Interviews, insight & analysis on digital media & marketing

Can agencies help solve the cookieless future?

by Alison Harding, VP of Data Solutions, EMEA, Lotame

As the reign of third-party identifiers draws to a close, it looks like players on the buy-side and sell-side are in the driving seat to the top of the data hierarchy. First-party data has become critical for improving relationships with customers and driving better business results.

Publishers have developed an in-depth knowledge about their customers, a direct relationship that relies on high quality and privacy compliant inventory. Brands, in turn, leverage value-driven offers, loyalty programmes, and other products and services, in exchange for personal information. We cannot deny the importance of these two groups within the programmatic sphere – after all, publishers provide the best branded ads suited to their audience – and each has ample influence, as well as a lot at stake, when it comes to the search for a valid cookie replacement.

But there is another vital and often overlooked stakeholder to consider: agencies. As an intermediary, with insight to advise on the best creative, data and technology plans, agencies are the thought leaders and problem solvers of the entire media ecosystem. But their position as an intermediary is coming under more stress than ever before.

Stretched thin

Agencies still have an important role to play. But challenges within the industry are stretching them thin and slowing down progress. The entire advertising ecoysystem has been bracing for the loss of cookies since Google first announced their phase out in 2020. Now slated for 2023, no obvious replacement for this powerful audience targeting method has been found.

While agencies have traditionally worked closely with DSPs, this partnership may face obstacles due to the hesitancy to embrace cookie alternatives. Ranging from reluctance to open rejection – from Google Display and Video 360 (DV360) – this adds complexity into an already fragmented environment.

Whereas previously, DSPs would guarantee multi-dimensional audiences and inventory sources, agencies now have the responsibility to develop a new solution that suits all parties. This means finding specific, bespoke strategies to deliver individual brand advertising needs and goals – which is not an easy position to be in. But it is not just targeting ability that will be affected by the loss of the cookie.

Measuring up

Losing cookies puts advertisers in murky waters when it comes to measurement. Again, the lack of a unified solution means that some very important questions are going to be left without easy answers: How many people are seeing an ad, who makes up this audience, and most importantly, what is the ROI?

Agencies are left trying to find the right measurement solution to give these answers. But even before we lose third-party identifiers, Apple’s App Tracking Transparency framework has shown the impact that tightening privacy regulations can have on measurement.

With over 62% of users opting out of cross-app tracking when Apple introduced the framework in 2021, the impact on measurement has been devastating – Facebook alone stated that the move had lost it around $10 billion. In response, it is building its own walled-gardens higher, trapping customers and brands inside.

All this leaves agencies in an uncertain position. Finding measurement solutions that work, are scalable and can survive further privacy squeezes is an overwhelming task. So what is available?

Finding a solution

Already, a number of alternatives have emerged to recreate the same level of targeting efficiency: ID solutions that work with non-authenticated identity (consumers remain unknown and industry players rely on predictive inference), authenticated identity (consumers agree to opt in with their personal information, such as an email address), cohorts (such as Google’s Topics), or contextual targeting (advertising based on page content).

SSPs have emerged as one possible solution. The purpose of an SSP is to maximise yield for publishers through a programmatic marketplace. For this reason, it has always been, and always will be, in their best interest to be at the forefront of new targeting and measurement solutions; especially those that ensure the best buying and selling options to augment the value of publisher inventory are available.

The water is still murky however. Though agencies may be able to test cookieless solutions that bring in good results, CTR’s, Viewabiltiy, lower CPMs and eCPC’s, the big question is still unknown: will these solutions actually help their clients to sell their products/goods?

As we enter a cookieless world, brands, agencies, publishers, and technology platforms are all key components of an ecosystem that is on the brink of extraordinary change: challenges around targeting, measurement, and proof of ROI are abundant.

Agencies have come to the fore, driving innovation and creativity during a period of extreme uncertainty. Keeping a finger on the pulse of ongoing trials will therefore be essential when planning future success.