The crumbling future of the cookie

As privacy regulations and tech giants throw a spanner in third-party cookies’ advertising works, publishers seek new ways to monetise their content.

The cookie was born out of the mind of Netscape engineer Lou Montulli in 1994, as a tool to help websites remember user data. And cookies still perform this function to this day, allowing users to forget complicated passwords and what they put in their shopping cart the night before. However, it only took one year before Montulli’s creation was used for targeting and tracking users across the internet, much to the delight of the advertising world. Adtech firm Doubleclick was founded in 1995, quickly becoming the pioneers of ad targeting online. Google acquired the company in 2008, and the rest is history.

Big Tech in the lead

In recent years, users have become more aware of how companies are following their every click. Who hasn’t briefly entertained the thought of buying a new pair of shoes only to be followed by advertisements across platforms for the following month? The growing fear of what ad tracking means for online privacy has led lawmakers to pass legislation that protects users, Europe’s GDPR laws being a primary example. But most effective measure in terms of stopping the third-party cookies in their tracks has been the work of Big Tech.

While smaller browsers including Firefox and Safari blocked third-party cookies back in 2019 and 2020, respectively, it wasn’t until Apple and Google announced their intent to do so that the world of publishing and advertising quickly realised the need to change. While there is, of course, widespread skepticism about tech giants like Google and Apple having the mandate to enact changes that will disrupt entire industries, the change is already taking effect.

Apple has already started requiring its apps to request explicit consent to track users across devices. Google is working to create an alternative solution to ad tracking. What that alternative will look like is indeterminate at the time of writing. Google’s first plan was to implement FLOC (Federated Learning of Cohorts), which would assign opaque numerical cohort IDs to websites and people. After facing backlash from the advertising industry, Google’s looking into alternatives, such as assigning topic categories to users instead. But no matter the solution Google selects, the result will be more or less the same: publishers and advertisers will have to change the way they work.

Many different solutions will come

Some publishers have taken the matter into their own hands. In 2008, Schibsted launched its own first-party data program for direct-sold ads, a strategy New York Times also adopted in 2020. Vox Media launched Concert Ad Manager, a self-service tool enabling brands to create and deploy advertising campaigns across Concert, the publisher-led marketplace it co-founded in 2016. Other publishers have seen success in going back to older strategies like contextual advertising. Schibsted is one such publisher, as it will increase its focus on first-party data and contextual advertising.

Furthermore, Schibsted has launched Schibsted Match, a type of targeted advertising where advertisers can deliver customised messages directly to their customers on Schibsted’s websites.

We expect to see many different solutions contribute to the death of the cookie; some publishers will likely simply follow the lead of Google, while others will have more success in creating their own solutions. The past two years have also proved to many publishers that they will have more success by focusing on subscriptions rather than ads, even though subscription growth has plateaued somewhat following the surge during the pandemic. In the end, it’s the publishers who invest in diversifying their revenue streams who will most likely come out on top, no matter how the cookie-free future of advertising pans out.