Open Auction in the Light of 3rd-Party Cookies Removal in Chrome

How will premium Publishers look to navigate the change? What will be the future of Open Market following the demise of 3rd party cookies? Will Programmatic spend move to PMP/PDs? Finally, what are the major proposals for how the industry can continue to show consumers relevant ads and measure the effectiveness of marketing campaigns without relying on 3rd-party cookies?

Google announced in January 2020 that it would stop supporting 3rd-party cookies in Chrome within two years. Later, in June 2021, it was announced that the removal of 3rd-party cookies would be delayed till late 2023 – almost 2 years later than the initial deadline.
Given the uncertainty surrounding identity and privacy regulation, Publishers and demand-side buyers will be under pressure to find a new and viable alternative to targeted inventories in the coming months.

The role of Open Ad Exchange in the changing ad tech ecosystem

The Open Market, with the availability of inventory and fuelled by 3rd-party data matching, was a catalyst for benefits such as real-time actionable insights, increased efficiencies, market transparency, and technological advancements. It comes then as no surprise that it has driven the majority of digital ad spend.

There are a number of Publishers who solely rely on the Open Market as their main revenue source. This is true especially in the case of smaller Publishers who do not have the same leverage and connections as bigger Publishers. Others utilize different methods of media selling, combining Open Auction, PMPs, PDs and directs. That being said, Open Auction remains an important revenue source for the majority of Publishers around the world.

Following Google’s announcement about the depreciation of 3rd-party cookies, we have seen two distinct attitudes on the market, with some Publishers believing that the inventory sold via Open Market will decline over the next several years, and predicting a move to more direct deal-based campaigns with more guarantees; and other Publishers expecting Open Auction to continue to thrive with the Unified IDs being built collectively by the industry; with advancements in contextual targeting & the brand safety / inventory controls being built by the IAB.

Let us address this concern to help Publishers guide the change and achieve the optimal solution.

Will brands and businesses move away from Open Auction to access Publishers’ inventory directly?

Definitely, Publishers’ 1st-party data will become increasingly valuable with the end of 3rd-party cookies. Publishers able to activate 1st-party data on their inventory will be able to leverage this information in order to help Advertisers target their audiences. Larger Publishers may be able to increase their revenue by charging more for ads that target their large audiences using 1st-party data. Smaller Publishers, on the other hand, are less likely to have developers on staff who can build up a 1st-party data offering, salespeople who can knock on brands’ doors and offer direct ad deals; or achieve a scale that would justify a brand cutting deals with them.

To summarize:

• To manage 1st-party data, Publishers need to dedicate resources so it will be a solution only for those with bigger scale and know-how.
• To monetize it as a premium, Publishers will also need to hire or allocate additional sales resources
• On the demand-side, it is also hard to predict if the resources to purchase inventory more based on deals or direct sale will increase (to whitelist deals or manage the sales process).
• There are still some shortages, as not all users will be profiled properly; still there will be those entering the content from different devices, who will be tough to associate with a specific segment.
• The process of FPD adoption and connecting it with Direct Sales is pretty long and complex (from the technology and sales perspective), the buy side also needs time to gain confidence in Publishers’ data and their new processes.
• Yet, for those with resources and not yet advanced in their 1st-party data strategy, it might be high time to investigate the topic and work on a long-term strategy.

Having this in mind, we can name the biggest advantage of the Open Market. There are hundreds of thousands of Advertisers to be found on this market. As mentioned earlier, setting up Direct and Programmatic deals for all of them would require large product and sales teams. The solution is likely to be found in a diversified approach that combines a number of strategies and methods of media selling, including Open Market whose goal has always been to expose Publishers’ inventory to the largest potential pool of advertisers. This will be especially important for Publishers who lack the necessary infrastructure and resources needed to manage deals and negotiations.

What should I do as a Publisher in order to prepare for a Chrome without 3rd-party cookies?

Wonder no more. Identity Guide is here to help.

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Access the Identity Guide

The advantages of the Open Market include:

It offers scale and a multitude of users which translate into coverage – the crucial goal for all Advertisers. Another advantage comes from its diversified context. There are also important developments in user identifying alternatives:

• Universal IDs – a whole new set of identifiers of all kinds (deterministic, probabilistic and hybrid) that will work across the domains of different Publishers, something that will not be achievable with the 1st-party data of a single Publisher.
• Privacy Sandbox FLoC by Google that has a large share of small and medium publishers and should serve also their needs
• it seems that Advertisers are open to alternative ways/solutions of identifying users. It may turn out that they will get the same ad targeting efficiency using FLoC as they would from the 1st-party data, which may also impact their readiness to pay more for premium deals.

The market is changing very rapidly and it is important to monitor all the developments in order to update the strategy accordingly. There are three major proposals for how the industry can continue to show relevant ads to consumers and measure marketing campaign effectiveness without relying on 3rd-party cookies. Google is pushing for a browser-based tracking model; Publishers and brands are developing ad models that rely on their own 1st-party data; and some ad tech companies are pushing for a new type of tracking.

Publishers should value their identified traffic and bolster flooring strategies not to sell their inventory for less.