But if you think that you know exactly what search ads are, and that everything has been already said about search advertising in 2022, then you might wanna take a second to read through this article. 

The programmatic advertising landscape is constantly changing, and so is search advertising.

That’s why below you’ll find a comprehensive overview of the search advertising industry in 2022, as well as industry insights on how to make an informed decision choosing brand-safe and user-friendly ad solutions for your business.

What are Search Ads? 

Search ads are part of programmatic ad inventory, displayed specifically on search engine results pages. Although the most common type of search ads is the search text ads, other types of search-based ad formats are also available. 

This is because search advertising, also known as SEM (Search Engine Marketing), PPC (Pay-Per-Click), or CPC (Cost-Per-Click) includes various ad formats, such as search text ads, product listing ads, search tiles, or search autocomplete ads. Basically, all kinds of sponsored ads that are shown before organic search results. 

Search Engine Text Ads (eg. Google Search Ads, Bing Search Ads, etc.)

Search engine text ads are probably the earliest form of search advertising. They’re displayed right on the first page of the search engine results, just above the organic results. To help users understand that what they see on top of the page is actually sponsored ads, search text ads have this additional information included right next to them. For example, Google search ads are simply marked with a small “AD” tag.

Product Listing Ads (eg. Google Shopping Ads, Facebook Shopping Ads, etc.)

Product listing ads are the second most popular type of search ads. The main difference between product listing ads and regular search engine text ads is that they provide users with key product information on the go. This allows to shorten users’ path to conversion and help them make the purchase decision quicker. This is also why product listing ads are often referred to as shopping ads or dynamic product ads (with Google, Facebook, or Instagram shopping ads being the top players). 

Search Tiles Ads (eg. NewProgrammatic, Amazon, Chrome, Mozilla, etc.)

Search tiles, sponsored tiles, shortcut tiles, or query tiles are yet another form of search advertising. Search tiles are in fact static ad placements native to the website/app they’re featured in. This type of search ads differs from text or product listing ads not only in terms of a native and minimalistic look (they would only feature a logo or a simple icon-like image) but also in the way users interact with such ads.

Since search tile ads are straightforward as to what they advertise, people looking for a specific brand or product don’t need to get into too many details rather than instantly click on a sponsored tile and visit the advertised website. Even though search tiles may not seem as common as classic search text or product ads, more and more platforms start to offer search tile solutions as part of their search advertising inventory. 

Search Autocomplete Ads (eg. NewProgrammatic, Brave, Opera, etc.)

Search autocomplete ads or search bar ads are, again, yet another type of search advertising available on the market. The most interesting thing about the search autocomplete solution is that it allows marketers to serve ads even before users actually complete their search. This is because just as users start to type in their query into the search bar field, keyword-matching mechanisms serve relevant ads in a form of autocomplete suggestions. To differentiate the sponsored suggestions from organic suggestions, search autocomplete ads are usually marked with an “AD” info next to them — just like classic search engine text ads.  

How do Search Ads work?

Although all types of search ads are user-input-dependent, the mechanisms behind each type of search advertising solution differ depending on its type, the platform that serves it, and the technology used by publishers. For example:

• search engine text ads require different content (text information) and ad delivery technology than product listing (visual + key product information) or search tiles ads (minimalistic visual only).
• search engines like Google or Yahoo offer a broader range of advertising inventory (which also means higher competition) rather than a closed app inventory like Facebook or Instagram (offering better targeting options).
• search advertising platforms differ also in terms of their SSP and DSP relations — some need to work with external and/or direct partners to provide the supply, others rely on their internal user base.
• search ads providers offer various ad bidding models, too, that range from static, waterfall to header bidding (including the real-time bidding model). 

Depending on the search advertising provider, marketers and brands need to comply with various ad serving, bidding, and integrations mechanisms. Each platform should be able to provide extensive information on how their search inventory is monetized, served, and optimized for the best performance. So, once a given brand or marketer makes a decision on who to work with, they should contact their platform of choice directly and comply with offered formats, or ask for custom monetization solutions if needed. 

Where to run Search Ads campaigns? Top Search Ads providers.

The common misconception regarding search advertising is that it is only possible with search engine platforms. And although at the dawn of advertising times search ads may have been limited to platforms like Google or Yahoo, the programmatic reality has changed entirely. 

Now, search ads can be run not only with the biggest players in the online advertising space but also with more specific or niche-related platforms allowing for precise user targeting. To help you decide on the best partner for your search ads campaigns, have a look at the following overview of top search advertising platforms

NewProgrammatic

Let us begin with our domestic solution. Why we do it is because, in our humble opinion, NewProgramamtic really is a performance marketing platform that’s designed to capitalize on customers’ intent before they even get to the search results page. Hence, ultimately shortening customers’ path to the searched brand and giving marketers a headstart with their campaigns.

What NewProgrammatic search advertising platform does is help match an already engaged audience with ads featuring relevant content thanks to direct integrations with top publishers in the e-commerce, fashion, beauty, or travel industry (including search engines, apps, marketplaces, etc.) — all done in brand-safe and cookieless way.

NewProgrammatic offers a self-serve platform across our two flagship ad formats — Search Autocomplete and Search Tiles ads (both working on a CPC basis) — as well as custom-made solutions. 

You might be surprised to see some of the world’s largest brands rely on NewProgrammatic ad serving technology, but just as the ad-tech world changes, so should brands’ search advertising strategy. Especially given the recent shift towards vertical marketplaces observed among the purchase-ready customers. 

Remember you can always book a discovery call with our programmatic experts to see how NewProgrammatic can help your business.

Amazon

Amazon Search Advertising platform is by far one of the most powerful ways to utilize search advertising. Just like with Google ads, whenever users input a keyword into the search bar on the Amazon website, the top results would usually feature sponsored listings marked as ads.

Advertisers choosing to promote their products on Amazon can choose from sponsored product ads, headline search ads, as well as product display ads. Given that Amazon is able to power its advertising algorithms with the actual buying data, the Amazon user targeting system is believed to outdo Google’s AI and provide even better results to both advertisers and users alike. 

