It’s not breaking news anymore but it’s still the talk across digital advertising: Google’s plan to disable third-party cookies for Chrome users later this year.

‘Cookiepocalypse’ has so far been more of a slow burn than a cataclysmic event. Apple and Firefox already block third-party cookies by default and Google restricted third-party cookies for 1% of Chrome users earlier this year.

Still, significant disruption looms over the online marketing space as Google prepares to fully flip the switch for its extensive Chrome user base.

The impending changes mean that advertisers and publishers can’t afford to wait to embrace cookie-less alternatives.

As a leading digital advertiser and publisher, System1 views this transition as an opportunity to further leverage our rich first-party data and expertise in contextual-based advertising.

System1’s VP of Display, Lila Hunt, explores the path forward and offers insights on navigating the ‘cookiepocalypse.’

Jump ahead:

• Third-party Cookies Explained
• Navigating the Shift
• New Opportunities
• System1 First-Party Data
• Control Your Own Destiny

 

Third-party Cookies Explained

What are they?

Most simply, third-party cookies are bits of data that tell a story about the sites you visit, the content you are interested in and the things you do online.  This data is used to display personalized ads, tailored to your unique interests, across different sites you visit. 

The most obvious example of cookie targeting happens when you put an item in your online shopping cart and that website starts serving ads on other sites you visit reminding you to come back and check out.

The less obvious and more tricky use of third-party cookies stems from technologies running behind the scenes all over the internet.

They can also learn from what you do online, profile you and sell your data to advertisers to help them target ads to your demographic, behavior and interests.

Beyond ad targeting, datasets built off third-party cookies can be used to inform product and service design, pricing strategy and marketing plans. 

Why the shift?

Most of us don’t expect personal harm from companies that track our browsing behavior. Historically, I think people have felt online ads are more annoying than dangerous.

Consumers do notice they are being digitally followed, which puts the tech industry at a critical turning point in socio-economic history because it is largely unregulated, the application of technology has ballooned over the last decade and people are eager to adopt solutions that improve their day-to-day.

The final shift away from third-party cookies is a small but notable acknowledgment that data protection is important and regulatory guardrails for tech are inevitable.

Our digital footprints are extremely intimate, having evolved to smart home systems, banking and payment solutions and record management.

Technology can be responsible for access to your home, driving your car and storing and distributing your money. As companies continue pushing boundaries on how tech integrates into our daily lives, they have drawn attention from legislators.

Some companies position more privacy focused digital experiences as a differentiator and value proposition.

They have embraced privacy in their products and services and have won market share by creating awareness and assurance about data protection — setting a new standard for consumer expectations with outstanding players coming on board to remain competitive.

 

Navigating the Shift

The ‘cookiepocalypse’ drop-dead date is going to be absolute pandemonium for the advertising industry.

To put it plainly: a lot of cookie-targeted campaigns that served yesterday all of a sudden won’t serve tomorrow.

It’s not easy to shift millions of campaigns towards new signals and goals that aren’t even targetable or measurable yet. We will see an initial reset that is probably scary or uncomfortable: Where do you go? What do you buy? How much is it worth?

It will take time and adjustment before we settle into our new normal no matter how much preparation we do as an industry.

Opportunities

We have a lot of work to do ahead of the H2 deadline.

As a publisher, the first thing you can do is understand your users — pay attention to what they’re doing, what they’re interested in and see where you have the most value across content and experience.

You might not have a path to leverage this data today but identifying your potential value is a very important place to start.

 

“You can’t optimize what you don’t know, which means you can’t effectively report on it either”

 

As System1’s VP of Display, my day-to-day will include looking for valuable signals: How is inventory performing and who is buying it?

It’s no different from what I spend my time doing today: How do we find the thing that makes money and lean in to make more? To do that, I need to focus on data strategy and really strong reporting solutions.

Collaboration

I think there’s a lot of opportunities for publishers to pool their data to create valuable advertising packages for advertisers.

Advertisers will lose a lot of information about the users they are buying at scale across many websites.

Publishers can rally around a common schema for communicating different types of information to help buyers reach their target audiences more efficiently. 

We have a really exciting opportunity to say, ‘hey, we know we’ve got this thing, we know you’re interested, and we are a collection of high-quality publishers with premium inventory, great KPIs, with enough scale for you to work with us.’

I’m really embracing this concept right now by trying to build relationships across publishers so that we can speak to advertisers as a united front and control our own value.

 

First-party data

System1 is set up very well for success because we’ve always invested in verticals that have high in-market and consumer intent. We have unique first-party data that we can package and price to enhance our inventory value.

We’re working on structuring our data across all of our sites, making sure the data is being passed to partners who need it and price controlling our highest value signals. 

There’s a real opportunity for people who are first-to-market and System1 works hard to be strategic and respond proactively to change so that we can be first.

Control Your Own Destiny

Our industry often assumes the biggest publishers are best set up for success by providing scale and audience reach that advertisers value.

I think smaller websites in very niche verticals with a lot of direct advertiser relationships will fare really well in a privacy-first advertising landscape.

Publishers that represent really broad and diverse content will need to hustle because very few of us stand alone in all topics that we publish about.

I’m afraid contextual value may negatively influence content strategy as we lose publishing investment for topics that don’t attract as much advertiser attention. We’re going to see really competitive battles for attention among the highest paying verticals.

We’ve seen these incentives translate to both content commoditization and voids driven by profitability. That’s what I am personally paying attention to: Where’s the money? Where’s the users? How do we get the most out of both?

The Cavalry Isn’t Coming

In the words of Paul Romer, “a crisis is a terrible thing to waste.” Don’t just sit there and hope that it all works out because the cavalry isn’t coming.

No one vendor or solution is going to come out of left field and save us and preserve our revenue or champion our relevance with users and advertisers.

We have to create this meaning and value for ourselves and we probably need to work together to create enough scale to demonstrate results and value for advertisers.

I don’t see third parties being able to interpret everything publishers can offer on our behalf and in our best interests. We used to gatekeep our value before programmatic.

I have no doubt we can do it again but in a way that leverages the technical and resourcing efficiencies we’ve gained from the auction model.

Not everyone has access to early adoption programs that respond to third-party cookie deprecation.

If you don’t have day-to-day touch points with your service providers, make friends with somebody who does and find out what’s going on, how services are evolving and how you should be thinking about managing your business in response to the changes that are coming.

Read more about Lila Hunt here.