“3rd party cookies deprecation. Consequences and alternatives” – the summary of the webinar by the IAB

On July 27, IAB Ukraine organized the “3rd party cookies deprecation. Consequences and Alternatives” webinar, where digital experts shared their thoughts on what lies ahead for the industry after the third-party cookie ban. Mykhailo Bryzgunov, PPC & Programmatic Group Head, also took part in the webinar. We have prepared a summary of the webinar for you so that you can better and more easily understand what awaits the market after the innovations.

3rd party data is data that is collected and analyzed by a company that does not interact with the customer directly. This data can be used for the purposes of advertising targeting, analyzing customers’ behavior, and determining their interests.

3rd party data can be collected from various sources, such as:

• websites
• mobile applications
• social media
• offline data (for example, in-store purchases)

Targeted advertising is a type of advertisement that is shown to users who are likely to be interested in it. Customer behavior analysis is the process of studying user actions on websites and mobile applications. Identifying customer interests is the process of determining what users are interested in.

3rd party data can be a useful tool for companies that want to better understand their customers and target advertising to them. However, it is important to note that third-party data may not always be accurate or up-to-date. It is also crucial to comply with the legislation on the protection of personal data when using third-party data.

First-party data	Third-party data	First-party cookies	Third-party cookies
Data that your company owns and collects. This may include the data collected either online from the website or offline. It’s the most sustainable due to the ecosystem changes.	This data belongs to and is being collected by other parties but not your company. Though it’s sometimes called “other parties’ data”, technically Google’s own data belong to this type from your company’s point of view.	The cookie file type is stored in the customer’s web browser. This file type will be further allowed for Chrome in 2024 but it has time limitations for Safari and Firefox.	The cookie file type is for storing data in the customer’s web browser. Today this file type is forbidden by default in Safari and Firefox and since 2024 it will be forbidden for Chrome as well.  Note that for some own data activation, third-party cookies are NECESSARY.

Currently, 3rd party cookies are used for tracking and collecting user data, audience profiling, targeting, analytics, attribution, and optimization. They help identify users by certain characteristics, such as sociodemographic parameters, behavior, preferences, etc., and obtain data about their actions on the site, for example, page views, adding products to the cart, purchasing, filling out forms, etc.

Advertisers use this data to set up personalized and targeted advertising.

1st party cookies	3rd party cookies
Tracking a user’s behavior within one website Collecting personal data is conducted with the help of various pixels and GA	Multi-site users’ behavior tracking Enrichment of data on the customer and the customer’s portrait Further data usage for targeting of advertising through DSP

Why did the question of replacing the use of 3rd party cookies arise?

3rd party cookies and other identifiers track user activity on sites, and user data may be shared more widely than users expect.

The limitation and further absolute banning of 3rd party cookies’ usage were influenced by  the adoption of the GDPR and the CCPA, which limit the collection and processing of personal data. On the other hand, the request for privacy in the network also comes from users too. So Apple, followed by Google, started limiting the use of data by third parties. Currently, the use of 3rd party cookies is already limited in Apple’s SKAdNetwork and in Firefox and Microsoft Edge browsers. In 2020, Google introduced Google Privacy Sandbox, a solution aimed at ensuring user privacy and limiting cross-site tracking. According to forecasts, it will be fully operational in the second half of 2024. Therefore, a question arose in the digital community – how and what to replace 3rd party cookies with?

Today, the situation with the use of 3rd party cookies in the world looks like this:

DV360 budgets that can potentially be influenced by the elimination of 3rd party cookies	The distribution of DV360 budgets by targeting type
(blue) – Yes (grey) – No	(red) – Targeting third-party’s audience (grey) – Others
some browsers have already turned off the transfer some DSP systems are changing the approach

What will be the result of disabling 3rd party cookies?

Since 3rd party cookies are practically all the data that the user leaves on the site, the changes will be significant.

