April 29, 2020 By Daniel Elad Chief Strategy Officer of TheViewPoint

The ad tech industry is turbulent now. At the beginning of this year, Google confirmed its intention to phase out third-party cookies from the Chrome browser by 2022. As a result, figuring out the substitute user identification approach has become a necessary quests for key players in the digital market.

Internet users have been advocating for more data privacy and data protection for years now, and regulations like GDPR and CCPA are some of the things that have come of that. The decision to eliminate them was preceded by increasingly tighter restrictions on third-party cookies usage. For almost 30 years, cookies have been the backbone of online advertising, absorbing all the necessary data about users and thus allowing advertisers to run targeted campaigns.

With the help of cookies, marketers are approaching such crucial data as users’ demographic information (geo position, gender, age), their behavioral background (events on websites, purchase history), and search requests. So basically, cookies represent a log of a user’s browser journey. With this, brands can reach out to the most relevant audiences. And now, with the cookie-less era around the corner, industry leaders are puzzling over finding alternatives.

What Are the Alternatives?

For the time being, there are only a few principal substitute options for third-party cookies being discussed in detail within the ad tech community. One of them is the Privacy Sandbox suggested by Google. It represents a range of APIs (Application Programming Interfaces) for the browser that will provide users with privacy security and advertisers with tracking and measurement capabilities.

The Interactive Advertising Bureau (IAB) Tech Lab picked up the baton and declared it time to create a new protocol that would conform to the internet updates that have been taking place here and there. IAB suggests using a standardized identifier defined by privacy settings, preferences, and consumer control. IAB wants to use this identifier as a sort of digital passport or file of each user. The main thing here for a user is to set all the data in compliance with the identifier requirements. It represents a kind of analog of the phone numbers or addresses people are tied to.

Another solution here comes from the companies and agencies that offer creating networks of first-party cookies. The idea is to gather an extensive number of publishers so they will embed an ID of a company or agency into their first-party domains. In this way, it is intended to create a unified publisher network. With this, advertisers can find a relevant audience within a network by using hashed email as an identifier.

Landscape Redesign: What’s New for Digital Advertising?

The renunciation of cookies is already taking its toll on the entire ad tech ecosystem. As this challenge keeps all the industry members on the alert, it’s quite natural to assume that in the nearest future publishers and advertisers will be working side by side to find solutions on the issue. It could be a positive trend, as such cooperation may lead to the further improvement of supply chain transparency in general.

“Walled gardens” like Google and Facebook feel secure against the elimination of third-party cookies as they possess abundant first-party data. Meanwhile, most webmasters are looking for a solution in new realities. Publishers are now focused on building walled gardens of their own. On the other hand, if there is not time to do that, publishers will keep working on the retention of existing users, as well as luring new ones.

Moving to contextual advertising is another supposed significant shift in the advertising landscape. If marketers aren’t able to apply user data, they could leverage the content that users consume.

While the vast majority of ad channels are on their way to acclimatizing to the new industry environment, Advanced TV advertising is already fitted with IFA (Identifier For Advertising), commonly known as IDs. So, enhanced with IFA, digital TV is one step ahead of cookie-addicted channels.

OTT and CTV Today

To identify users and perform targeted advertising, a regular browser environment uses cookies. Advanced TV, in turn, embraces a diverse range of platforms including Smart TVs, connected devices, and different OTT platforms and substantially uses IFA to maintain advertising activity. IFA makes it possible to monitor user activity and behavior.

IFA brings the following benefits for advertisers:

• Better targeting
• Fraud detection
• Frequency capping
• Sequential advertising and retargeting
• Reporting and audience measurement, including unique reach.

Within ATV advertising, an IP address is used instead of a hashed email, and ID replaces the cookie. With this, OTT and CTV (connected TV) can accurately deliver innovative ads without using third-party cookies. Also, most of the ads on ATV are sold via private marketplace (PMP), which ensures high-quality impressions and fraud deals protection. Advertisers can place their commercials alongside the most popular TV shows and movies.

ATV has had a positive audience growth dynamic in recent years. In 2019, the number of U.S connected TV users hit the 190 million mark. Today, when COVID-19 has people locked down in their homes, CTV and OTT viewing trends are most likely to grow to an all-time high.

What’s Next?

Whilst third-party cookies are on their way to oblivion, digital television is moving towards innovations. As current ATV targeting provides high-quality output, the sky is the limit. Hence, ad tech companies are working on further improvement of advertising capabilities. Disruptive technologies such as artificial intelligence (AI) and machine learning can give a leg up here. For instance, AI can be used to scan TV show scripts and deliver relevant ads. In this way, AI brings real-time content and context recognition to the next level.

As to machine learning, it can significantly improve and optimize advertisers’ campaign strategies and decisions. Machine learning helps to forecast campaign expenditures for a particular period (and any others) based on previous experience. Alternatively, machine learning can help to create smart reports for media buyers and save their time on analytics. These are just a few examples. There are many other things AI and machine learning can give to ATV. These technologies will help TV advertising to stay at the forefront in a post-cookies era.

Wrapping Up

For the last few years, internet users have actively advocated for more privacy, security, and data usage transparency. At this point, Google is working on alternatives for third-party cookies which are now deemed to be obsolete. The complete substitute technology doesn’t exist yet. Still, Google and other tech leaders are working closely together to find a solution. While the vast majority of digital advertising channels are struggling with new realities, ATV continues to deliver accurate ad messages via IFA. Moreover, streaming TV is mastering new technology tiers such as AI and machine learning to shift to a brand new service level.

[Editor’s Note: This is a contributed article from The ViewPoint. Streaming Media accepts vendor bylines based solely on their value to our readers.]