4 Questions Driving the Future of Identity Without Third-Party Cookies

Derek Wise

This article is sponsored by Oracle.

If you spent most of 2020 counting down the days until 2021, then you’re not alone. For marketers, and almost everyone else for that matter, 2021 represents a hopeful restart – a potential shift back to normalcy, where budgets return to their pre-pandemic levels, plans are executed at a normal pace, and brands can begin to act on new ideas to recoup their losses from the last year. 

While it’s true that 2021 may indeed bring all these things, it will also bring a new set of uncertainties. At the top of the list, this year will mark the end of an integral part of the online advertising ecosystem: third-party cookies and other similar universal identifiers that have, for a long time, served as the backbone of programmatic advertising.   

Third-party cookies, in particular, have been the de facto delivery mechanism for audience data and targeting consumers online since 1995. Their removal from top internet browsers forces massive changes in how brands, advertisers, and publishers drive revenue and run digital ad campaigns. More broadly, the move sparks questions about the future of identity in the online ecosystem. 

So, as we embark on a new year filled with immense change and more uncertainty, let’s explore what the future of identity looks like by examining  four key questions. 

1. First, how did we get here?

There’s a combination of forces driving the current shift away from third-party cookies  to a more consumer-centric internet.  

The first is heightened regulation around the collection and use of personal data, such as the EU General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). There also are restrictions on the collection and use of advertising identifiers imposed by the top consumer platforms and internet browsers such as Google Chrome, Apple Safari and Mozilla Firefox – all of which decided to sunset the third-party cookie in the interest of consumer privacy. 

4 questions driving the future of identity without third party cookies 1

2. How will the deprecation of third-party cookies impact a marketer’s ability to reach the people they care about?

Despite the ubiquity of cookies, they aren’t the only identifier available to marketers for targeted advertising – nor are they even the most effective. Modern marketers work across multiple acquisition and retention objectives that require a variety of data signals and identifiers to facilitate, so relying solely on cookies isn’t an effective strategy

Remember, high-quality audiences are created using multiple data sources to ensure consistency and accuracy. Marketers need to remind themselves what the best proxy is for a real person online, or what digital identifier best reflects a person’s online presence – because it’s not the cookie, and it never has been. 

In a cookie-free world, marketers should think of advertising identifiers as simply another attribute of a person and adopt a people-based mindset. This means investing in a robust, accurate ID graph that includes multiple identifiers per person (e.g., names, addresses, emails, phone numbers, device IDs). The sturdiness of this approach not only allows for activation across ad tech and marketing tech platforms, but also will future-proof marketing strategies by reducing overdependence on any one identifier in the future. 

3. Will the deprecation of third-party cookies spell the end of third-party audiences? 

In short, no – audiences are here to stay. Removing the cookie from the audience creation and delivery mix means we will rely on other data signals to take its place. In fact, a combination of identifiers is needed for marketers to deliver effective advertising. It’s worth noting that the deprecation of third-party cookies is largely a reach problem – not an audience problem – due to the opportunities presented by a wide variety of offline data sources, such as retail and automotive purchases, loyalty card information and demographics.

Bottom line, there is no shortage of ways to reach people in a consumer-centric capacity, and this is an opportunity for us to realize a better value exchange with consumers. Using multiple identifiers means you can traverse ad tech and marketing tech ecosystems and carry on a seamless conversation with customers – whatever their path to purchase may be.

4. What are cookies being replaced with?

This is the million-dollar question. It’s unlikely there will be a silver-bullet solution that directly replaces third-party cookies. 

What’s more likely is that marketers will need to deploy a diversified approach to targeting and measurement, which will collectively deliver the results needed for omni-channel success today, and into the future.  

The specific make up of that portfolio will become clearer as the year progresses. Currently, there’s a strong indication that a combination of person-based audience identifiers, advanced contextual targeting and objective measurement solutions will form the foundation for the future of identity. But there’s more progress to be made and no doubt the rest of the year will be filled with innovations addressing this problem. 

Get ready for a transformative year ahead

This year is set to be a watershed moment for digital advertising. The need for innovation means stakeholders from all corners of the industry – brands, agencies, platforms, publishers and technology vendors – will collectively need to work together to protect the industry’s future. 

As we put the trials and tribulations of 2020 behind us, it’s time to focus on what promises to be one of the most exciting and transformative years in digital advertising to date.

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