Below are the features that will cease to exist or will change after the prohibition of the collection of 3rd party cookies:

Function	Will cease	Will change
Floodlight Audiences	One-to-one audience targeting will not be possible as the audience will vary and consist of FLoC models | Topics API	While Active Targeting features require testing, Floodlight Audiences is not recommended. All 1st party audience activations depend on ID/cohort match rate
Frequency control	Tracking based on user behavior will not work for frequency control	Frequency controls will become 100% simulated.
GMP інтеграції для таргетування	The current SA360 and GA360 audiences will not be viable	Search retargeting and GA360 audience lists (except lookalike audiences) will be discontinued in the classic form. There will be a replacement for topics.
Fraud prevention	Cookie-based fraud prevention will cease and may potentially be replaced by alternative signals or Google’s Trust Topken API	Most of the major verification partners have already switched to such models. Acceptance of trust tokens will require the consent of the user, publisher, and brand security provider

This all boils down to generalizing users and erasing personalization. So there will be less personalized advertising.

Today it is worth taking care of how well pixels and other data collection tools work, start segmenting the audience on your own, and look for ways of getting the end customer.

What difficulties await the business after the cancellation of 3rd party cookies?

Innovations will lead to certain risks for both advertisers and DSP platforms.

Thus, clients will face an increase in fraud, a deterioration in cross-media modeling and calculation of the effectiveness of advertising campaigns, as well as a deterioration in the accuracy of targets and audience recognition.

As for DSP platforms, changes concerning the prohibition of the use of 3rd party cookies will bring the following difficulties for them:

1. The lack of cross-site user identification and, accordingly, the lack of the ability to build both coverage and intersection between sites.
2. There is no possibility of sustaining the frequency.
3. Lack of tracking of user actions and their fixation.
4. Changing the measurement identification addressing mechanism and changing the targeting system.

What this all mean for DSP

What will cease	What will stay	What new will appear
The estimation of cross-site audience coverage Building of cross-site frequency Collection, profiling, and application of cross-site audiences Post view reports and multitouch attribution	Targeting by publishers’ audiences Activations of 1st party audiences on platforms with authentication Targeting by context signals Post-click reports and optimizations	Seller Defined Audiences (SDA) (leading publishers’ 1st party audiences to the unified taxonomy and buying such audiences) Using API of external platforms for targeting by audiences and remarketing

The next changes in the planning of advertising campaigns are waiting for advertisers:

• one-to-one planning will be replaced by simulation, which will worsen the accuracy of this planning;
• the accuracy of frequency coverage calculations will decrease;
• the available volume of coverage will decrease;
• the planning will be based on the topics of the sites, and not on the segments of the target audience from the DMP;
• the possibility of working with audience will decrease, that is, remarketing opportunities will be limited;
• the costs of the anti-fraud system will increase, which is caused by an increase in the risk of technical traffic growth.

How will the changes affect analytics?

If agencies and advertisers have already switched to Google Analytics 4, disabling 3rd party cookies will not change the reports they currently receive.

Data used for measurement	The cookie file type necessary for the measurement	Whether it’s allowed to use data for measurement in Analytics if the data were collected in a browser, which does not support 3rd party cookies
Click-through campaign measurement from Display & Video 360, Campaign Manager 360 and Google Ads	First-party	Yes
Core measurement (time on site, pages visited, etc.)	First-party	Yes
Data Import (CRM Attributes)	First-party	Yes
Measurement Protocol (offline events)	First-party	Yes
Google Data (Signals/ Store Visits/ Age/ gender/ affinity)	Third-party	No
& Video 360, Campaign Manager 360, Google Ads sand YouTube Engaged View Conversions	Third-party	No

However, the biggest changes will impact remarketing. There will be a need to find new methods of activating different types of audiences:

Audience type	The cookie file type necessary for activation	Alternative methods of activation
Core site data (time on site, pages visited, etc.)	Third-party cookies	Using 1st party data (customer match)
Data Import (CRM Attributes)	Third-party cookies	Using 1st party data (customer match)
Measurement Protocol (offline events)	Third-party cookies	Using 1st party data (customer match)

At the same time, the metrics by which it will be possible to evaluate the effectiveness of advertising campaigns will change. Of the common metrics available today, only CTR will not have significant problems. As the digital ecosystem loses access to previous tracking signals, the data available for measurement will become more aggregated, more limited, fragmented, and time-bound.

