By Allan Tinkler
As anyone knows, the demise of third-party cookies (3PCs) will be the reason first-party data (1PD) takes over digital marketing. Right? I mean, 3PCs have been the glue that has enabled third party companies to collect data from any site and then use that data to make powerful buying decisions on another site. So, surely the loss of that glue means data has to stay with the site it’s been collected on and therefore that first-party data becomes very important?
Well, in theory this all makes sense and it’s understandable why publishers heralded the loss of 3PCs as an opportunity to shift the power back to them as the ‘custodians’ of their audience’s data. However, the reality is a little different.
To fully understand the challenge, we need to consider what 1PD is and why it’s so important. The sport publisher collecting data about their reader browsing sport content or a retailer collecting data about customers purchasing beauty products on their site are examples of 1PD collection. Just like 3PCs, 1PD provides an understanding of a consumer’s behaviours, interests, intentions but only on the domain where it was generated.
Where expectation meets reality
But this is where it gets tricky. For 1PD to be useful it must be made available to inform the advertiser’s buying decisions.
So how can publishers make 1PD available to third parties in a way that is:
a) compliant with privacy regulations
b) compatible with the browser technologies
c) scalable?
Marketers and publishers wanted to use this rich data to grow their business and fund their sites. Without the 3PC glue to connect everything together, they have the challenge of finding other ways to power a 1PD strategy.
The biggest challenge is the current programmatic workflow (SSPs to DSPs), because they need a common identifier to track users and to target them with ads. They do this by matching a user with an ID, this was typically a 3PC, but could now include alternative third-party IDs such as fingerprinting, probabilistic IDs and deterministic IDs. If 1PD is shared with the SSP and DSP, for instance as a first-party cookie or a publisher-provided ID, it will be unrecognisable to them (i.e. unmatched) unless it is shared alongside some other ID that they recognise (like a 3PC or an alternative third-party ID). Without them, publishers’ and advertiser’s valuable first party data is essentially useless and deemed to have no value by the SSP and the DSP.
The only exception to this rule is if the 1PD is a signal that remains constant across domains and devices, like email addresses. But this does not solve the scale, data leakage and the compliance problems. For example, a marketer understands 100% of its audience using 1PD methods and uses deterministic alternative IDs to ‘find’ those users on the open web, the match rate for these IDs will be at best 20% (and I would also be asking how many of those matches still use 3PCs).
The economics of ad tech models mean that SSPs are designed to optimise towards highest yielding inventory and to filter bids towards those goals. DSPs are designed to optimise towards traditional DSP signals that support their matching table, this helps them to drive performance.
Both of these commercial models are understandable. However, these models are built to put inventory quality/value decisioning into the hands of ad tech and not being dictated by the publisher’s or advertiser’s 1PD.
First-party data should be ID-less data
To create a scalable, privacy-friendly alternative to current ad tech, we must develop a system that doesn’t rely on matching tables. Anonymised’s ID-less audience targeting offers a solution that can help advertisers and publishers leverage their valuable first-party data without compromising privacy. By rethinking how SSPs and DSPs determine inventory value, we can improve ad targeting without relying on matching tables.
Ad tech commercial model means it is primarily focused on maintaining historical tracking methods (like cookies and alternative IDs) rather than developing new approaches that prioritise 1PD. This means the industry is more invested in creating a new tracking system than in finding ways to leverage 1PD directly.
The solutions are out there today. Companies like Anonymised are making 1PD audiences available via the programmatic pipes. While SSPs and DSPs are engaging with privacy-enhancing technologies (PETs) to find ways to make ID-less audiences available for buyers.
As I reflect on the current state of ad tech, I’m concerned about the industry’s trajectory. The rush to replace third-party cookies with alternative IDs seems short-sighted, placing an undue burden on publishers and advertisers to provide deterministic first-party data signals such as email addresses. This approach not only disregards warnings from regulatory bodies but also fails to address the rapid decline in available signals.
Most troubling is the potential devaluation of a significant portion of the open web. With nearly 60% of quality content becoming unaddressable, we risk creating a vast ‘valueless’ landscape in the eyes of ad tech. This situation favours walled gardens like Google and Amazon, which possess unmatched logged-in user bases.
The race for cookie-like signals seems destined to further entrench the dominance of tech giants, leaving independent publishers struggling. As we move forward, we must critically examine our strategies and prioritise solutions that preserve the diverse, accessible nature of the quality open web while respecting user privacy and regulatory concerns. The future of digital advertising depends on our ability to innovate beyond quick fixes and short-term gains.
Allan Tinkler is Commercial Director at Anonymised. For more information visit: anonymised.io
