Third-party cookies are facing their final demise in 2024, partly due to growing pressure from regulators, and stricter data protection regulations are already making it increasingly difficult to target users. It should therefore come as no surprise to anyone that there is a lot of movement in the German adtech sector as a result of the search for new solutions and alternatives and the evaluation of the opportunities and challenges of a cookie-free future.
Virtual Minds CTO Tom Peruzzi explains why it is important for companies to look at alternatives to the cookie as quickly as possible: “We need to move away from the cookie world, which has an expiration date, much faster if we want to determine further technical development ourselves. The new solution universe is diverse and is already being used intensively. It promises benefits for all market participants. Numerous publishers, adtech companies, agencies and advertisers have already had positive experiences with it, and the performance potential has been confirmed in a wide range of cases in recent years. We now need to accelerate the learning curve – because the results will be different, but also better.”
It is already apparent that the goal for the future cannot be a pure cookie replacement – for example, in the form of a login ID. Cross-channel tracking and holistic attribution are clearly at the center of the search for good solutions, and so are multi-signal alternatives that fuse geo-location, device types, context, and other information together with IDs into one signal, in addition to first-party data.
On the way to versatile and universally applicable solutions for the post-cookie era, numerous new players are getting into the game. And it is already clear that not all providers will prevail. However, the lively development in the ID sector is benefiting greatly from the competition between the various alternatives and offerings.
The aim of the identifiers is not to enrich them with additional information, which would violate data protection and consumer protection laws. Rather, the aim is to achieve addressability on the route while maintaining data protection, and to do so without loss in a pure server-to-server communication. Extending this game with first party curated addressability proposed by German companies, including Virtual Minds, ensures that only the agreed and necessary parties receive all information and provides the highest level of security. Virtual Minds is a pioneer in this area due to its long-standing focus on data security and protection, as well as its courage to test alternative tracking methods early on as a first mover with partners and market participants such as UIM, Axel Springer, Xandr and AdForm, for example.
Value of new identifiers increases over time
While many of the new ID solutions offer rather limited value at the outset, this increases with growing adoption and increased use of them; ultimately allowing more data to be collected and consolidated over time. So in the future, a handful of different identifiers will likely become the industry standard, and as data volumes and insights grow, they will become increasingly valuable to the digital advertising market.
However, success does not only depend on the ID solutions used. To expand knowledge of first-party user profiles, Data Clean Rooms (DCR) come into play. Through Clean Rooms, collected data from two parties can be shared and consolidated in a GDPR-compliant way, not only to increase, control and complete one’s own data set, but also to achieve better targeting. However, for this endeavor to succeed, DCRs must be firmly embedded in the workflow and natively integrated into participating platforms.
Anna Rossmanith, Team Lead Key Account Management at The Adex adds: “Data protection is always in focus at Virtual Minds, which is why we see a lot of potential in the successful collaboration of Data Clean Rooms and DMPs in the future. The benefits lie in profitably merging different first-party data silos, for which Data Clean Rooms are a crucial tool. However, there is still a lack of universal standards for implementing these use cases. Here we must work together as a market to create these as quickly as possible!”
Identifiers, data clean rooms and other solutions
In addition to data clean rooms, which will become even more important in the future to enable privacy-compliant tracking and data exchange, and universal and cross-device identifiers, there are other solutions for targeting advertising without third-party cookies: for example, contextual targeting.
Contextual advertising offers an efficient and AI-supported way to play out ads according to predefined keywords. If the corresponding keyword is used on a website, desired ads can be placed where it fits thematically. Since the focus here is on the content and less on the users, this alternative offers a good privacy-compliant solution for addressing target groups.
An extension of contextual targeting is semantic targeting, in which advertising is not only displayed on the basis of certain keywords, but rather on the basis of the main topics of an entire website. The semantic placement of ads convinces with a greater understanding of the entire content and thus offers greater brand safety, for example in the case of ambiguous keywords.
Furthermore, first-party data will also play an important role in user targeting – as it has for a long time and independent of third-party cookies. However, data consolidation and universal tracking will not be possible here in the future, even though data may be shared with third parties with appropriate consent.
“The adtech world is undergoing massive legal and technical changes right now. Within them lie tremendous opportunities. As always, such a transitional phase offers numerous options for approaching the associated changes: with forward-looking encounters, thought-provoking dead talk, or premature hyping. It is up to us to make the right decisions. We, who as adtech providers find ourselves “in the eye of the hurricane,” so to speak, view the new framework conditions as very positive. After all, the technologies and methods to benefit from them are there. We just have to use them,” summarizes Tom Peruzzi.