Low	Middle	High
Viewability, media, and audiences verification Econometric modeling Single-touch Attribution CTR Metrics within one platform (for example, interactions, reactions on social media)	Digital and cross-medial researches Brand lift Direct determining of influence on conversions and sales Audience insights	Multi-Touch Attribution (MTA) VTR Optimal frequency and coverage Intersection of audiences Cross-device measurements

What solutions are already available?

Today, companies use several approaches to work with the data:

1. Collection of data “on the fly”, that is, the site collects user data that interacts with it.
2. Using CRM. If properly configured, CRM can be a great source of all the user data you need.
3. Segmentation. Segmenting pre-converted audiences may work for some, while others may need more advanced segmentation with multiple segments separated based on meaningful behavior patterns.

Currently, the Data Clean Room solution is becoming increasingly popular, being used by advertisers and publishers to find intersections between 1st party datasets without the need to share identifiable data.

There are several types of Data Clean Room:

• Complementary services of advertising platforms, such as Google, Meta, and Amazon as an additional tool for measuring the results of campaigns.
• Services that are not tied to specific platforms. They are used for finding anonymous insights in companies that are conducted between the publisher and the advertiser.

However, this solution has certain drawbacks:

• limited ability to use multiple channels;
• the need for separate user consent from each party, if there is no single data owner or independent validator;
• the need to unify data formats between advertisers, platforms, and publishers.
• Also, today the market is testing user identification solutions without the use of 3rd party cookies, such as predicative identifiers. They identify technological signals of user activity, such as IP address, device type, screen extension, OS version, etc. Such a solution allows you to get the desired scale for an advertising campaign, provided the correct data is used.

Also, today the market is testing user identification solutions without the use of 3rd party cookies, such as predicative identifiers. They identify technological signals of user activity, such as IP address, device type, screen extension, OS version, etc. Such a solution allows you to get the desired scale for an advertising campaign, provided the correct data is used.

However, like the previous solution, predicative identifiers have their drawbacks, such as

• the lack of transparency in the definition and collection of data, which may lead to a violation of the GDPR;
• refusal of browsers to transmit such identifiers;
• limited opportunities to compare data from different platforms.

Another solution is to use third-party ID systems that rely on data from the publisher collected using a third-party identifier. Users can control their personal data with the help of a third-party cabinet or a system for controlling the transfer of permission on the site.

Such solutions have several advantages, in particular, they allow obtaining comprehensive permission from the user, provide an opportunity to obtain quite detailed data, and have protection against fraud.

At the same time, they also have disadvantages: limited scaling capabilities and the need for investment on the part of the publisher.

Another solution used to collect data is ISP-based IDs. They allow deterministic targeting regardless of browser or mobile OS limitations.

Advantages of such solutions include privacy, lack of restrictions, and protection against fraud. But at the same time, such decisions depend on Internet operators.

In order to successfully survive the disconnection of 3rd party cookies, the webinar participants recommend returning to the Test&Learn practice. Controlled experiments are widely used in digital advertising and will continue to play a key role after the end of support for 3rd party cookies. Therefore, digital market players must develop alternative solutions for measuring digital impact with privacy in mind. To do this, they should follow a few tips:

• create a training program and measurement plan for test management;
• conduct a market test or experiment on a specific geo;
• develop an experimental plan;
• apply special statistical modeling to measure additional effects and calculate additional ROI.

Although disabling 3rd party cookies has been postponed several times, there is no doubt that it will eventually happen. Therefore, to prevent this event becoming a surprise for your business, it is worth looking for alternative methods of data collection already today.

Webinar speakers:

• Kyrylo Vynokurov, Industry manager of Google
• Darya Malikhatko, Data Sciences Director of Publicis Groupe
• Mykhailo Bryzgunov, PPC&Programmatic Group Head MixDigital
• Vitaly Morozenko, Founder and CEO of myGaru
• Ivan Fedorov, Business Development Director Admixer

Moderator: – Anastasia Baidachenko, CEO at IAB Ukraine