But every year, inventions and improvements in ad-tech technology, as well as new advertising possibilities, emerge – and 2022 will be no different.

The below list of programmatic trends in 2022 will make a great cheat sheet for every marketer and brand looking to scale their business. 

Key trends for programmatic advertising in 2022

In this article, we have listed a set of the most important programmatic trends for 2022. Following those should be undoubtedly a significant point of any brand’s and advertiser’s agenda for this year.

It highlights the pivotal directions that the programmatic advertising industry will follow in the months to come, and as the year progresses, the programmatic advertising world will have a chance to track trends’ relevancy and adjust strategies.

UX-centric approach

One of the key programmatic advertising trends for 2022 for all the brands and advertisers is putting an increased effort into the UX. User demands are changing over time, so it is crucial to be regularly updated about the latest trends and behaviors.

Currently, brands need to take really good care of the user experience while being presented with their campaigns. As the audience tends to base their judgment on their comfort, the wisest marketing tactics would be to deliver the highest standard of service.

A two-way trust between a brand and its audience is beneficial for the well-being of any programmatic campaign in 2022. Modern internet users are highly conscious of their privacy but are not unwilling to share their data. The trust is being built by allowing them to choose who should be processing it and for what purposes.

Another trend that really helps brands achieve a desired level of UX is sustaining proper ad relevancy and intention-based targeting. By showing already purchase-driven users content they expect, brands can easily challenge competition while still delivering a pertinent ad to the audience.

Cookieless-based approach

Rising concerns over online privacy and third-party data circulation enforced major changes to the way information about users is perceived by brands and marketers. To win the audience’s trust, a company must be following the expectations regarding the usage of data within marketing efforts.

As a shift toward safe first-party data could have been worrying about some advertisers, in 2022 the trend will only intensify. Some brands worry that changes will disable all possible ways of audience targeting, but this concern is unfounded. With programmatic ad buying solutions relying on first-party data, advertisers are able to target their audience precisely based on their intent.

This is definitely something the whole industry should be really careful about. We recommend visiting our blogpost on the future of programmatic advertising in a cookieless world to find out more about the topic.

Leveraging first-party data

Following the patterns of third-party data processing is a trend that brands and marketers should follow in order to fulfill environmental expectations. Should a respected brand follow outdated, third-party cookies-based schemes and solutions, it could potentially lose credibility among the audience.

The marketing industry should firstly be highly aware of their target users’ preferences, and secondly, make the greatest use of first-party-based solutions. This way users’ online privacy inclinations are satisfied as the data is processed in a highly competent, safe, and professional manner.

NewProgrammatic ad exchange platform offers exactly that – proper data processing, and safe and user-compliant methods of receiving it.

Brand safety and brand visibility

Programmatic advertising enabled the whole marketing industry to really guard brands’ good reputations. The decision of trusting the programmatic buying solutions created a safe space for advertisers where they are able to filter out all the unwanted traffic and attract only a specific type of audience.

Using programmatic keyword targeting allows brands to focus on specific search queries and keywords. This filters out all the potential unwanted programmatic displays on unwanted domains.

This type of management has become a crucial part of creating a brand’s online presence and is definitely a beneficial marketing practice.

Many advertisers tend to forget how important the image of a brand (as media buyers) is when it comes to online advertising. Having a respected environment of ad display is, by all means, helpful, and raises the possibility of conversion with an engaged user is much higher.

The same solutions are being constantly used as a form of reaching the potential customer before the competition, as well as a way to build the brand’s presence and recognizability. Brand awareness among potential customers is the foundation of creating a strong position in the market. Programmatic ad tech is a solution that enables that at an unparalleled-before rate and precision.

New Generations of the programmatic advertising audience

The two newest generations of consumers and media users are revolutionary for the advertising industry, as both of them have been raised with broad access to technologies. Now that Gen Z and Millennials are making purchase decisions and are responsible for market trends, their behaviors and preferences should be taken into serious consideration by all the marketing industry – the programmatic field in particular.

New technology as a platform to deliver ads

With younger consumers being more technologically advanced and competent with different kinds of devices, it would be unwise for advertisers to neglect the rising importance of innovation.

The numbers represent it clearly. Statista presented us with research findings that claimed that in 2020 there were 83.7 million AR (Augmented Reality) and a combined 50,2 million VR (Virtual Reality) users in the U.S. only. This has become even more important, as both AR and VR tools are starting to be the cornerstone of metaverse advertising that is being intensely developed as per Q1 of 2022.

The predictions are that by 2023 the U.S. AR user count will increase to 110.1 million while the VR device user count will exceed 66 million. This exponential rise in popularity of those tech solutions will in fact be something to explore in the future, especially with metaverse possibly reaching new highs in the years to come.

Connected TV (CTV) ad opportunities

Programmatic CTV is also a trend that has been visible for a long time, and it refers to increasing accessibility to internet-connected TV devices. In 2022 Connected TV is more popular than ever, and streaming services have finally started to monetize their immense traffic by advertising.

Brands are once again given another chance to reach a new type of customer by accessing the content provider users’ first-party data. For advertisers, it means that they could narrow their targeting even more and contextually try to interest a specified type of viewer.

Search advertising possibilities

Voice search functionality was at first (when introduced at the beginning of the second decade of the XXI century) only innovation, and the market would not perceive it as a groundbreaking change.

But with the improvements in artificial intelligence, major upgrades of virtual assistants, and the introduction of smart devices (such as speakers), people have started to use voice search more intensively. Voicebot.ai report shows that over a third of adults have used this kind of search, and the numbers will be rising.

