Preparing for the "cookiepocalypse" with first-party data strategies

Have you ever googled a product, went back to whatever you have been doing before, and then spotted an ad for it placed on another website? That is third-party cookies at work.

Because they track user history and serve up relevant ads, third-party cookies have long been the backbone of digital advertising. So when Google this year said it would be phasing them out on its Chrome browser in 2023 over a three-month period, a one-year extension on its original deadline, news organisations were understandably sweating.

A survey by INMA in April revealed that 85 per cent of news executives said their online ad revenues depend on third-party technology. But change is needed. Third-party cookies were never designed for publishers and are one of the reasons why news websites' load times really suffer when crammed full of ads. The phase-out of third-party cookies has also been a long time coming following the trends set by rival browsers Firefox in 2019 and Safari in 2020.

What will replace third-party cookies depends on Google's Privacy Sandbox initiative, which is testing cookieless ad methods and Google is calling for news organisations to participate in its creation. Its chief proposal is FLoC (Federal Learning of Cohorts) that groups people into more obscure "cohorts" based on browsing history.

The whole situation can be considered a win for online privacy and GDPR. But whatever comes into force in 2023 will likely mean advertisers having less precise tools for targetting and measuring the performance of ads. Google’s own study published in 2019 found that the phase-out could lead to 52 per cent average drop in ad revenue for publishers.

This transition has been dubbed the 'cookiepocalypse', but the reality is less apocalyptic than it seems. Publishers have been thinking about this for some time, according to Greg Piechota, researcher-in-residence at INMA, who says that news organisations have three main priorities to consider over the next two years.

In the future, we expect major advertisers relying more on direct relationships with leading publishers.Greg Piechota

"Identify audiences, as it unlocks opportunities to improve content, user experience, and creating segments attractive to advertisers.

"Then enrich profiles of identified audiences and to use data on those identified to model profiles of those who are not identified, [and] activate the data for advertisers in the form of targetable segments," says Piechota via email.

First-party data strategies

Piechota is referring to building first-party and content data platforms - news publishers should be thinking about getting more users logged in to their sites and apps (thus collecting their own data). But while this is precise, it is limited in reach.

He points to Danish publisher JP/Politikens Hus in Denmark, who is moving quickly to make its premium site more attractive, so it is in a good position to work with potential advertisers post-phase-out.

"In the past, advertisers could track users from a premium site to a cheaper one. Any limitation to tracking will increase the value of audiences offered by premium publishers," he explains. "In the future, we expect major advertisers relying more on direct relationships with leading publishers."

Take organisations like News UK, which oversees The Times and The Sunday Times, as well as The Sun and Talksport. The first two titles operate as a subscription business and have a majority of logged-in audiences. It will be "business as usual" once third-party cookies are phased out, according to Ben Walmsley, commercial director, publishing, News UK.

The Sun and Talksport however both rely heavily on web and social traffic. Their loyal readers might sign into their accounts but fly-by readers might not.

News UK has notably gone to market last month with Nucleus, its own first-party data platform, enabling advertisers to reach its 36.5m digital readers across all titles. The point here is that Nucleus is trying to identify who the readers are across the entire company by tracking their behaviour across apps, websites as well as brand extensions like Sun Holidays.

By doing this, it can build a more complete profile of its users, rather than having duplicate data from different publications. Walmsley said that advertisers were recognising now that loyalty was an important selling point to clients. It is concentrating on brand value proposition post-cookiepocalpyse.

"This is no time to put your feet up," he adds. "We want to create a singular view of our customers across all the different touchpoints of the business."

Nucleus is already being used to sell ads and campaigns on its own estate in a way that is GDPR compliant. It is using the platform to validate ad proposals to clients, and providing post-campaign analysis. There is an added internal benefit in tracking how ads work alongside editorial, and which reader offers run best alongside which stories.

Part of the problem with the end of third-party cookies is that the jury is still out on how advertisers feel about the shift. Walmsley said that the current mood is positive and advertisers are starting to see differentiated value across different titles.

"We're confident that whatever twists and turns are ahead, we are prepared in our strategy," he says. "The prognosis is good in that we launched Nucleus, we were excited but this period hasn't happened. It's a lengthy extension, but we just need to continue on our own path."

Recommendations from Google

It is going to be two years of uncertainty. Claire Norburn, UK ads privacy lead at Google said that the platform is committed to helping publishers navigate and set themselves up for success in the privacy environment of the future.

She said that publishers should work with their legal teams to ensure privacy practices meet the requirements of the current laws, and run an audit of any advertising or technology partners to make sure that they too have privacy-forward principles.

In addition, she advises to create a clear and easily updatable privacy policy on how data is used, protected and controlled. Consider a consent management platform to gather and manage consent to deliver personalised ads while providing a better user experience and seeing a growth in revenue.

Google is also seeking feedback on its proposals through the Improving Web Advertising Business Group, the Privacy Community Group and the Web Platform Incubator Community Group.

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