Interestingly, what NewProgrammatic and Amazon advertising solutions have in common is that both operate within closed marketplace ecosystems — Amazon ads being native to its own marketplace platform, and NewProgrammatic enabling search advertising for various types of marketplace platforms, e.g. BNPL apps, coupon sites, etc.

Google Search Ads

Google Search Ads platform is the largest search ad provider offering a number of ad formats across all types — search text ads, shopping ads, banner ads, video, etc. Which doesn’t come as a surprise given that Google is the largest search engine in the world, too, occupying more than 90% of the market. 

But being the biggest search ads provider also means that the competition among Google advertisers is just as high as the volumes of available traffic. That’s why advertisers need to be either very careful with their budgets running such broad campaigns, or need to be really skilled at precise campaign targeting among google search results. Especially given the Google Ad Rank mechanism and the second-price bidding system that makes the competition even tighter, and Google a bit picky when it comes to ad exposure. 

Apple Search Ads

Apple Search Ads, though a little different from other search ad solutions listed here, are undeniably an important part of the search advertising landscape. Apple search ads focus on mobile app advertising only, helping app owners reach highly interested and well-targeted audiences. Additionally, Apple App Store is reported to outperform Google Play in generated revenue even though Google Play may be generating double the downloads count. 

This proves that a limited reach, yet targeted at a higher-income and brand-loyal segment of the audience may actually turn more profitable even at a much smaller scale. 

Microsoft Bing Ads

Microsoft Bing Ads, previously known as Bing Ads, work on a similar basis to already mentioned Google Search Ads. Both ad formats work on a second price auction system and are powered by keyword input based on user searches in the Bing Microsoft browser. 

What’s important to note is that although Google holds the majority of the market share, Microsoft Bing Ads amount to 12 billion monthly searches globally. Such results prove that even a much smaller audience (in comparison to Google’s 90% market share) can still feature significant numbers of potential users. According to Microsoft Advertising Platform itself, importing your Google Ads campaign to Microsoft Ads allows you to reach up to 44 million US desktop users that Google won’t reach. 

Microsoft Bing Ads inventory includes text ads, app install ads, dynamic search ads, product ads.

Yahoo Ads

Yahoo ads cannot be discussed here without mentioning the Verizon Media Group cluster consisting of the Yahoo Gemini platform, as well as other Verizon properties like AOL, the Huffington Post, TechCrunch, and many others. Another point to note is the arrangement between the Verizon Group and Microsoft Bing ads, stating that the extended partnership will make all Yahoo search inventory available through the Bing Ads platform, while Bing Ads will continue to serve all AOL search inventory, according to the Search Engine Land article. 

What seems like an interesting partnership in terms of the search advertising industry is naturally a strategic move in cutting down on any share of Yahoo search inventory that Google may have served prior to the agreement. 

The Yahoo Gemini platform delivers various search ad formats across text, image, video as well as app environments, and thanks to joint partnerships is able to serve billions of ad impressions to users around the world. 

Yandex Ads

Yandex Ads are offered by one of the largest ad-tech companies, and one of the main search engines in Russia, which is often considered to be Google’s counterpart in that region. So, if a brand wants to tap into the Russian audience segment, then Yandex ads become a natural choice.

Offering a number of PPC ad formats (banner ads, video ads, ads for mobile apps, dynamic ads, text and image ads, and naturally – search ads) across various devices (website, mobile apps, smart TV, and video), Yandex manages to attract billions of monthly users securing its spot as one of the top search advertising platforms in Russia. 

And even though the American tech giant may not like it, Yandex keeps growing as a company working on developing its own technological solutions to help performance marketers reach their goals and attract an even bigger share of the Russian audience. 

Baidu

Baidu Advertising is yet another example of how a region native advertising platform/search engine takes priority over the global solution. 

That’s because the Baidu search engine, and hence its search advertising platform, is a Chinese counterpart to Google  — just like the Yandex Ads in Russia. Only looking at the Chinese search engine market share split, Baidu holds over 76% of it (leaving Google far behind) though it is, in fact, limited to the China region alone. 

The way the Baidu PPC search advertising network works doesn’t differ much from Google, Yahoo or Yandex solutions, offering extensive targeting and tracking options for all the available ad formats. These ad formats include Baidu search, display, in-feed, and brand ads.

DuckDuckGo

DuckDuckGo Search Engine is a privacy-focused search engine solution created in response to the growing concerns regarding how user privacy is handled by global tech giants like Google or Facebook. Since its inception in 2008, the DuckDuckGo search engine kept growing its privacy-concerned audience and hence reached over 90 million daily queries in October 2021, placing itself as one of the major competitors to Google on the US market. 

It’s important to note, though, that DuckDuckGo advertising operates via the Microsoft Advertising platform, just like the Bing or Yahoo ads. Nevertheless, DuckDuckGo protects user privacy by withholding any user-specific information. Its advertising solutions are based on keyword matching alone, which provides intent-based ads in a user-friendly form — similarly to NewProgrammatic. 

YouTube

YouTube Advertising Platform, though coming last in this article’s overview, should not go unnoticed — and that includes all the markets that don’t specialize in video marketing, too. 

YouTube is the second biggest online platform in the world, with over 2 billion logged-in visitors monthly. Also, becoming part of the Alphabet Inc. parent company together with Google, regular Google text ads have also been enabled on YouTube search results based on user keyword input on mobile devices. Apart from Google text ads being visible among the video search results, programmatic video advertising offers yet another stream of profit for performance marketers running Youtube campaigns.

Interestingly, although both platforms — Google and YouTube — fall under the same company umbrella, and both are in fact search engines, there’s a drastic difference between how videos are searched (and the returned results) on both platforms. Also, YouTube is predicted to outdo its sister company (and many others) soon given the increasing shift in user behavior and online trends towards video content, as well as moving away from the broad search engines towards vertical ones. Brand marketers — keep watching. 

Conclusions

The advertising industry has come a long way since its humble beginnings in the print form to the AI-powered global ad-tech ecosystem it is today. And just as the world has changed, so have consumer trends and needs, which both brands and performance marketers need to accommodate. That’s why staying on top of industry trends while ensuring that user-privacy and safety measures are put in place is essential for any marketing strategy to pass the test.

