Welcome to the cookieless and privacy-friendly world

Despite small differences, data protection regulations around the world have a common purpose: protecting the privacy of users. Another radical change that has affected the advertising industry is the policy of third-party cookies, which are regulated according to privacy regulations.

The new regulations caused great concern in the advertising industry. This regulation means marketers will no longer be able to collect users’ data the way they used to. Many companies rely on the collection of third-party cookies. Facebook issued a warning that the impact could result in a double-digit drop in ad revenue. Even today, most MarTech companies still rely on cookies in some form. Google announced in January 2020 that it would remove third-party cookies from Google Chrome in 2023 (the date has since been pushed back). So what is happening in the industry in 2022?

Cookieless world

Cookies are a relic from the desktop world. They’re a “simple technology” designed to collect vast amounts of data about users’ online behavior, which brands can use to learn more about their customers and create targeted offers for them. But at what price? Today, customers are more concerned about who is collecting their data, what part of their life is being tracked, how companies are using that information, and who they are selling it to. The main problem with cookies is not personalisation: customers do not mind receiving advertising and product offers that suit their needs. The main problem lies in breach of confidentiality.

In a visionary move by our founder Mark E. Forster, Adello has developed targeting technology that does not rely on cookies since inception (2008). His insight that mobile marketing deserves a better solution than the prevailing “desktop goes mobile” approach, which relies solely on cookies and clicks, stems from his background in app development and his keen interest in data analytics. This decision turned out to be the right one as cookieless approaches are in demand by all major MarTech companies today.

Because with good reason, authorities around the world consider third-party cookies to be unethical and contrary to their privacy laws.

What changes can be expected in a world without cookies and what will be the policy for third-party cookies?

The new regulations require users to be asked for their consent before their information is accessed or stored. The principles of user consent are freedom, specification of information and the explicit consent of the user. EU data protection authorities are aware that restricting third-party cookies can complicate the work of companies that have previously used this technology. Therefore, the authorities have published recommendations on alternative methods to obtain user consents.

EU recommendations

Previously, when browsing websites, users could see a pop-up banner where they could choose to accept or decline cookies. However, in doing so, users received little or no additional information about the cookie policy. Now EU websites are supposed to meet the following three conditions:

    • Users must be informed that the website uses cookies
    • Information about how cookies work must be provided
    • User consent must be obtained before storing cookies on the device.

Many companies have already started to customize their websites. According to the report, news websites are already using 22% less cookies. However, the majority of websites still use third-party cookies and are not yet GDPR compliant. Advertisers who work with non-compliant publishers put themselves at risk.

alternatives

We are currently seeing that the era of cookies is coming to an end. However, that doesn’t mean companies have to move away from personalization. Rather, it is time for marketers to find an efficient yet ethical approach.

The good news: There are several effective alternatives. So let’s look at the options:

1) Probabilistic methods

In probabilistic methods, the systems collect different types of data points in order to identify the personality as best as possible. This is typically accomplished through a combination of observed behavior and “soft identifiers” that include device type, websites visited, on-site behavior, and IP address. This method aims to enable tracking and attribution.

Deterministic data is difficult to collect. It may happen that the technical systems are not able to assign identities. The reason for this could be that the user is not logged or certain deterministic data is not available. Another challenge is that good performance can often only be achieved by identifying a unique user. Again, this is not privacy compliant (PII). It’s a fine line that companies like Drawbridge in the US and, more recently, 1+X in Switzerland have to walk.

It is still unclear whether these solutions are entirely “non-cookie based” or if they are more of a combination of methods. One thing is clear, however: probabilistic methods are technically demanding, and the resulting results are inconsistent at best. Many first-time customers have turned away from probabilistic methods in recent years.

2) Unified ID 2.0

As part of the partnership with Unified ID 2.0, Trade Desk has developed its own solution for the post-cookie era. Because popular web browsers like Safari, Firefox, and Google Chrome reject cookies, Iteration 2.0 will replace the use of third-party cookies with hashed and encrypted email addresses.

The developers claim that this ID will remain open and, moreover, will bring significant improvements in consumer privacy protection and transparency. This framework can be used by all companies, not just those who work with The Trade Desk.

However, this method also reflects the functionality of cookies. Because of this, Google criticizes Unified ID 2.0, claiming that it may not be a sustainable long-term investment.

3) Advertising ID Consortium (mainly IDentity Link IDL by LiveRamp)

The Advertising ID Consortium is an open and independent group run by representatives of well-known AdTech companies such as Index Exchange, LiveRamp, The Trade Desk, dataxu.

The Advertising ID Consortium provides privacy-aware and people-based interoperability for the advertising ecosystem. The method they propose is to use cookies ID via AppNexus’ domain as well as a personal identifier provided by LiveRamps Identity Link. The idea is to hash login email data. The same hashing method should also be used when a user receives a promotional email and clicks on a link. This hashed information creates an ID, which is captured in local storage and turned into a first-party cookie.

As with the previous method, the disadvantage here is that cookies are also used.

4) Apple SKAd Network

Apple offers a number of solutions, one of which is SKAdNetwork (or SKAN). SKAN enables an exact allocation of app installations. This framework has three main components: the publishing app, the ad network signing the ad, and the app ad. It is important to understand that the whole process is unrelated to Apple’s Device Identifier for Advertisers (IDFA).

After the release of iOS 15, the new forward-looking SKAdNetwork appeared. A number of developers and marketing measurement platforms such as Appsflyer, Adjust, Kochava, Branch and others will be able to obtain SKAdNetwork, install validation postbacks and run their campaigns on their own.

However, SKAN has several disadvantages. First, it only works for in-app purchases, and second, it’s designed exclusively for iOS. Also, the data presented is limited to 100 campaigns for an app or network. However, Adello uses SKAdNetwork for in-app solutions and considers this framework to be reliable and future-proof.

5) Adello: AdCTRL & Adello Instant Classification “AIC”

Adello has always been committed to protecting user privacy. We comply with all applicable data protection laws, including the European Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and the Brazilian General Data Protection Act (LGPD).

Adello operates AdCTRL, a transparent and neutral mobile advertising platform. AdCTRL is based on Adello’s patented real-time AI technology.

in summary

Today there are even more alternatives and more innovative approaches will soon be developed as the demand for cookieless solutions increases. Getting rid of third-party cookies is not the end, but the new beginning of a more ethical, sustainable and privacy-friendly approach to marketing. The most important thing is to act quickly and adapt before tougher laws come into force. This is the only way to save time and gain a competitive advantage.