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What the death of the cookie means and why it's hurting your business

It’s no surprise to advertisers everywhere that Google's 2020 announcement to phase out third party cookies by 2023 broke the internet. While third-party cookies have already been blocked previously in Firefox and Safari, Chrome’s decision to ditch cookies hit harder since the search engine is confirmed to have a global market share of 67%. Despite Google’s 2021 attempt to introduce FLoC, (Federated Learning of Cohort) as an alternative data tracker, Google is still navigating the best ways to gather user data, while still respecting user privacy.

This year, Google announced “Topics” as a replacement to FLoC and cookies. Google’s Topics monitor users as they browse the web and records the topic categories they visit the most. After analyzing the data, Google then sends users ads based on the top five categories they interact with each week.

The concept behind Google’s Topics, though relatively new, touches on an underlying key player in modern day marketing: contextual advertising. While cookie tracking has for the most part turned into crumbs, contextual advertising is a standout approach to help advertisers continue to secure sales as cookies phase out. 

What the Death of the Cookie Means

Google’s decision to ditch cookies is relatively late in the game. Apple’s Intelligent Tracking Prevention (ITP) and Firefox’s Enhanced Tracking Protection (ETP) decided to block third party cookies by default back in 2017. At the time, this decision was only affecting approximately 30% of programmatic traffic. Google on the other hand, commands a 66% market share, meaning the decision to phase out cookies disproportionately affects a majority of businesses and how their advertising works. Essentially, this means a bulk of businesses advertisers are looking for the next generation solution to making their ads count. 

Why the Loss of Cookies is Hurting Your Business 

Statista research shows as of July 2021, 51% of U.S. marketers stated that third-party cookies were very important for their current marketing strategy as they made up a majority of the data their company uses. 

Since Google is one of the largest contributors to cookie data, the cookie phase out has the potential to leave a wide range of marketers without much precise data to work with, ultimately yielding a decrease in return on advertisement investments. 

How to comeback from cookie loss

At Precise TV, we value three pillars of successful digital advertising that thrive without cookie data:

  1. Contextual Targeting - the next generation of contextual targeting relies on predictive models rather than just keywords.
  2. Connected TV - CTV  has always been a cookie-less environment and leverages deterministic first party data.
  3. First Party Data - by combining our contextual data with first party data, Precise TV customers receive an unparalleled ROI.

I'm an advertiser - how can Next Generation contextual targeting  help?

Contextual Targeting has evolved rapidly and recent M&A activities such as Oracle's acquisition of Grapeshot for $400m, DoubleVerify's acquisition of Finnish contextual startup Leiki and Goldman sachs $75m investment in contextual platform GumGum show how demand from advertisers is fuelling growth in the sector. The fact of the matter is that video-level contextual targeting performs exceptionally well, and when you look at our recent WowWee case study you get further evidence of that. 

Predictive Contextual Targeting is using probabilistic data to establish an identity of a user without violating the privacy policies and without the use of cookies or personal identifiable information (PII). 

Traditional contextual marketing essentially uses what you’ve learned about the past, such as content taxonomy, to help you make decisions about the presence. Predictive contextual targeting, which is applied by Precise TV, instead looks at the current moment and uses AI to predict who is behind the screen. In the absence of behavioral data from a third party cookie, it uses all the data available in that moment like context and live signals on who is likely to be behind the screen and what their mindset might be like – it’s all probabilistic, but with a very high confidence that it will resonate.

How does a contextual DMP work?

The main difference is that a contextual DMP,  such as Precise TV Platform  is a non-PII DMP, meaning it doesn’t contain any personally identifiable information such as cookies. Precise+Graph DMP is certified  COPPA (Children’s Online Privacy Protection Rule) and HIPAA (Health Insurance Portability and Accountability Act ) compliant. Under COPPA for example, you’re legally not allowed to store any personally identifiable information, or use it for modeling or targeting, on children’s content. A contextual DMP is a hub for brands and advertisers to create, analyze and segment audiences that can be targeted using predictive modeling of content placements such as videos or publisher pages.

If you are interested in learning more about how we can help your business overcome the ‘Death of the Cookie’ please get in touch. 

Topics: youtube, contextual-targetting, Google, third party cookie, privacy, advertising