In 2022, more than ever, time and health are more precious than money. This also means that brands wanting to engage in quality relationships with their customers and help them go through the buying process as seamlessly as possible need to take that into account and help improve the process even further. People want to find things fast, and they want the findings to be accurate and relevant. 

That’s why the broad search engine advertising may soon lose to ad solutions that deliver the desired content, only where people actually go look for it.

Wondering if NewProgrammatic is right for your business?  
Book a demo call. Let’s talk.

The post What are Search Ads and How do they work in 2022?<span class="badge-status" style="background:#00e5d1">NEW</span>  appeared first on NewProgrammatic Blog.

The digital marketing landscape has indeed changed a lot in the last decades, and online advertising is now facing a new era. So, what is the future of programmatic advertising going to be like in this new, cookieless world? Let’s find out.

The state of digital advertising in 2021 is looking good

The coronavirus pandemic hasn’t been easy for anyone and 2020 was indeed a challenging moment for the digital advertising industry, too. Still, despite the pandemic and major changes happening to third-party data tracking (that have really put a strain on the ad-tech world for a moment) programmatic came out of the turmoil in a pretty good and unshaken state — while also showing significant growth.

According to Statista, the global ad spend for programmatic advertising in 2020 reached an estimated 129 billion dollars, and is now predicted to exceed 150 billion dollars in 2021. As reported, such growth can be attributed to the rapidly increasing use of software and algorithms that help streamline and automate the ad buying and serving process, thanks to which programmatic has become “one of the most indispensable digital marketing tools worldwide”.

Also, according to IAB Europe and Attitudes to Programmatic Advertising Report 2020, we’re currently experiencing significant investment growth as programmatic budgets continue to increase. The percentage of advertisers who invest more than 41% of their display ads using programmatic solutions increased to 70% in 2020, from 55% recorded in 2019. 

The remaining months of 2021 will probably build even more anticipation for the great third-party cookies phase-out from Chrome, but this should only be seen as means to forming new strategies and adapting to new opportunities brought by the privacy-oriented trends that will continue throughout 2022. 

Overall, with new programmatic solutions emerging on the market every year, as well as brands and marketers increasingly recognizing the potential that lies with data-driven yet brand-safe solutions, the future is looking more than promising for the programmatic industry. 

The end of third-party cookies doesn’t mean the end of ad targeting

Speaking of the long-planned depreciation of third-party data tracking by all major browsers on the market, one thing is clear. The end of third-party cookies does not mean the end of user-targeted advertising. 

What it means is that brands and marketers now find themselves in need of user-oriented solutions that can still deliver desired results, but at the same time meet newly introduced privacy regulations. 

Companies like Apple, Google, and Facebook have naturally followed suit and thus responded with their own ways of enabling advertisers user-oriented ad targeting that doesn’t rely on third-party cookies. Because some of the proposed solutions haven’t been fully released to the ad-tech world just yet, as tech giants are constantly working on improving their post-cookies targeting systems, it’s hard to say which option is ultimately the best. 

Still, the good news for advertisers who have heavily relied on third-party data tracking in the past, and would like to continue targeting users in a similar yet privacy-compliant way, is that there will be ways to secure that kind of supply. And from many possible options, Google’s Privacy Sandbox seems to be at the forefront of a cookieless targeting race. 

Google Privacy Sandbox

The Privacy Sandbox initiative was announced in August 2019 and was first meant to be introduced in 2021. Due to a bigger scope of work needed for the project to fulfill its purpose, earlier this year Google has announced that they’ll be pushing the release date a year later — that is until 2023. 

But why the delay and what actually is Google’s solution to third-party cookies depreciation? 

The Privacy Sandbox by Google is a series of smaller projects and initiatives aiming to enable broad user targeting without third-party cookies or cross-site data targeting that could violate user privacy. What’s important is that the ideas come from other stakeholders in the ecosystem (the W3C group), not just the Chrome team alone. There are over 30 proposals that cover different scenarios, and Google developers are working on the key initiatives to deliver both user-friendly and advertiser-satisfactory solutions. 

The two core elements include:

• Replacement solutions for cross-site tracking that don’t rely on third-party cookies.
• Removing third-party cookies from Chrome completely once new solutions are implemented. 

Thus far, the key initiatives were FLoC (later on replaced by Topics API) and FLEDGE (TURTLEDOVE). 

FLoC (Federated Learning of Cohorts)

One of Google’s Privacy Sandbox initiatives is FLoC, a system of Federated Learning of Cohorst, aiming at creating a privacy-first mechanism for advertisers to target users based on collecting information regarding their interests rather than cross-browser data tracking. 

The way FLoC is supposed to enable Chrome and other browsers in the ecosystem to do that without third-party cookie tracking is the following.

• From the advertiser’s perspective: advertisers should add the FLoC algorithm code to their websites, which will allow browsers to collect the cohort data that can be then shared with various ad-tech platforms. If such a platform learns that a specific website provides a specific segment of cohorts that record shared interests, adequate ads will be served to that cohort. 
• From a user perspective: when a user enters various websites with the FLoC code added, their browser collects information about user interests. The FLoC algorithm then streamlines the interest data collected from various websites and browsers, and assigns interest cohorts to that user, without sharing other user or browsing data. 

FLEDGE (TURTLEDOVE)

To better understand the differences between the FLEDGE and FLoC proposal, there’s yet another term that needs discussing — it’s TURTLEDOVE.

• TURTLEDOVE stands for Two Uncorrelated Requests, Then Locally-Executed Decision on Victory and is more of a conceptual proposal rather than a technical solution.
• FLEDGE on the other hand is the subsequent technical experiment based on the concept of TURTLEDOVE. Similar to FLoC, it also has to do with collecting interest cohort information from browsers using the FLEDGE API.
• FLoC vs. FLEDGE — for the first solution it’s the internet browsers that assigns the cohort to a user. While the second one gives such possibility to publishers and ad-tech platforms, also allowing them to define the events that make a user belong to a specific cohort. So, the two options are similar in terms of creating audience segments and cohort-targeting but differ on the cohort-determination level. 

Topics API

After introducing the FLoC initiative in 2021, Google faced considerable criticism. The privacy-centric approach to tracking was found to have substantial shortcomings, potentially exposing Chrome users to discriminatory targeting practices.

