Cookies Crumble, but the Open Web Stands Strong: A New Era of Digital Advertising
There is a prevalent belief among some in the digital advertising industry that the end of the third-party cookie, without a suitable replacement, will cause the open web to crumble.
The argument is that without data-driven programmatic ad targeting, publishers won't be able to make money from their content or audience, and the free and open internet will suffer as a result.
According to McKinsey, many publishers, especially those considered "non-premium," rely on third-party targeting for the majority of their advertising revenue.
These fears about the "cookie apocalypse" have prompted a flurry of activity as adtech providers race to reinvent the third-party cookie before it's phased out by Chrome in 2024.
They are exploring the use of hashed emails, mobile phone numbers, and other data points to replicate the cookie's functionality, thereby allowing advertisers to track consumers across digital properties and target them at scale.
Some argue that consumers need these technologies to ensure the survival of the open web as they know it.
However, the open web was thriving long before the advent of cookie-style programmatic targeting, and it will continue to do so in the absence of cookies.
Premium publishers will rely more on direct sales, which will enable them to retain a greater share of their advertising revenue. Automation will still help long-tail publishers to monetize their content.
In fact, the quality of content on the web may improve because it will become more challenging to monetize clickbait.
The Open Web Prospered Well Before Cookie-Style Targeting
Before the rise of programmatic ad targeting, the open web flourished as publishers found innovative ways to monetize their content without relying heavily on third-party cookies. They exercised greater control over their ad revenue, hired larger teams, and produced high-quality content.
Despite the existence of walled gardens like Google, publishers thrived by providing targeted audiences and high-quality environments, earning the trust of their readers. They relied on a combination of a few ad networks for backfill and a robust direct sales business model.
Due to their emphasis on direct ad sales, publishers retained a greater portion of their ad revenue, which enabled them to finance and deliver the top-notch content that readers enjoyed.
Premium and High-Quality Long-Tail Sites Will Weather the Cookie Storm
The impending demise of third-party cookies doesn't mean that premium and high-quality long-tail sites won't need to make any adjustments to their advertising strategies. Publishers may need to redirect some of the fees they currently pay to intermediaries who facilitate third-party data-driven targeting toward expanding their direct ad sales businesses.
However, the shift toward direct advertising will ultimately benefit both publishers and advertisers. Publishers will be able to generate higher revenue per transaction and offer more unique and proprietary audience-driven targeting options. Advertisers, on the other hand, will be able to allocate a greater proportion of their advertising budget toward media, rather than paying intermediary technology fees.
Moreover, long-tail sites will still have a place in the post-cookie era, thanks to automation.