Verizon Media

The cookie has crumbled: building solutions for the new era of identity

With third-party cookies coming to end, the advertising ecosystem needs new solutions to show proof of digital marketing's effectiveness, writes Josh Partridge, managing director, UK and co-head of EMEA at Verizon Media

The cookie has crumbled: building solutions for the new era of identity

The crackdown on cookies and app advertising IDs has begun, and it's forcing advertisers to question what this means for the future of the industry. Many are still clutching at the straws of traditional methods of targeting and measuring using third-party data as the old model is stripped away, but it’s time to let go. Today, around 30% of ad opportunities are without ‘identity’, and by 2022 this number could be easily nearer to 70%1 based on predictions. For advertisers, this means identity-based ad opportunities will diminish, and become more expensive as a result. 

In order to continue delivering targeted ads at scale and effectively distribute content that resonates with audiences, many players in the advertising ecosystem are having to learn how to build, operate and open themselves to use new solutions from scratch and embrace new approaches to solve the age old question: how do I know my advertising is working? 

The problem is, the cookie - and app IDs which are already being affected by the new changes taking effect in Apple’s iOS 14.5 (you can read the latest global opt-in rates to app-tracking from Verizon Media’s Flurry analytics here) - was never a truly optimal way of targeting or measuring anyway. We’ve all had the experience of visiting a product on a website and then seeing that product follow us all over the internet as we visit other destinations. People are tired of it, and naturally they’re ‘opting out’ when given the choice if that’s the experience they have had. 

So, now it’s time for more advertisers to adopt solutions that can help with non-addressable inventory and meet the demands of changing privacy laws.

Context - and content - is king
The phasing out of cookies has left many businesses feeling anxious about the future, with a recent Adobe survey finding that only 37% of companies are “very prepared” for a world without third-party data. Further research carried out by the IAB2 found that 76% of data leaders do not expect their revenue to be impacted by the loss of third-party cookies and identifiers.

For me, the future of identity lies in striking the balance of providing a meaningful consumer experience and delivering growth for advertisers and publishers, while at the same time protecting user privacy and preserving their trust. With this in mind, we’re seeing solutions such as contextual targeting having a renaissance. But there’s a myth that we’re effectively taking a step back in time in order to ‘plug a gap’ left by the deprecation of cookies. 

We don’t see it that way, though. The power of first-party data, layered with real time signals and machine learning algorithms makes for an incredibly powerful and future-proofed solution for when identity is not attached to an ad impression. With the latest ID solutions, you can layer on more nuanced contextual factors such as location, weather, what platform users are logging in from, as well as what kind of content they’re interested in. All of this actually enables advertisers to garner meaningful audience insights in real-time and infer audiences that are likely to be relevant to your business and objectives.  

Building more meaningful experiences 
The death of the cookie will also put much of the power back into the hands of publishers to manage and monetise their own audiences. It will push publishers to innovate more creatively and not just rely on clicks, harnessing technology in a more mindful way, as they look to reimagine the way they have monetised content through ads. They will be in fierce competition to deliver attractive and reliable content to draw in the attention of audiences and will be looking for fewer, better partners to help them monetise those audiences. If advertisers and publishers embrace this change by keeping digital trust at the core of everything they do, the new model will ultimately result in a digital ecosystem that not only honours privacy, but delivers more premium and personalised content experiences to users’ screens. 

The sweet spot for advertisers  
We’re currently seeing two main approaches within the industry when it comes to addressing the challenge of identity - persistent IDs to replace cookies and contextual, based on content consumption. Our Verizon Media ConnectID - which we plan to roll out in EMEA soon - is our consent-based identity solution, using opted-in first party data from across our ecosystem of owned and operated brands and communications tools to power our ID graph which sees over 200 billion data signals daily from across the world. Our recently launched suite of Next-Gen Solutions brings together contextual and other real-time signals to enable core audience targeting capabilities in a privacy-centric manner when no identity is attached to the ad impression. 

The advertising ecosystem is ever-changing and at Verizon Media, we are are ensuring we can offer solutions that strike that all important balance of building trust with audiences around their data, providing meaningful and quality consumer experiences and ensuring advertisers and publishers are able to see returns on the investments they are making into providing content that consumers continue to want and expect open, free access to across the internet. 

In fact, we are hosting a series of webinars throughout June and July where we’ll discuss this topic in more detail and hear from some of our partners how they are future proofing their brand campaigns. Find out more information here.

2 IAB State of Data 2021