After pushing the project’s launch date to 2022 and then 2023, the FLoC idea has recently been killed and replaced with Topics API.

• In Topics API, each website that chooses to participate would be manually mapped to a topic (based only on domains, not subpages).
• Users would be assigned topics from a limited pool of options (provided by both IAB’s Content Taxonomy and Google’s own review) based on their browsing habits from the previous three weeks.
• Topics associated with a particular user would be shared with each website that user visits to help advertisers show more relevant ads without revealing the browsing history of a user.

Why first-party data are the future of programmatic advertising

As Google pushes the Privacy Sandbox release date forward, brands and marketers are not eager to just sit and wait. Many stakeholders don’t want to be associated with third-party data tracking already, others don’t want to invest in solutions that can soon become deprecated, while others are simply hesitant towards soon-to-be targeting mechanisms that are still quite vague and not fully implemented. So, what’s left? 

The answer is first-party data, a brand-safe and privacy-friendly solution coming directly from users who voluntarily agree to share their data. And given third-party data seems so out-of-fashion in 2021, a new approach towards first-party data advertising has been adopted.

Possible solutions for brands to deliver ads without the use of third-party data tracking are:

• Waiting until Google’s Privacy Sandbox solution is released to the public. 
• Creating their own first-party data collection base.
• Partnering with ad-tech companies offering to enable the creation of such a client base.
• Relying on contextual advertising solutions working on first-party data only.
• Partnering with ad-tech companies enabling both creations of first-party data client base and contextual advertising solutions for brand-safe and cookie-free advertising strategy. 

Digital marketing trends for a cookieless future 

Digital marketing is facing the dawn of a cookieless era. This means that brands and marketers need to focus on both — securing a steady streamline of first-party data or another reasonable solution to track users on a broad scale, as well as tapping into the cookieless advertising trends quickly emerging on the market. 

Since no marketer wants to miss that train, here are our top 5 choices for digital marketing trends in a new, cookie-free world.

Programmatic advertising reigns supreme

As already reported, the prognoses are looking more than good for the programmatic industry in the upcoming year. With the global ad spend estimated to surpass 150 billion dollars in 2021, a 20% rise in marketers who claim to treat programmatic as one of their major advertising strategies, global efforts to establish new ways for advertisers to target their programmatic ads on a large scale without the use of third-party or cross-site data tracking, and even showing significant growth during and post-pandemic, there’s no doubt that programmatic ad serving will reign supreme in 2021 and upcoming years. 

Programmatic brought in-house

Due to advertising budget cuts caused by the coronavirus pandemic threat, as well as the growing accessibility of programmatic solutions for both ad-tech savvy companies and brands that only recently became interested in automated ad buying, programmatic is now being brought in-house. 

It does not mean that each brand is now focused on building their own programmatic platforms — it costs time, energy, talent, and money. But with new programmatic solutions available on the market, it’s much easier to manage the process in-house while partnering up with platforms that have the technology and experience in helping brands make the most of their solutions. 

Growing investment in brand-safe solutions 

As a result of the shift in bringing the online advertising strategy in-house rather than relying on agencies only, as well as new opportunities emerging on the market, more brands are eager to invest in their own programmatic solutions. Also, brands are eager to invest more thanks to budget savings generated thanks to cutting out the middleman. Another explanation is that due to the pandemic, programmatic turned out to be one of the most direct ways for brands to reach their customers. Hence, increased investments into what seemed an only viable option, and has since proven effective — even in the post-pandemic time. 

First party-data over third-party targeting 

Naturally, those in the programmatic industry who want to stay on top of their game have to undergo a major transformation, too. That’s because programmatic advertising in a new cookieless era cannot afford to rely on outdated targeting methods or ad formats that don’t guarantee brand satisfaction. If brands are now looking for new programmatic solutions to meet their customer demand, ad-tech platforms need to do the same.

New solutions for cookieless advertising 

With a proven track record of successful programmatic campaigns through most difficult times, more brands using programmatic in-house, growing investments, and user-oriented changes made globally, the emergence of new programmatic solutions (especially at a dawn of a new cookieless era in advertising) is a natural consequence. Ad-tech platforms are now in for a treat to tap into a whole new demand market, and brands can’t wait for what the tech platforms have in store. 

Contextual advertising is back even though it has never left

Contextual advertising can be described as one of the oldest forms of advertising in general — whether it’s print or digital. And even though it has significantly evolved and transformed into a fully automated process of online media buying and selling, contextual advertising is now back to save the cookie-less world.

In the past years, cross-site tracking and third-party cookie targeting became extremely popular methods of identifying specific users online. Because of that, contextual advertising was moved to the sidelines. But with the recent call for increased user privacy and better transparency in data-sharing practices, major browsers needed to take actions to limit the use of third-party-data tracking. The shift in user privacy has now given way to the advent of contextual targeting — in a new, updated form.  

Contextual advertising can be now seen as a user-friendly and brand-safe way to connect with users based on their choice — instead of breaching user privacy and trust — becoming one of the easiest and most easily accessible alternatives to online advertising in a post-cookie world as reported by Forbes.

It doesn’t involve third-party cookies and is based solely on users’ choice to engage with a specific type of content. The evolved technology helps streamline the most adequate ad matching as well as allows for effective and efficient content categorization. But most importantly, it offers a continued and undisturbed supply of revenue for both advertisers and publishers, as well as a brand-safe and privacy-oriented form of advertising for brands and marketers. 

Brands that use programmatic solutions to up their game

With all the available answers to the problem we’re yet about to face — as third-party data tracking is still possible today, but soon won’t be — brands and marketers are now testing what strategy works best for their needs. And by brands, we mean a variety of products from cosmetics to gin brands. 

According to the Wall Street Journal, Google’s plans to restrict third-party data targeting prompted big brands to revamp their data strategies. This time the brand in question was Bacardi, testing their programmatic alternatives for Bombay Sapphire — one of the most popular gins on the market. After conducting test campaigns focused on targeting anonymized users, the WSJ reported that the brand saw an increase in CTR and cost efficiency while refraining from third-party data usage:

Bacardi says those and other encouraging signs give it confidence in its ability to build its brand and sell products even once it no longer has access to individual ad tracking and targeting technology that Google plans to move against next year.

