cookies will be:

Frequency Capping: Currently, in many areas of the ad tech industry, Frequency Capping (the ability for Advertisers/Publishers to set limits on how often a user sees an ad) is mostly based on third-party cookies. Once the new changes come in, it will not be able to function as before. As we have seen above, EXADS Frequency Capping will continue to behave as before.
Targeting: It will no longer be possible to target users based on third-party cookies.
Retargeting/Conversion Tracking: Conversion tracking and retargeting based on third-party cookies will no longer be possible.

Secondary Impacts

With frequency capping, targeting, and conversion tracking/retargeting impacted by the demise of third-party cookies, there are many potential ways that this could affect the ad tech industry as a whole. Of course, these are speculative and not all of them may affect users of EXADS.

Move to First-Party Cookies

Obviously, with these changes, there will be an increasing reliance on first-party cookies, as the major remaining way to collect user data, and thus target them more effectively. Publishers will increasingly focus on using first-party cookies to segment their users, to be able to offer better-targeted ads to Advertisers.

Proprietary Platforms / Walled Gardens

As part of the move to first-party cookies, Advertisers could increasingly move away from the open internet to advertise on proprietary platforms or ‘walled gardens’ (Such as Facebook), as those services can use first-party cookies that allow Advertisers to target ads precisely within their system.

This could lead to more proprietary platforms being created and more Advertisers moving towards them. However, these platforms would have the ability to restrict and control their Advertisers, which could be a disadvantage for them compared to the open internet.

Increased In-App Advertising

As the third-party cookies ban will only affect websites, Advertisers may increasingly move to in-app advertising, where users can still be identified by various other methods.

Increased Contextual Targeting

Without frequency capping and retargeting to rely on, Advertisers may become more selective about where they place their ads, to ensure their effectiveness. They could make more use of contextual targeting and keywords for example - to make sure their ads only show on very relevant sites. This could lead to less revenue for some Publishers, especially those with a more generic or mainstream focus.

For example, while previously an Advertiser might have used third-party cookies to show an ad about weight loss products to a user who had bought weighing scales recently, in the new era they might target a user who is currently reading an article about dieting.

Pricing Models

The CPM price when users of websites are unidentified (i.e. not using third-party cookies) could be significantly lower, which will mean less revenue for Publishers.

Advertisers may become more interested in using CPC and CPA pricing models, as these don’t require them to have much control over frequency capping, which depends on third-party cookies.

Navigating the Post-Cookie Era

Understandably, some people in the ad tech industry are worried about what these changes will mean, and there is some talk of the ‘Cookiepocalypse’ over the horizon, but there’s no need to get too worried about this. As with any change, there will be a period of adjustment, and there are things we can all do now to get ready for the Post-Cookie Era. Again, not all of these things will apply to users of EXADS.

Focus on First-Party Cookies

The loss of third-party cookies will mean that first-party cookies will become the main way of knowing about your users. There is still a lot we can learn about our users using first-party cookies, which can enable us to target them more effectively.

Look into Direct Deals

As discussed above, Advertisers will become increasingly interested in partnering directly with Publishers, especially if they can promise them that they have segmented their users well. Publishers should think about integration with Advertiser’s DSP.

Revisit Contextual Targeting

With the demise of third-party cookies, people in the ad tech industry will revisit good old-fashioned contextual targeting. This will involve more proactive targeting to enable ads to show only on sites with some relevance.

ID Solutions

Third-Party Cookies provided a way to identify users based on their previous activity on the web. Once the ad tech industry moves away from them, there will be a move towards any methods which allow us to know who a user is, and thus build up a picture of them.

Using what you know about a user (IP address, browser, system etc.) to identify them, instead of third-party cookies. This method does not necessarily identify the user perfectly, as multiple users could have similar details, but it is enough to allow reasonably effective retargeting.
Some form of universal identifier could be developed across the ad tech industry based on a combination of first-party cookies and the email address/phone number of the user. Something similar to this has emerged in some European countries such as Germany, where there has been an attempt to create ‘login unions’ across different publishers.

Summary

So as we’ve seen, though the end of third-party cookies will be a major change for the ad tech industry and for EXADS, it will not be the ‘Cookiepocalypse’ that some are predicting.

It will be a chance for us to step back, take a breath, and reconsider the strategies that are used to match ads to users. Ultimately, this change is happening due to some welcome changes in attitudes to user privacy.

Innovative, adaptable companies will be able to navigate this change without too much difficulty, and new tools and standards may well emerge to meet the needs of this new way of doing business.

For now, the best thing to do is keep abreast of these changes and their implications and start getting ready for the new era.