Yet Another Twist in the Coming Cookiepocalypse

What is Cookiepocalypse? 

Google announced that they would be phasing out support for the third-party cookies in 2022, which will affect ad retargeting, behavioral ads, and user tracking. For advertisers and businesses that rely on them, demise of third-party cookies have series impact, i.e. Cookiepocalypse

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Last week, Google announced that yet again, they have postponed the deployment of their new alternatives to third-party cookies in the Chrome browser. That means those looking for post-cookie advertising solutions will have some more time.

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Third-party cookies are a staple of online display advertising, allowing companies to track users all over the Web and then showing them ads based on their browsing history. For example, if you look at, say, tires on a site like TireRack, and then later go to the New York Times website to read the news, you are quite likely to see the ads for tires there - even though at the moment you are not looking for them. This type of targeting is enabled by a complex infrastructure of servers and software constantly tracking users and deploying “third-party cookies” on the websites to be able to share information about users’ searches and browsing behavior across the different destinations - from TireRack to the New York Times to YouTube to Facebook to AccuWeather.

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This type of tracking via third-party cookies is pervasive - and raises obvious privacy concerns. In fact, precisely because of such concerns, Apple has disabled third-party cookies in the Safari browser (and Mozilla likewise disabled them in the Firefox Browser), so if that’s what you use, you will not see the tire ads on the New York Times after browsing TireRack.

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As online users (and regulators worldwide) become increasingly concerned about privacy and user tracking, it is common knowledge in the ad industry that the days of third-party cookies are numbered - and the industry has been desperately searching for an alternative solution. Google has been at the forefront of these efforts, initially attempting to develop a “Privacy Sandbox,” then coming up with “Federated Learning of Cohorts,” then “Topics,” and so on (see, for example, the brief history here).

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Other industry participants suggested their own alternatives, coming up with all kinds of terms and sophisticated-sounding ideas like Unified ID, CORE ID, Walled Gardens, Data Clean Rooms, etc.

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Unfortunately, none of these solutions work.

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The basic challenge is very simple: the visitors of the New York Times website are going there to catch up on the news, and are not in the frame of mind to look at tires - or jeans, or hotels, or cosmetics. So it takes a really invasive technology like third-party cookies to be able to get a signal about the user that is strong enough to distract their attention from the news they are reading and direct it instead to something that they were not planning to do at the moment. And the solutions that genuinely preserve users’ privacy make it much harder to generate such a signal. This is great for the users’ focus and attention on their intended topic - but not so good for advertisers who try to catch users’ attention, and for the publishers whose revenue depends on advertising revenue.

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Of course, the tech industry is incredibly creative, and there are tens of billions of dollars at stake. (For instance, when Apple announced the similar restrictions on user tracking across apps on their iOS mobile platform, Facebook’s executives predicted that this would have a negative impact on the order of $10B in 2022 alone - the prediction that promptly materialized last week, when Facebook announced their first-ever revenue drop.) So it is almost inevitable that the industry will come up with some solution that is reasonably effective at predicting what will catch users’ attention without violating their privacy as dramatically as third-party cookies do. But predicting what shape or form this solution will take - and how long it will take for it to stabilize and for the industry to converge on it - is essentially impossible.

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Google has now pushed the target date to 2024 - after initially planning it for 2022, and then postponing it once before until 2023. And after the initial rollout, how many new iterations will there be? Will we have the solution by 2025? 2027? 2030? How can a website or an app make long-term monetization plans in the face of such uncertainty?

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Is there a post-cookiepocalypse advertising solution?

Fortunately, there is a solution - at least for the mobile and desktop destinations on which users have a clear commercial intent. On such apps and websites, users typically indicate very clearly what types of goods or services they are interested in, either by explicitly searching for them, or by browsing to the relevant categories. And then with such a clear signal about user intent, one can show all kinds of advertisements to the user - specific products, brand-level banner ads, videos, and so on - without relying on any personal user information whatsoever. Moreover, since the ads are consistent with a user’s intent, they are not hijacking these users’ attention, instead providing useful and relevant information.

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Such solutions, built from the ground up with this privacy-preserving philosophy in mind, are completely resistant to whatever changes happen in the user-tracking universe - and allow the companies to confidently plan for the years ahead. In fact, just the day after Facebook announced their revenue drop that sent its stock plummeting, Amazon has announced their results that led to a dramatic increase in the stock price - in large part due to the meteoric rise of their advertising revenue (of almost $9B in just the second quarter of 2022 alone), driven to the large extent by precisely this kind of intent-based advertising.

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Topsort is delighted to be able to offer exactly this type of intent-based advertising solution to online and mobile retailers and marketplaces.

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Respecting user privacy is in our DNA - we have never used third-party cookies or any other tracking technologies of the sort to violate user privacy and hijack their attention. Instead, our solution has been built from the ground up to show users the ads that are relevant and useful at the moment when they are actively involved in the relevant search - not two hours later.

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So unlike the legacy solutions that are critically dependent on third-party cookies, we do not need to “change our stripes,” and are proud to be able to offer our clients a modern, relevant, and privacy-respecting advertising solution that will stand the test of time. We are a solution ready for the cookiepocalypse