The impact of the disappearance of cookie 

Since Safari took the lead in boycotting third-party cookies, Firefox and Edge have followed, and even Chrome, which has the highest market share of browsers, has publicly stated that it will end third-party cookies by 2023. 

The phase out of third-party cookies doesn't mean that advertising will go away, but rather that advertisers will become more challenged in collecting the data of consumer’s behavior. 

For advertisers, this may result in a spike in CPMs and a significant reduction in advertising effectiveness; for consumers, we need to pay the price in order to obtain the valuable content on the Web, and the higher quality of the content, the more likely it needs to be paid.

Are cookies dangerous?

Cookies are only temporary storage areas for data, but advertisers can track individuals' browsing history on the Internet across domains through "third-party cookies", which are shared with unknown groups on the Internet, and the tracked person has no control over them, thus involving the issue of personal privacy.

Consumers rarely think about the quid pro quo for the Internet. We get free information on the Internet not because someone is behind the bill for the consumer, but because we use our personal information in exchange for content.

Social media platforms, news sites and most online services usually do not charge users. The largest revenue for these free sites is "advertising". In the past, they tracked users through third-party cookies,  such as geographic location and demographics, current or past browsing or purchasing behavior, which are used to target the advertising audiences.

For example, if you have browsed products on a specific clothing page, you may see the ads of products you have browsed when you are on FB or other websites, because advertisers know which products you have seen through "third-party cookies".Thus, the death of third-party cookies has a significant impact on publishers, technology providers and advertisers. 

According to Google's research, publishers' average revenue dropped by 64% after third-party cookies were banned. As a result, more and more advertisers are looking for the solution to replace third-party cookies.

>> To learn more about the use of different cookies, please refer to this article.

Is there a solution?

Multiple major ad data vendors have already launched their own solutions, such as The Trade Desk's UID 2.0, but no matter which solution you join, the only thing that's certain is that there will be no more "unauthorized" tracking, so it's important to plan ahead and shift your attention from third-party data to first-party data.

First Party Data

First-party data is based on "user authorization", especially the user email login data, and UID2.0 is a solution based on email identification of users, which can help future advertising or brand remarketing. So you should focus on being more strategic by using first-party data to create more possibilities.

First-party data collection is also safer for users, who no longer have to worry about their whereabouts being "watched by a third party," as publishers and advertisers are required to follow privacy policy under mutual agreement.

Source: Statista 2022

The statistics show that the top three identifiers that are most likely to replace third-party cookies are user’s email, first-party data, and Universal ID. This means that websites with user registration data, such as streaming video platforms, game platforms, and social networking platforms, can get the most accurate database. 

However, we can’t connect the whole Internet by only relying on the user's email, so it is necessary for the cooperation between publishers and advertisers to create a huge database of user data.

We recommend that whether you are a large or small business, it is important to obtain as much information as possible about your loyal customers for the future. Many businesses may face technical problems that cannot be solved and may start to seek your first-party data partners to maintain the effectiveness of your advertising.

Next, we would like to introduce UID2.0, the most popular solution to replace third party cookies in the future!

Unified ID 2.0

Among the replacements of cookies, The Trade Desk’s original Unified ID 2.0 (UID 2.0) is perhaps one of the best known and has become an industry standard. The Trade Desk(TTD), as the world's largest Demand-Side Platform (DSP), aims to unite their digital advertising partners and create a new digital advertising ecosystem outside of Google or Facebook.

UID2.0 can provide a privacy-compliant identifier to power the advanced data targeting coveted by advertisers. It is like an ID card on the Internet that can collect information from a single user across domains. Unlike cookies, UID2.0 will require users to directly provide consent to a publisher by providing their email address before a publisher can create a UID2.0 identifier. 

Users must log in to the email before browsing a website, and publishers will need to explain to the user the value-exchange of the open Internet and why creating a universal identifier for the ad tech ecosystem is crucial, and users will decide whether to accept in exchange for free content. 

In addition, UID2.0 is able to run across ad channels, so advertisers can understand the effectiveness of ads across different ad channels (e.g. streaming TV, browser, mobile devices or other audio/video platforms) based on each user's identification card, thus improving the accuracy and effectiveness of ad delivery.

However, this ID card cannot replace what third-party cookies can do, because the "first-party data'' coming from various websites must be identified as belonging to the same person, in this case User Unify must be added to connect the scattered data and finally complete the database that advertisers can use. 

Source: The Trade Desk

Google finally supports an identity solution!

Google‘s newly launched Encrypted Signals Program (ESP) finally allows publishers to share encrypted first-party signals with their partner,  including Unified ID 2.0 identifiers.

Encrypted Signals Program

In March, the Encrypted Signals Program (ESP) entered the trial stage, in which 15 vendors' solutions such as TTD and Mediavine cooperated in the test, indicating that Google has agreed that publishers can use any encryption method to communicate with any third-party advertisers in the future, and are not restricted by Google. That’s being said, the transaction is between you and I, Google will not interfere or see the data. The encrypted data is irreversible and can prevent data theft or breach, which is more secure for publishers, advertisers or users.

The future of UID2.0 is clear, TTD has found support from multiple ad tech players who have signed on, such as LiveRamp, Nielsen and Criteo. Whether this solution can replace third-party cookies without significant impact, perhaps more results are needed before we make a conclusion.

The development of Taiwan's advertising industry

In the face of the upcoming Cookieless era, Taiwan's advertising industry is also responding to it. In addition to cooperating with the relevant solutions launched by Google and Facebook to solve the technical operational problems for advertisers, some technology vendors have also started to develop their own identity solution, including Tagtoo.

We have been working in the advertising industry for more than a decade, accumulating a huge database of data. Our Research & Development Team focuses on first-party data analysis, combining artificial intelligence and machine learning technology.

Our next step is to develop User Unify, with the goal of helping our clients in sustaining the efficiency of ad targeting!

Reference:

What the Tech is Unified ID 2.0?

In Human Terms, Episode 15: Unified ID 2.0

What is the Quid Pro Quo for the Internet and How Are Cookies Evolving?

Top 4 Cookieless Targeting Solutions

Google’s Encrypted Signals Program Just Entered Open Beta, And Here’s What You Need To Know About It

Unified ID 2.0 —— 程式化廣告的分水嶺之戰