Exploring New Ad Tech Solutions to Third Party Cookies

Despite an ever-extending timeline, Google Chrome plans to deprecate third-party cookies (3PC). Doing so will alter how the digital advertising industry operates for brands, publishers, and data providers alike.

This is a good thing in our opinion.

Understand, third-party cookies were not specifically designed for programmatic advertising. They were adopted for lack of better alternatives. Many issues that plague the marketing industry—poor match rates, fingerprinting, etc. result from using the wrong tool for the job.

The deprecation of third-party cookies is an opportunity to build a more efficient and privacy-safe identification infrastructure. One that works for the specific needs of the advertising ecosystem and creates a better customer experience.

Today, we are diving into some of the most prominent of these emerging solutions.

Different Approaches to Advertising Technology

There have been a lot of questions about the future B2B advertising in a cookieless world. For example, is the 3PC phase out really about data privacy? Or is it another example of monopolistic behaviour by big tech platforms?

For all of their faults, third-party cookies worked. They helped marketers serve the type of personalised experiences modern B2B buyers demand.

So, should we aim to create the same functionality using alternative methods? Or does there need to be a paradigm shift away from using personal data in favour of contextual cues?

As advertisers, publishers, and ad tech platforms grapple with the end of using 3PC to track users online, two major sides have emerged.

On one side there are independent publishers and platforms that support universal ID solutions. On the other side are the industry players that are rallying behind Google’s Privacy Sandbox.

Universal ID Solutions

Universal IDs (also called alternative IDs) provide publishers and advertisers with a privacy-conscious way to collect and share user information.

As Daniel Heer, founder and CEO of Zeotap explains:

The ‘universal ID functions as a master first-party “cookie”, but one that is persistent and valid across all data-collection (and activation) channels.’

Universal IDs can be created using deterministic and/or probabilistic data.

• Deterministic: This approach uses data provided with the users consent. Personally identifiable information (PII) such as an email address or phone number is then encrypted. That creates an anonymised ID that can be used for targeting.

• Probabilistic: These solutions gather user touchpoints (e.g. IP address, browser type, screen size, device model, OS, etc.) across a digital ecosystem. It can then approximate an identity without relying on actual first-party data.

Universal IDs help advertisers target and measure advertising campaigns.

They allow for the improvement of the user experience, without the same privacy concerns as third-party cookies. While the encrypted, anonymise ID is shared across the partner network, the user’s actual information is never transmitted. This is a crucial distinction from 3PC, from a privacy perspective.

Here are some of the main universal identifier solutions currently on the market.

Unified ID 2.0 (UID2)

One of the most talked about universal ID solutions is an open-source, deterministic framework called Unified ID 2.0 (UID2).

UID2 uses a single sign-on to create a unique and anonymous identifier. The user’s PII is converted into an alphanumeric key through hashing which is stored by DSPs, data providers, and advertisers. However, it never directly enters the bidstream. Instead, the key is re-encrypted as a token and assigned a different value every time there is an auction.

The UID2 framework offers user transparency and privacy controls while supporting advertisers’ ability to run personalised ads. Users must voluntarily share their information (for instance, to gain access to great content) before an identifier can be created. Moreover, they can manage their ad preferences and can opt out at any time.

UID2 has steadily grown its partnership roster over the past couple of years. Companies that have adopted Unified ID 2.0, include Xander, LiveRamp, Index Exchange, Tubi, Publicis Groupe, Magnite, PubMatic, Criteo, and SalesForce. 

Unified ID 2.0 is available in markets around the world, including the US, Canada and China. However, it is not currently available for GDPR countries (though a UK and EU-focused version of UID2 is under development).

ID5

Another major player in the alternative ID race is the French-based startup ID5.

It is a consent-based identity solution that uses both deterministic and probabilistic identifiers. The IDs are encrypted and stored as first-party cookies. The publishers can then share them with their monetisation partners via ID5’s IdentityCloud.

IdentityCloud enables publishers and advertisers to exchange information and connect user IDs across devices. Doing so provides the targeting and measurement capabilities necessary to run people-based strategies across devices.

ID5 also has an extensive list of AdTech vendors and media platforms partners, including Adform, Beeswax, Smart, AutoTrader, and Daily Mail. Moreover, it is approved to operate in GDRP countries.

RampID

LiveRamp’s RampID (formerly called ‘IdentityLink’) is another well-known deterministic approach. It matches offline PII and online devices to create person-based identifiers.

LiveRamp’s Authenticated Traffic Solutions (ATS) consolidates data from multiple sources, including mobile devices, CTV devices, and first-party data. It translates these signals into an identity graph and assigns that individual with an anonymous identifier, or ‘RampID’. This ID allows partner advertisers to target the user without the risk of exposing their PII.

The RampID framework eliminates the need for cookie syncing and maintains a consistent identity across platforms. If a user opts out of targeting advertising, that decision is passed to every partner in the LiveRamp data ecosystem. (An improved experience over 3PCs, where users have to opt out each time they land on a new site.)