But not all brands are happy to follow the suit — some try yet alternative methods for user targeting and try to outsmart tech-giants in their customer data collection practices as reported by the Wall Street Journal in their article on sidestepping Apple’s privacy rules. 

Yet for brands in need of cookieless solutions that don’t cause turmoil, we recommend following NewProgrammatic case studies that prove programmatic advertising can be both effective and brand-safe.

How can marketers prepare for a cookieless future?

The rapid evolution of data processing and proliferation of automated ad serving allowed for programmatic to shift its position from means only accessible to those with a strong technical background to a real game-changer available not only for media-buying agencies and advertisers, but also brands who now bring programmatic in-house. 

The digital landscape is constantly changing and tech platforms are now making everything they can to answer the demand for brand-safe and cookieless advertising that will appeal to both users and marketers. 

That’s why the best piece of advice anyone in the programmatic industry can get right now is to look for multiple privacy-oriented solutions to then diversify their digital strategy using both tried and tested, as well as newly emerged strategies to serve relevant ads that users want to receive.

Book a demo & see how NewProgrammatic can help your brand grow in a cookie-less world.

The post What’s the future of programmatic advertising in a cookieless world?<span class="badge-status" style="background:#00e5d1">NEW</span>  appeared first on NewProgrammatic Blog.

After a few years of an ongoing debate as to what should be done about third-party data tracking, one of the big players in the ad-tech world decided to give its users a choice. Apple’s decision to allow third-party ad blockers on Safari in 2015 triggered a whole new approach towards handling consumer data in the advertising world. 

Fast-forward to 2021, the global discussion whether to keep or cease third-party data usage is slowly coming to an end. No one needs nor wants 3rd party cookies to be associated with their brand when data privacy and web safety are at the forefront of consumer-oriented businesses.

Apple, Mozilla, Google, and many others have either completely blocked 3rd party cookies already, or are in the process of doing so. This leaves marketers and brands in need of new programmatic solutions that don’t rely on third-party cookies as well as comply with brand safety and user privacy regulations. And we’re here to tell you more about it.

Why brands and marketers don’t need third-party cookies.

There are many reasons why brands and marketers don’t need third-party cookie tracking to succeed with programmatic ad targeting or media buying. One of them is that relying on third-party data has never been a perfect solution for the ad-tech world.

To better understand the difference between first-party and third-party data tracking without getting into technicalities, it’s enough to think of playing Chinese whispers. The more people pass on the message, the less precise and more faulty it becomes. 

Programmatic ad serving is all about showing the right ad, to the right user, at the right place, and at the right time. That’s why there is no room for mistargeting, which has been one of the main issues with third-party cookie tracking right from the start, even before the consumer privacy and data safety issue has been raised. 

After almost two decades on the market, this method of targeting users has become obsolete and doesn’t meet current trends, nor demand. And given the recent shift in attitudes towards data safety for all Internet users, brands simply cannot afford to rely on outdated solutions. 

The second reason why brands and marketers don’t need 3rd party cookies is that 1st party cookies aren’t going anywhere. This data allows brands to improve user experience, deliver customized content and collect user information needed to nurture its clients down the sales funnel. Yes, 1st party data does come at a much smaller scale but at the same time, it allows for more direct and precise targeting while also ensuring that users receive content they agreed on. 

The third reason why brands and marketers don’t need third-party cookies to succeed in the ad-tech world is that there are various solutions available on the market already, and new ones are being developed as we speak. 

Third-party cookie tracking has never been the only way to reach wider audiences, nor the perfect one. Given the rapid evolution of the programmatic advertising industry, and how dynamically the online media landscape has changed in recent years, alternative solutions for online ad targeting have been already developed, even if not yet globally adopted. 

How to target your ads in a new, cookieless world.

As mentioned, there are ways for brands to target users on a large scale that don’t involve 3rd party data sharing. In that case, why has the news on phasing out third-party cookies by all major browsers wreaked such havoc within the digital marketing community? 

Cookieless identifiers 

Although cookieless ad tracking methods have been indeed available, external cookie sharing became a default go-to method because of its scale and global adoption in the ad-tech business. Due to the recent shift in data collection trends, now seems like an excellent time for brands and marketers to learn more about other options that help identify users and serve them ads that resonate.

Another thing to be remembered is that marketers shouldn’t rely on one method of user targeting only. Using just one channel of communication with potential audiences can never provide all the necessary information, nor answer all of the brand’s needs. The key to a healthy system and a holistic view of one’s audience is relying not on a single but combined methodology. 

Brands and marketers who want to nurture a more holistic view of their customer base need to team up with all the players in the programmatic advertising ecosystem. That also includes partnering up with businesses that have both the technology and experience in delivering desired results.

Cookieless advertising strategies.

Total deprecation of 3rd party cookies will surely affect the whole of the digital industry, yet consequences can be leveraged with several cookieless advertising strategies. Some of the tried and tested solutions include the enhanced use of 1st party data, other forms of cookieless targeting, or going back to long-neglected contextual advertising. 

1st party data tracking

First-party cookies or first-party data has always been the safest and most stable way for brands and marketers to reach their customers. Now more than ever the industry needs to embrace the importance of the direct relationship with consumers and accept what information people actually do want to share and what data they’d rather keep private.

Although this may seem like a limited solution, again, the industry has been evolving as so has the first-party data tracking. Even a simple piece of data like an email address can go a long way in the programmatic landscape, without any mistrust and murky data sharing. 

For that reason, to further enhance the process of 1st party cookie tracking, brands and publishers globally are now working to maximize data collection and improve consumer privacy and data safety in advertising technology (Google Chrome’s Topic API, Facebook Walled Gardens, Apple’s IDFA, LiveRamp).

Cookieless targeting

Given the rising concerns on consumer privacy in the digital age, ad-tech giants rolled out their own cookieless targeting solutions for brands and advertisers that will still allow for reaching large segments of users. Of course, the biggest hopes were put with Google’s FLoC proposal.

The FLoC (Federated Learning of Cohorts) system has been designed specifically to answer data protection concerns and address the user safety demand. 

But how was Google’s FLoC supposed to save the day in the new, cookieless era?

