A New Menu for Success in the “Stale Cookie” Era

Don’t believe the headlines. Despite what you may have read, the ad industry is still saying farewell to a favorite menu item of marketers and ad data nerds alike: third-party cookies. After all, 50% of the web is already cookieless thanks to the Safari, Firefox, and Edge browsers, which have eschewed cookies for years. And while Google will no longer be moving forward with plans to deprecate third-party cookies altogether in Chrome, it’ll be giving users clear opt-outs – a global cookie consent system – that we can expect many will take them up on. We’re facing a cookieless or at least cookie-light future – we can call it the “stale cookie” era. Amid this, plus more changes in ad tech’s overall landscape, advertisers have to pivot.

That process has been front-and-center in Infillion’s strategy as we expand the relaunched version of adtech pioneer MediaMath, which we acquired last year. In 2022, Infillion was born out of the location data company Gimbal and engagement advertising platform TrueX – both rich sources of cookieless data – so the additional acquisition of this DSP puts us in a prime position to provide ad buyers with another way to get information about ad purchases.

Our experience relaunching MediaMath, not to mention the fact that we were already squarely in the business of cookieless advertising, has given Infillion quite a few learnings about how to navigate this cookieless world. After all, to go further into the analogy of “cookies,” a good bakery adapts its desserts to what users want and what will serve them – even if its core menu items stay the same. Discussions with brands and agencies over the past twelve months post-acquisition inform the following ways to think about cookies, with some unique insights from our DSP to share. Let’s talk about the menu items that aren’t changing, and that we expect will stay on for some time.

An Adaptive Dessert Menu: Cookies to Cake
Many current trends in ad tech – like personalized advertising, the rise of programmatic, and leveraging data effectively – remain unchanged despite the shift away from cookies. That means the industry really isn’t reinventing the wheel. Instead, we can think about this transition as a migration from cookies to, say, cake.
What are the ingredients? Well, we can think about this metaphorical cake as a three-layer cake,, with each layer representing a solution:

1. Cohort-based solutions
2. Household
3. Universal IDs

Let’s do a taste test and dive into each of these.

How to Bake the Cake: Crafting a Cohesive Strategy

1. Top Layer: Cohort-Based Solutions
   

   Cohort-based solutions offer a distinctly different flavor from cookies, with a focus on privacy. These solutions group users into cohorts – without identifiers – that are based on common interests or behaviors. These rely on differential high privacy techniques, such as Google’s Privacy Sandbox and contextual targeting. Right now, cohort-based solutions have a low to medium adoption rate among advertisers.

2. Middle Layer: Household-Level Solutions

   Household-level solutions have a hint of cookie flavor, but with a twist. These target households rather than individuals. CTV, for example, is primarily driven by household targeting, often using IP addresses. These are less accurate than individual level cookie-based measurement and attribution purposes, but will remain an alternative, used increasingly as cookies deprecate. Because household-level solutions don’t recognize individuals, they have a medium level of privacy. Adoption level right now is high – if you’re running on CTV, you’re already running household-level targeting and attribution.

3. Bottom Level: Universal ID Solutions

   The final layer of our cake is the closest to traditional cookies – but with a rich, deterministic data flavor that’s brand new. You’ll notice notes of user opt-in and consent. Universal IDs rely purely on cohort-based solutions, targeting specific groups of people who share similar characteristics.

   But they do preserve individual-level identity (medium-level privacy) with an additional layer of user consent and opt-in, and would cause the most impact and change, especially to measurement. As such, they’d make for the easiest transition away from cookies.

   But there are some complications. Universal IDs in digital advertising can be categorized into two types: deterministic and probabilistic. RampID and UID2 are examples of deterministic IDs, while ID5 and Panorama ID are probabilistic. Both types make up a significant portion of bids, with probabilistic IDs having a slightly larger share.

   The key issue is that limiting yourself to just one or two Universal IDs, or focusing solely on either deterministic or probabilistic IDs, puts you at a considerable disadvantage. For instance, using only RampID might give you access to about 30% of available inventory. However, by utilizing all available Universal IDs, you could potentially reach over 50% of it.

Evaluating Universal IDs: Filling the gap
Now that we’ve put the layers of our cake together, we have to ask the question: Are universal IDs filling the gap? This is a big question for the industry right now, and the answer appears to be yes. When we look at the actual data of Universal IDs that we see in ad inventory sent to MediaMath across the open internet, we see that about 66% of all inventory contains a Universal ID. This is higher than most marketers were expecting. However, your specific audience might scale differently than these general numbers we see. In short, we need both deterministic and probabilistic approaches to maximize reach, addressability, measurement, and cost efficiency.

The Cookieless Imperative: Necessity of multiple solutions (the whole cake)
Beside the loss of third-party cookies, why is the whole cake a better option? In the past, relying on a single identity solution was sufficient. Now, we must rely on a collective of solutions for a holistic identity strategy. Things are changing, and relying on a single identity partner is no longer possible. This is the Cookieless Imperative.

Cookies were fun (for advertisers) while they lasted, but there’s a new cake in town, layers will keep being added, and we need to keep expanding the dessert menu to include new options. Having a holistic identity strategy creates a fuller picture of user identity, in turn making ads better and keeping marketers on their toes. When it comes to Universal IDs, combining deterministic and probabilistic approaches lead to optimal performance. Advertising will only continue to get more personalized, and we want users to feel that their identities and data are being respected while delivering the most relevant ads through effective programmatic strategies.

Interested in post-cookie solutions for your company? Reach out to Infillion today.