In January 2020, Google announced that it is to phase out support for third party cookies in its Chrome web browser by 2022. This deadline has since been extended, and in May 2023, Google announced it was to start blocking third party cookies for 1% of Chrome traffic starting January 2024, with the aim of having fully deprecated third party cookies by Q3 2024.
This article gives an overview of how the phase out of the third party cookie in Chrome will have an impact on the programmatic advertising ecosystem including BidTheatre DSP.
Cookies and User Identification
User data is tied to user identifiers. The current advertising ecosystem is reliant on platforms using their own (usually randomly generated) user identifiers, stored in user cookies. Cookies persist and enable the reader of the cookie to accumulate records of a user's behavior over time.
A third party cookie is a cookie that is being read and written by domains that are not the domain that you are visiting. The ability to share data across different platforms in a meaningful way when user identifiers are local to platforms relies on the transmission of third party cookies.
BidTheatre is an example of an actor that relies on third party cookies for various purposes related to advertising. Below we will look at these individually, and discuss the impact of the upcoming changes.
If you want more details on third party cookies, plenty has been written.
Replacing the randomly generated identifiers with a global user identifier could be an elegant substitute for the need of third party cookies. Existing infrastructure for storing user data on user identifiers could be kept, and there would be no longer a need to share user id's between platforms.
The Trade Desk has a proposal for Universal ID 2.0, which is an identifier based on user email hash. Producing an email hash will require users to provide their email to the websites they visit, which obviously limits the potential traction and footprint. Within its scope however, it will provide deterministic user data sharing within the existing infrastructure built around user ID's.
Google has announced that it will not invest in supporting user identification mechanisms such as the Universal ID 2.0. It is early so say whether this means that Google will actively fight it and if so if that's even technically possible.
In the following sections we will look at the major targeting features facilitated by user id's and third party cookies. We will focus on discussing the impact where a universal ID is not available.
Use Case 1: Frequency Capping
BidTheatre tracks what ads have been shown to what users. This makes it possible to "frequency cap", or pace, ad delivery so that messages are spread over time, which improves impact and gives a more pleasant user experience.
Frequency capping across different domains today relies on the use of user identification, and will hence not continue to work the way we know it. Google's Privacy Sandbox explores options to provide a replacement mechanism for both frequency capping, attribution and interest based ad targeting.
Use Case 2: Conversion Attribution
Post click conversion attribution does not rely on third party cookies, and should remain unaffected without third party cookies.
Deterministic post view conversion attribution is reliant on third party cookies, and will stop working as the cookies are phased out. Google is working on alternative methods to facilitate this via its Privacy Sandbox initiative. Most likely, advertisers will have means to attribute advertising effect on user conversion also after the third party cookie.
Use Case 3: Audience Data
The ability to accumulate insights about users and use these insights in media buying plays an important role in digital advertising. Usually at least three parties are involved in this process:
The source of the user insights
The media where the ad is displayed
The platforms that facilitate the buying and selling
Various configurations exist here, and we will look at them individually.
Publisher Audience Data
In the case of publisher audience data the source of the insights and the media is the same. Here the publisher and its platform partners can rely on first party cookies for user tracking, and provide its media inventory and collected audiences through PMP deals to buyers.
Advertiser and "Third Party" Audience Data
The ability for dedicated platforms to store audience data server side and send it for activation in partner platforms (SSPs, DSPs) relies on user ID's and will consequently be unavailable.
Other common audience data keyed on e.g. IP addresses or postal codes will be left unaffected, and we will likely see more of this type of third party audience data. Many of BidTheatre's third party audience vendors are building new data sets in this way.
Likewise, retargeting of visitors to an advertiser's site will be unavailable. This is perhaps the biggest short term impact of the third party cookie going away, possibly second to global frequency capping. Google's intention seems to be to replace audience targeting capabilities based on individual insights with the concept of user cohorts, explored below.
Google, together with several other industry actors, are envisioning a way to provide means for interest based advertising by letting the browser place its user in "cohorts" based on browsing behavior. Access to the cohort data is strictly limited to ensure that it does not "leak" to give third parties insights into the preferences of individual browsers. The cohorts will need to be of at least a threshold size, to guarantee that an individual cannot be identified by his or hers belonging to a specific cohort.
It seems likely that user cohorts will provide a mechanism for both interest based advertising, advertiser retargeting and even third party audience data to live on in the post third party cookie world. This will rely on new mechanisms for buyers and sellers to transact around audience data, and the industry is currently working to specify the details.
Below is a brief overview of what we're seeing ahead.
Within same site
Unified ID, Privacy Sandbox
1st Party Data
Unified ID, Privacy Sandbox Protected Audience API
2nd Party Data
Largely unaffected (built on first party cookies)
3rd Party Data
Based on Postal Code
Based on IP
Based on ID
Based on Browser Cohorts
Privacy Sandbox Topics API
BidTheatre Transition Status
Here we will outline the status of the work related to replacing third party cookies.
BidTheatre Device Graph
Enables cross device attribution and data sharing, linking ID's and fingerprinting
Work currently ongoing, expected release Q4 2023
Support of Chrome Privacy Sandbox - Topics API
Enables interest based advertising cohorts without 3p cookies
Work currently ongoing, 2023, expected support Q1 2024
Support of Chrome Privacy Sandbox - Attribution API
Enables attribution without 3p cookies
Work to be started Q3 2023, expected support Q1 2024
Support of Chrome Privacy Sandbox - Protected Audience API
Enables retargeting without 3p cookies
Work currently ongoing, expected support Q4 2023
Here we will list identifiers that we are evaluating and / or supporting.
Based on 1p & 3p cookies
Supported in BidTheatre Device Graph
Based on 3p cookies
Supported in BidTheatre Device Graph
Deterministic, hash of identifier such as email or phone number
Expecting participation and support Q1 2024
Evaluation planned H2 2023