LifeRamp has a broad partner network of technology platforms, data providers, and agencies, including LinkedIn, Microsoft, Viacom, and Epsilon. They currently operate in APAC, EU, and North America.

Universal IDs and ID graphs provide one way to move forward without third-party cookies. However, there is another potential solution we must account for—Google.

Google Privacy Sandbox

Privacy Sandbox is a Google-led collaboration. It aims to create new web standards that facilitate online advertising without third-party cookies. Unlike universal ID solutions, Google claims they want to develop a way to target ads without relying on user-level identifiers at all.

To date, various stakeholders have introduced more than 30 proposals. Currently, the two most promising initiatives under development are FLEDGE and Topics.

FLEDGE API

One of the most complete solutions proposed so far through the Privacy Sandbox project is FLEDGE. FLEDGE stands for First Locally-Executed Decision over Groups Experiment.

It is a proposal for remarketing and custom audience targeting that centralises the power within on-device ad auctions. Rather than identity signals being passed among ad servers, exchanges, and DPSs, everything happens on the user’s browser. 

Publishers, advertisers, and ad tech companies can assign anonymous users to specific interest groups (defined by browsing behaviour). These interest group assignments are contained in the user’s browser and expire after 30 days to protect user privacy.

The owners of an interest group provide the browser with configuration information to enable said groups to participate in ad auctions.

When the browser visits a participating domain (i.e. uses the FLEDGE API to handle ad space), it triggers an auction.

The sellers define parameters for bid prices, metadata, and determining auction results. It then sends out a list of invited interest groups (the buyers). The browser compares this invitation list to its group member membership list. If there’s a match, it runs the auction.

The winning buyer transmits the ad information (metadata and creative) to the browser. The ad is then rendered inside a protected area called a ‘fenced frame’. In theory, the frame will prevent ad code from interacting with the surrounding page and collecting user data. This protects user privacy. 

Topics API

Another proposal that has been gaining tracking is the Topics API.

The Topics API proposes a cookieless way to serve relevant ads based on their recent browsing activity. Like FLEDGE, the Topics API is an on-device approach (meaning none of the data processing happens on an external server). Whenever a user visits a participating website, the browser will analyse the content and label the site with high-level topics. For example, it would match the website of a marketing automation vendor with the topic ‘Marketing’. 

These topics provide contextual information about the user's recent interests. According to Google, topics will be selected from a human-curated, publicly visible list that will not include sensitive categories (i.e. ethnicity, sexual orientation, religion, etc.).

When a user lands on a participating site with available ad space, the browser picks three topics for targeting purposes. It shares this information with that site and its advertising partners to personalise ads to that user.

Shared topics will remain active for three weeks before they are deleted and replaced with fresh topics. Moreover, users will be able to see their current topics and remove any they do not like (or disable them completely).

There is a hit of contextual targeting about the topics-based approach. But like classic behavioural targeting, the Topics API decouples content from context. For example, it could be used to target fitness lovers, even when they are viewing content unrelated to fitness. 

Both the FLEDGE API and the Topics API proposal have entered the public discussion phase and are now open for testing.

Where Does This Leave B2B Marketers?

As we have seen, there are many robust identity/targeting solutions in the pipeline, but the situation is still evolving. Even so, it is unlikely Google will phase out 3PC until they have an alternative in place. There's simply too much money at stake.

Likely there will be no ‘one-size fits all’ tool for advertising in a post-cookie world. For example, Google has given conflicting signals regarding its support of universal IDs. However, they will likely be forced to allow publishers and advertisers to use them in order to avoid anti-trust action. We also can not forget there are other closed data ecosystems that fall outside of Google’s purview (Apple, in particular).

Ultimately, B2B marketers will likely use a combination of tools to reach audiences across the web and connected devices.

While we have some time to see how things pan out, we should start preparing for the shift.

To start, work with your IT team to understand how different systems might work for your specific situation. For example, will the proposed solutions integrate with your existing data ecosystem? Will they align with your company’s data ethics and enhance customer experience? Do vendors provide the information you need to answer questions your own client base might have regarding data privacy?

Another way you can prepare is to balance your overall marketing strategy.

Reduce your reliance on paid advertising. Instead, strengthen inbound tactics like SEO and content marketing. Or invest in relationship focused outreach like account based marketing (ABM). Also, explore using contextual tools in conjunction with ID-based advertising

More than anything else, focus on collecting first-party data (for example, building healthy email lists). Doing so will help you future-proof your brand against further industry changes.

Agile B2B Advertising with 1827 Marketing

1827 Marketing can help your business create agile, customer-focused advertising strategies that can adapt to new technology and privacy standards.

Rather than existing in isolation, our expertly designed ad campaigns integrate and support your broader content marketing efforts.

Meanwhile, our marketing automation platform provides advanced analytics for all your paid, organic and email campaigns in one place. It can be integrated with sales automation solutions and CRM software to give you a 360° understanding of your customer journey. Contact us today to learn more.