Google’s initial solution aimed to enable ads to be targeted to users based on their web browsing history alone. This would mean a cease to tracking specific actions like user clicks and purchases, which lately has been seen as tactics that breach the level of privacy users should hold while engaging online. Collecting the web-browsing data on a large scale could then allow FLoC to group users into targetable segments, rather than tracking individual users.

This solution, however, was almost immediately rejected by all major browsers. What’s more, the Electronic Frontier Foundation was able to point out a defect in which fingerprinting techniques could be used to distinguish users from the cohort and establish unique identifiers.

Eventually, the short-lived project has been scrapped and replaced with Topics API

What’s the advantage of Topics API over Google’s FLoC?

In Topics API websites are labeled with topics taken from an established pool of IAB & Google-approved topics. The browsers that choose to adopt Topics API will collect information on visitors by saving a short list of Topics attached to the visited sites. The set of topics would then be shared with advertisers to facilitate ad targeting. 

While losing on the accuracy, the Topics API solution is said to be an improvement over FLoC when it comes to user privacy. However, there is a lot of skepticism around Topics API. As reported by The Drum:

 “For some of the large brand advertisers who want to reach broad audiences, this is something, but for the majority, this has no value whatsoever as the category is too broad for their targeting criteria or campaign budgets.”

It is yet to be decided whether Google’s answer to the privacy-first world of advertising in the new, cookieless era will be sufficient. There are a lot of questions still to be asked and answered, and so far the total 3rd party cookies phase-out in Chrome has been postponed until the end of 2023. 

Contextual advertising

Another way of targeting broad audiences without 3rd party data or any specific information on user activity is contextual advertising.  It’s worth remembering that before 3rd party cookie tracking took its momentum, most of the ads served online were context-based. This proves that although data sharing is a vital element of the online advertising ecosystem, it’s not essential. 

Contextual targeting doesn’t need nor involve any specific information on a single user. The three elements for this method to work are:

• page context — allows for understanding the language, whole sentences, as well as word segments. This leads to creating vertical and niche segmentation, which can be used for both targeting or blocking for brand safety reasons.
• user context — this allows to better understand user behavior on a given page, tied mostly to distinguishing between high or low user engagements and CTR rates. 
• request context — allows for understanding more technical aspects of user targeting such as time and geo-location that can be then combined with real-time advertising.

That way contextual advertising allows for broad, non-intrusive ad serving that can also be narrowed down to more specific segments or niches. As with everything in the ad-tech world, context-based targeting has also come a long way since the first banner ads were placed online. But as with every method, there are some pros and cons to it.

The end of third-party cookie tracking is near, and the programmatic advertising industry must prepare for it. This might mean that contextual advertising will once again become a primary choice for many brands and marketers out there, especially those searching for broader reach and large scale for their programmatic advertising strategies.

New programmatic solutions for brands and marketers.

Today’s landscape of programmatic advertising provides brands with a whole array of modern solutions. The challenge that such brands seem to be facing at the moment is making the right choices to meet their advertising goals. But one remains the same, and it’s reaching your customers before the competitors do. 

That’s why delivering brand-safe and user-friendly ads to customers before they even complete their search might be the key to advertising your brand. NewProgrammatic lets you acquire customers through capitalizing on their intent either via Search Tiles or Instant Search Ads that users can engage with right at the start of their customer journey. 

And what’s especially important given recent developments in the ad-tech space, NewProgrammatic solutions don’t rely on cookies or any other third-party tags and trackers. Working with top publisher partners (browsers, search engines, mobile apps, and more) NewProgrammatic ads ensure both scalable performance and protection of consumer privacy, which makes it a brand-safe and future-proof choice for a new cookieless world. 

Conclusions

Digital advertising is facing a cookieless future where privacy laws need to be respected by everyone joining the table — publishers, advertisers, brands, and marketers of all kinds. 

Even when third-party cookies become a thing of the past, precise ad targeting will still be possible, just like data collected from first party cookies will still allow for creating audience segments to better understand consumer behavior and deliver ads that convert. Whether brands decide to engage in transparent advertising that gives consumers the freedom to decide what content they want to receive and what happens with their data is the brand’s call. And for those willing to take up the challenge of the new cookieless era, new programmatic solutions are awaiting. 

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The post Cookieless advertising for a cookieless world — new programmatic solutions. appeared first on NewProgrammatic Blog.

Before the Internet evolved to its present form it was a lot less practical. Each visit was a separate, completely anonymous event. But that didn’t work so well for many sites, especially e-commerce ones. As necessity is the mother of inventions, it was necessary to give the web a memory. 

And thus cookies were created. They allowed websites to keep track of who visits them and what they’re looking at. It wasn’t long before the advertising industry saw the immense potential of using cookies to personalize ads. 

If you’re curious about the peculiarities of cookies and how they transformed the advertising industry, read on and learn how a small text file can cause so much controversy.

What are cookies?

Cookies, often referred to as HTML cookies, HTTP cookies, Internet cookies, or browser cookies, are small text files used to identify individual users browsing the web. They are indigenous to the visited websites and are stored on the user’s computer via web browsers. Essentially, cookies allow each site to recognize a user as the same person that has visited the site before.

In practice, when you visit a website it drops a cookie on your computer. That cookie keeps you logged in and keeps track of your activities (such as setting filters while browsing a store or storing items in your cart). When you visit next time, the site knows it’s the same person again.

Cookies can have different purposes as well. While we’ll discuss the types of cookies in the next section, they all serve one of the following two purposes:

• Managing a single browsing session – these are the cookies briefly described above. They keep track of browsing activities within the same session, thus ensuring a smooth user experience and streamlined e-commerce transactions. 
• Managing multiple separate sessions – these are the cookies that are able to identify an individual user over multiple separate sessions. They’re used in cases such as keeping users logged in or saving browsing preferences and history. 

What are different the types of cookies?

Apart from the most popular distinction into third-party and first-party cookies (to be discussed below), HTTP cookies can be divided by the period of activity.

Session cookies – also called transient cookies or temporary cookies, last only one same site session. A session cookie is not stored on the hard drive and is deleted as soon as the user is done browsing the site. This is the cookie that has a unique session identifier that allows it to recognize a single user as they move through the site.

