Despite their many faults, third-party cookies had a lot to recommend them. As we quoted John Goulding, head of strategy, U.S., at MiQ, a programmatic media company, saying in an earlier installment in this series, cookies have been “a tremendously sophisticated marketing tool where we have highly addressable advertising that’s incredibly accountable. You can measure it. You can optimize it in flight. You can deliver campaigns to just the audiences you want to reach.”

Just as importantly perhaps, cookies were platform agnostic. They were pluralistic. They were, says Goulding, “a great leveler of perspectives” because any ad tech company could use them to create addressable campaigns that were measurable. When they go away, which, according to Google’s January 2020 announcement, will be sometime next year, there will, all of a sudden, be specific identity assets that will look really dominant—and those assets will be sitting with the Big Tech players—Google, Amazon, Facebook, and Apple.

For a long time now, it has been impossible to do advertising without working with these major companies. And during that time, these tech giants have acquired advertising technology that they have, as Goulding puts it, “intelligently coupled with their media and data assets to create walled gardens.” Understanding that it’s already difficult to run a campaign without relying on these companies’ media properties, he says, is “an important backdrop to consider because they actually have some fairly compelling answers to the identity crisis that is almost immediately due to their powerful assets.”

Within these walled gardens, Goulding believes, advertisers are likely going to be able to do a lot of the things they’ve always been able to do with cookies, but using, for example, Chrome identity or Amazon Prime identity.

Fragmentation: Back to Square One

And this translates as increased fragmentation. “You’re now in a world where Google tech is the best way to buy Google and Amazon tech is the best way to buy Amazon and so on,” Goulding notes. “This puts us back to square one in terms of having quite a fragmented buy. And now you have to start trying to solve problems about frequency capping across these buys or making sure you’re maximizing your budgets to get incremental reach across these platforms.”

During the heyday of cookies, an advertiser could reach an addressable audience because all of the people who were using Google were also using other websites. But now, Goulding says, “if you’re thinking about reaching anything close to the total addressable audience for a given campaign, the identity data that sits within these companies makes you realize you have to be buying within many or even all of them to achieve that reach.”

“You start to have a less plural internet in terms of the content that is gaining advertising dollars. The internet becomes a less open space for advertisers—and potentially for consumers as well.”

For an advertiser in the post-cookie world, then, the easiest thing to do would be to forgo a portion of the audience for what Goulding calls “the simplicity of just using one or two of these massive platforms.” However, he notes, that path is not without risk. “You start to have a less plural internet in terms of the content that is gaining advertising dollars and the impartiality you end up with when you’re looking at measurement and the verification of ad quality and effectiveness,” he predicts. “The internet becomes a less open space for advertisers—and potentially for consumers as well. I don’t think anyone wants that.”

Goulding says that he “wouldn’t blame anyone right now for sensing that this all feels quite fragmented. The reality is that it is just that.” The question will be “how do you piece together the jigsaw. This is what we increasingly need to be focused on.”

The Search for Balance

The good news is that the Big Tech companies seem to understand the limitations of their walled gardens and the impact that the death of cookies will have on brands looking for more of a plural reach.

So while Google for example, has created what Goulding calls “amazing ads through their walled garden, their own technology,” they are also, in parallel, trying to build an option for the open internet through Chrome Privacy Sandbox. This, Goulding believes, “would, in theory, replace cookies with another form of leveler for the open internet to have a go at.” In addition, he notes, Google will also provide some APIs to create the opportunity to replicate some form of measurement, audience targeting, and customer remarketing.

But Google is not doing this in a vacuum. As Goulding reports, there is dialog taking place, particularly around the Privacy Sandbox because it’s been conducted in an open-source manner. Chrome has released some of their ideas, and the ad tech industry has responded in kind. Now, says Goulding, “we’re seeing some evolution in Chrome’s thinking, with proposals that are responsive to what the industry has been asking for. While some may say they haven’t gone far enough, they do have a tough balance to strike between protecting their consumers and facilitating a healthy advertising ecosystem.”

“While Google’s initial proposals were less customizable and transparent than the industry would have wanted, a lot of the feedback has been focused on trying to create more balance.”

How do you protect consumer privacy and achieve what Goulding calls “a level of courtesy” at the same time that you allow companies to have more control and build proprietary solutions in the advertising space? Google’s initial proposals were very rooted in giving Chrome control and were less customizable and transparent than the industry would have wanted. A lot of the feedback, Goulding notes, has been focused on trying to create more balance.

Keeping the Playing Field Level

There are also antitrust issues to consider, especially when you look at recent developments in Europe. Part of the balancing act, Goulding notes, “is to make sure that Chrome isn’t either deliberately or accidentally creating an uneven playing field.”

All of this is a start—but it doesn’t solve the problem. Even Chrome’s Privacy Sandbox is just one browser, Goulding points out, “within one form of advertising, which is web-based advertising. You need to think about Safari—and non-web-based environments. That’s where there’s going to be a lot of analytics work to be done. A lot of programmatic practices will need to stop and automate the use of the multiple platforms in parallel.” Much consideration, he says, will be given to data clean rooms and bunkers, “ways in which we can safely share information, potentially from two different environments, to gain aggregated insights and use that to optimize a plan.”

In the next installment of this series, we’ll dig into how the independent ad tech community is working together, across the industry, to drive the future of open identity.