Why interest based advertising the key for brands as cookies crumble

Marc Hiscock
By Marc Hiscock | 6 July 2023
Marc Hiscock.

Marc Hiscock, Head of Enterprise and Client Partnerships, ANZ - Quantcast

As cookies crumble away fast, advertisers must find new and innovative ways to reach their online audiences and continue getting good advertising outcomes. The media industry at large is currently lacking a one-size-fits-all approach, the best that brands and their agency partners can do right now is lean on technologies that meet at the crossroads of their marketing and data privacy adherence needs.

‘Interest-based advertising’ (IBA) can help businesses adapt and maintain effective audience targeting in a privacy-first world.

While Google works on fully phasing out third-party cookies by the second half of 2024, they have already been blocked by default in Safari and Firefox browsers since July 2020.

Advertising is at a critical juncture. Research conducted in 2022 estimated that at least 50% of all consumers are already browsing in cookie-less environments (that is, not on a Chrome browser).

These users, who mostly use Apple devices, tend to be younger and more affluent consumers. The number of people who "accept all cookies" on websites has also fallen to less than half of US internet users.

Essentially, marketers that are still heavily relying on marketing tactics that exclusively use third-party cookies are essentially investing budgets in an increasingly shrinking pool of consumers.

Advertising too heavily within the walled gardens will also limit brands’ advertising revenue potential, from missing out on accessing inventory on the open internet, and potentially lower costs with fewer competitors.

What’s the alternative?

Using first-party data–information that is owned and collected by businesses directly from their users or customers–has obvious benefits, but it can also be limiting; only providing insights within a limited pool of people, rather than others who aren’t already aware of your brand or product.

Combine that first-party data with the ability to reach users based on their interest areas, and you’ve got interest-based advertising. 

This might involve contextual targeting, where ads are served based on the content of the webpage that the user is currently browsing. Advertisers can also use ‘cohort-based targeting’, where users with similar interests or behaviour patterns are grouped without explicitly identifying individual users.

Because every business is different, the most successful online advertising campaigns in the post-cookie world will run on a mix of emerging alternatives, including first-party data, interest-based signals, consent, contextual approaches, cohorts, identifiers, and more.

To make sense of it all, marketers need to leverage the technology that simplifies these complex distillations, to obtain the ability to scale advertising outcomes.

Partnerships are imperative in the post-cookie future

Complexities abound as marketing becomes more digital, and the right technology partnerships can be the difference between a business being set up for success or failure when third-party cookies disappear for good.

If ChatGPT has shown the world anything of late, it’s that artificial intelligence (AI) can be used to simplify and popularise marketing efficiency (albeit within limited use cases at the moment).

In the context of advertising, AI can analyse millions of URLs in real-time, using natural language processing to understand the content, and build a "topic map" of the open internet. Marketers can then build and target audiences with relevant messaging at huge scale, based on user interests.

But not every business can invest in its own proprietary AI offering, which is where partnerships come to the fore.

Many ad tech companies today have their own first-party data footprint, and can work with brands, publishers and agencies to augment their first-party data access.

The natural progression to advertising on the open internet

Even though cookie-less solutions are still being refined, they are already showing impressive results. International businesses like Singapore Airlines, for example, were able to drive 29% more revenue and 2.2x return-on-ad-spend by reaching audiences browsing in cookie-less environments.

Global supermarket chain Tesco leveraged AI and machine learning to unlock higher fidelity contextual signals aligned with their customer profiles and saw a massive 63% increase in conversions. This was largely driven by previously unaddressable audiences using Apple devices.

While the future of advertising without third-party cookies is still evolving, advertisers who delay the shift will lose out. The end of third-party cookies will hurt the unprepared, while those already testing and embracing new solutions will gain a competitive advantage.

By embracing privacy-first marketing and collaborating to find new solutions, advertisers can adapt to the changing landscape of digital advertising.

Ultimately, success will depend on the industry’s ability to collaborate, define new industry standards, build trust with users and deliver ads that are relevant and respectful of users' privacy.

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