Persistent cookies – also referred to as permanent cookies, last over multiple sessions. Among the most popular ones are tracking cookies and authentication cookies, however, their range of functionality also includes remembering any changes made to a website including language, theme, favorites, preferred shipping addresses, payment methods, etc.

Flash cookies – are no longer in use, however, they were not a type of HTTP cookie. They weren’t stored in the browser but in the Adobe Flash browser application. Because of that, they had to be managed (cleared) separately. 

Before the end of Adobe Flash Player in late 2020, flash cookies were the most popular type of zombie cookies. Zombie cookies take the form of a small bit of code (rather than a text file) which is capable of recreating removed HTTP cookies. Flash cookies were also extremely difficult (or impossible) to delete which, in 2010, has brought on a lawsuit on companies who used them. 

Third-party vs. First-party cookies

The biggest distinction in browser cookies is based on who the cookie belongs to. There are no other technical differences, meaning, both cookies are the same in characteristics but different in origin and usage. 

A first-party cookie belongs to the owner of the website. It’s created by the host domain and its main purpose is to manage the single browsing session. It remembers what users are doing, what parts of the website they’re visiting, and the changes they make to the site (e.g. adding items to the shopping cart). Apart from ensuring a good web browsing experience, first-party cookies collect analytical information that can only be accessed by the owner of the website. 

A third-party cookie belongs to someone other than the website owner, e.g. an ad tech platform. The main purpose of a third-party cookie is to track user activity across the web. Sometimes, these cookies are used to provide third-party services (such as a live chat), however, most of the time, they’re used for online advertising activities.  

How are first-party cookies used in advertising?

First-party cookies are generally not used in advertising. They belong to the website owner and they can only be used by the said owner. There are, however, some exceptions. First-party data can be stored in data management systems. From there, it is possible to share it with third-party vendors. First-party data can also be shared as a form of partnership between websites.

How are third-party cookies used in advertising?

Third-party cookies are an integral part of the web pages that millions of users visit on a daily basis. The browser stores them on a user’s computer, essentially allowing the third parties to gather an extensive profile of each unique user on their web server. And if a certain ad company knows the location, reading habits, interests, and recent purchases of a single individual, they can target and retarget ads between various sites and companies to serve ads of products that individual is actually interested in. 

And how does a third-party cookie find its way into a website? It’s a simple process. A lot of websites make money by ‘renting’ space to advertisers. Hence, they simply allow others to place cookies in the form of an ad or an invisible pixel on their site. 

Also, web pages used to have no limits on storing cookies. Before regulations introduced by Apple, Mozilla, and finally Google, each user could have been tracked by multiple 3rd-party cookies at the same time. That way, a user’s browsing history, preferences, areas of interest over multiple visits, user’s shopping cart, and various other data was known to other websites and used for the purpose of ad targeting.

Are cookies good or bad?

The answer to this question is not straightforward. Cookies have a purpose – to remember what a user is doing and where just so they can facilitate a smooth web browsing experience. Thanks to cookies, we stay logged in, we have a list of favorites and we receive ads of products we looked at. Cookies can provide users with ads of products they wanted to buy anyway but with a special discount. They can be useful but at the cost of privacy. 

It will be clear from the following section why third-party cookies are slowly eliminated. However, before we judge cookies as either good or bad, it is important to learn what they’re capable of and where the privacy concerns are coming from.

The early history of cookies

To understand the current attitudes towards cookies we need to take a look at their history. Cookies were created in 1994 by Lou Montulli, a web browser programmer at Netscape Communications. The idea behind cookies was simple – they would allow people shopping at an e-commerce site to store their items in a virtual shopping cart. As reported by The New York Times, this was the first instance in the history of the Internet where a website’s data could be reliably stored on a user’s computer. 

In 1995, Montulli applied for the patent for the cookie technology, and just the same year it was implemented in version 2 of Internet Explorer. Although cookies have already become an integral part of the web experience, they were working entirely behind the scenes.

This is where the first concerns appeared as well. While the public enjoyed the comfort that came with individual tracking, the more tech-savvy user raised their concerns. That led to the publication by the Financial Times in February 1996. It wasn’t what the cookies were that alarmed people, it was what they might be used for. 

And thus the issue of consumer online privacy was born. Let’s remember that at that point in time, cookies were not used for advertising purposes. It didn’t mean, however, that their potential wasn’t noticed and considered in a much broader light that far exceeded their initial purpose.

The first directive to block third-party cookies

The realization that cookies could be shared with and exchanged between their origin websites and across a whole network of sites made cookies, and to be exact, third-party cookies a hot topic. Within a year, the existing advertising companies have already begun exploiting third-party cookies to track users and follow them around with ad campaigns. 

This is also the reason why the Internet Engineering Task Force’s recommendation (RFC 2109) to block third-party cookies was not followed. Both the then-popular Netscape Navigator browser and the newcomer Internet Explorer ignored the plea. The browsers were set to automatically accept third-party cookies and, at the time, there was no way of enforcing a different state of action.

To curb the arising negativity and dispel any rumors, the Computer Incident Advisory Capability (CIAC) released a statement explaining exactly what cookies are and what they are not. Here is the beginning of the statement:

The popular rumors about web cookies describe them as programs that can scan your hard drive and gather information about you including: passwords, credit card numbers, and a list of the software on your computer. None of this is close to the truth. A cookie is a short piece of data, not code, which is sent from a web server to a web browser when that browser visits the server’s site. The cookie is stored on the user’s machine, but it is not an executable program and cannot do anything to your machine.

The start of a war on third-party cookies

Coming into the 21st century, the ad tech industry was becoming adept at utilizing third-party cookies. In 1999, DoubleClick (one of the biggest internet advertising companies, now part of Google) had planned to merge with a company specializing in collecting user’s personal data for the purpose of online advertising. The negative public reaction was so severe that the plan had to be abandoned.

In 2000, another RFC directive was released. This highly technical document specified how and when each kind of cookie is supposed to be used. This was supposed to cater to the needs of the browsers that didn’t comply with the RFC 2109 directive. Unfortunately, that didn’t happen. The new types of cookies were hardly ever used and quickly sunk into oblivion.

Rapid gathering of third-party data

In the meantime, the usage of cookies runs rampant. According to the investigation done by The Wall Street Journal in 2010, user data was being regularly exchanged for website access. The 50 sites checked by TWSJ have installed over 3,000 tracking files on the computer used in the study. 

As expected, it was the ad tech giants that were tracking users most scrupulously. The concept of user privacy was slowly disappearing. Some sites didn’t allow for blocking third-party cookies and although tracking was disclosed in the privacy policies, the extent of it was further than people could imagine. The 2002 ePrivacy directive, requiring websites to inform users about what data is being tracked and allowing them to opt-out was not entirely successful.

Third parties would not only gather data on users’ behavior, and location, but also on their age, gender, income, marital status, health concerns, purchases, and interests. Some would go as far as recording keystrokes thus completely violating consumer privacy in the race for most accurate data collection. 

The cookie law 

The unrestrained user tracking finally led to firm actions from the Federal Trade Commission and the European Union. In 2011, the Cookie Law came into play. Otherwise known as the Directive 2009/136/EC, it established that it’s illegal to place third-party cookies on a user’s device without their consent. Companies were no longer allowed to collect data without informing users and receiving their permissions.

Of course, the directive didn’t include first-party cookies or any other tracking technologies used to provide a smooth user experience. It was simply the breakthrough moment when all of the pop-ups started appearing asking users for permission to collect third-party data. An ad network could still target ads but only to those who explicitly consented.

Why are third-party browser cookies disappearing?

The web community has always been skeptical about web servers gathering information about user browsing habits. After all, cookies store not only information necessary for the functioning of websites, but also information about their interests and interactions. That might include sensitive data and personally identifiable information. 

Cookies created without user consent could follow individuals around the web. Despite GDPR laws and directives, consent pop-ups were still designed to trick users into accepting browser cookies. And while it was possible to delete cookies, some (like Zombie cookies) would stay on the visitor’s computer without their permission, thus propelling shady advertising practices. 

That prompted a new privacy-oriented trend. Started by Apple in 2015, browser cookies were given less and less power in favor of user control. Despite the ad tech industry’s reliance on permanent cookies, the biggest web browsers on the market started taking these security concerns seriously. After Apple has enabled ad blocking in Safari, other browsers followed with increasingly stricter cookie policies. 

A timeline of browser cookie phase-outs

2015 – Apple allows third-party ad blockers on Safari. Users who didn’t want to see any more ads could simply install an ad blocker from the app store. A browser cookie that would normally be ‘hidden’ in an ad, would no longer be able to land on the user’s computer.

2017 – Apple’s Intelligent Tracking Prevention 2.0 disables browser cookies coming from third parties. Users would still be shown ads, however, as Safari wouldn’t accept cookies from the publishers of the ad, the data stored in a cookie was no longer available. Hence – no accurate tracking and revenue attribution.

2019 – Mozilla introduces options for handling cookies and the option to disable cookies coming from third parties. This decision affected mainly smaller publishers but it paved the way for other browsers to further disable cookies used for tracking.

2019 – Apple’s Intelligent Tracking Prevention 2.2 limits the tracking functionality of first-party cookies. So first-party data became only accessible for 24 hours which didn’t restrict website functionality but made it difficult to analyze data coming from complicated funnels that used first-party cookies. 

2019 – Google announces the Privacy Sandbox. As the browser that relies most heavily on advertising revenue, Google Chrome was most reluctant to introduce any changes. That’s why the Privacy Sandbox project was meant to focus on finding alternatives to persistent cookies rather than removing them completely. 

2020 – Safari introduces automatic third-party cookie blocking.

2020/2021 – Google announces plans to gradually phase out third-party cookies by early 2023. Initially, the plan was to be realized by 2022, however, Google keeps postponing further steps due to the ongoing development of alternative tracking solutions and the rejection of FLoC by all major browsers. 

2021 – Mozilla introduces total cookie protection completely limiting tracking its users across multiple sites.

2022 – Google abandons FLoC in favor of a new, less controversial solution – Topics API.

By mid-2021 cookies have slowly become obsolete. While first-party cookies are here to stay, third-party data will no longer be gathered and shared between the ad tech giants and the rest of the advertising industry. If every time a user starts an app they are asked for permission to be tracked, they will only agree only 25% of the time, as shown by the most recent Apple update.  

These developments have brought cookies back to their primary form. They’re once again used to make the browsing experience easier and more convenient without infringing on user privacy. 

What’s the future of advertising?

There is no place for third-party cookies in the future of advertising. After third-party cookie-based ad formats peaked in the 2010s there’s been a growing tendency towards more privacy-oriented solutions. 

It was Apple that started the trend of giving consumers more control over being tracked around the web for the purpose of ad targeting. Consequently, the attitudes have changed and now all of the major browsers are either limiting or eliminating third-party tracking altogether. Thus, old targeting and retargeting methods are no longer working. There is, however, more space for alternative advertising solutions, be it first-party data, contextual targeting, or a yet-to-be-discovered technology.

Google, Facebook, and other tech giants who are most affected by the changes will continue to search for alternative methods of keeping their ad businesses alive. In the meantime, the last bits of third-party advertising is dying and brands are moving to cookieless ad formats.

If you’d like to learn more about the most recent changes, read about the state of the advertising industry in the face of third-party cookie phaseouts.

Conclusion

As for the ad tech industry, it is hard at work trying to replace browser cookies with other methods of effective advertising. For the past couple of years, it’s been clear that browser cookies coming from third parties (tracking cookies) are not welcome anymore.

Some of the largest companies in the world are now in the rush to future-proof their advertising. To answer the suddenly increasing demand, innovative and cookie-less ad formats are starting to emerge. These can not only bring customers to the desired website without cookies or any other third-party tags or trackers but also do it more effectively than traditional ad formats while maintaining brand safety and user privacy.

Would you like to learn more about future-proofing your advertising with cookie-less ad formats? Request an exploratory call with a NewProgrammatic expert, and let’s get the ball rolling!

 Ask us about effective cookie-less ad formats!

The post What are browser cookies? The history of cookies in digital advertising. appeared first on NewProgrammatic Blog.