This tool is not only a great solution for visually and physically impaired users but also something that programmatic advertising professionals should look carefully into. Voice queries are usually longer than what a user would search by typing (even up to 5 or 6 words long), and most often have a form of a question rather than a keyword cluster.

The video ads sector is keeping its trajectory

Video formats are something that advertising brands embraced a few years ago when text-based formats had to give the floor to newer solutions. This is strongly based on user preferences, and the rising popularity of TikTok is only another proof of the concept.

Ephemeral video clips are clearly something that the audience seeks in 2022, and it’s a perfect opportunity for advertisers. The digital ad spend for video formats has also been rising, and as Statista predicts, in 2022, it will reach $43 billion. It is almost double of video programmatic ad spend from 2019, which was $24.5 billion.

Mobile importance

A good idea for any advertiser would be to really focus on mobile advertising opportunities. This relates both to implementing more mobile-friendly solutions and introducing programmatic advertising to new portable devices.

Wearable tech is yet another way of reaching ad receivers, as smartwatches, smart bands, and other smart devices become more accessible and are equipped with better screens now.

The marketing industry has already become almost entirely mobile-optimized in a response to user preferences and year-by-year mobile growth. This is definitely something that brands and advertisers should stick to and definitely good practice for any marketing team member.

Buy now – pay later platforms

When analyzing buy now-pay later platforms, marketers should have two perspectives in mind. The first one is user-centric, and the other focuses on how brands could benefit from engaging with such traffic sources.

For a brand, it is always beneficial to narrow the campaigns down to those users, who are already convinced to make a purchase. By approaching positive consumers, the marketer increases the conversion chance of a programmatic ad campaign, while basically doing the user a real favor.

The well-targeted campaign will be a perfect response to the search query, with the possibility of customer bouncing significantly decreasing. The buy now – pay later model enables more brand safety, as the trail of the user is more likely to lead to a conversion.

The studies show that younger adults have currently very little trust for any form of loan or credit. Simply delaying the payment without going into any debt is a perfect answer for their needs.

One of the most prolific buy now-pay later is of course Klarna, which recorded $80 billion gross merchandise volume in 2021. Offering both highly efficient Search Autocomplete and Tiles traffic, it showcases how efficient NewProgrammatic features can become in a capable advertiser’s hands.

What is also a very important peculiarity of this type of online shopping, is the fact that it most usually revolves around transactions of a higher cost. Buy now – pay later platforms are obviously most widely used during more expensive purchases. This is why it’s a very convenient tool for those brands that want to attract higher-spending users.

Vertical search engines

In order to receive exact and already-filtered search results, users have begun to pay increased attention to specialized search engines. Vertical search programmatic advertising allows the brands to really omit the traditional, horizontal search engine (like Google) struggle to position the ads.

Instead of that, marketers can reach users based on their intentions within vertical search engines. Those are really easy to find out, as in this case, the audience more eagerly shares their data. Most often, they visit the search engine in order to make a purchase. Reaching an already-convinced audience is one of the most effective strategies in the industry, and is highly recommended for all advertisers.

In-house programmatic advertising

Another trend that brands are currently intensively following, is the progressive shift towards in-house programmatic advertising.

In the past, due to the technological complexity of programmatic solutions, this particular area of marketing was slightly falling behind other fields of advertising in terms of the ongoing in-house shift. As most of the marketing (i.e., traditional advertising) was gradually absorbed by companies, marketing professionals focusing on programmatic ad solutions were still mostly outsourced. But as a broad understanding of the topic rose, more and more experts have been hired to operate in-house for the companies.

The in-house form of conducting campaigns imposes the necessity of having only the highest-skilled professionals on board. In this configuration, utilizing a trusted programmatic advertising platform could outperform any other form of outsourced programmatic ads operations.

This particular type of employment allows marketers to better fathom and plan a brand’s programmatic ads strategy, decreasing the operation’s expenditure and making space for more extensive programmatic ad spending. It is also a brilliant way of holding more control over successive steps of the campaign planning and bringing transparency to programmatic campaigns – without any external middlemen.

According to IAB’s 2020 research, as much as 74% of EU-based programmatic advertising was conducted in-house, while in the U.S. it reached 69%. The researchers expect both of those values to rise in the following years.

Intent-based ads

Based on 1st party processed by trusted publishers, quality programmatic advertising platforms allow marketers to bid for digital ad space that best reaches those members of the audience, who show the most probable intention of purchase.

While in the past this approach was heavily reliant on third-party cookies, nowadays thanks to programmatic advertising technology, marketers and brands are able to operate on first-party data.

Once again, it is an optimal practice for companies, especially since, although cookies and third-party data are still present online, they soon will be discarded. It’s also a matter of brand safety of the respected entities to follow new, privacy-focused trends. Otherwise, users could not be so eager to engage with a campaign they are being shown.

Contextual targeting

With programmatic advertising platforms, it becomes possible to display ads in accordance with the context of the website. Brands shall use this functionality for precise audience targeting – for example, sportswear brands will benefit most from programmatic display on sports-related websites, and not just any other domain. Approaching an interest-correlative audience thoroughly increases the chance of conversion, as relevant content will simply attract more users’ attention.

Keyword targeting

It has also become a good practice for advertisers to narrow down their campaigns by using keyword targeting. This is yet another form of contextual advertising which allows marketers to focus on bidding for a certain audience. This allows brands to reach a highly qualified and marginal type of relevant users, and also filter out all the unwanted traffic.

Although this method of targeting has been already recognized by worldwide brands for a long time, the new, cookieless online environment highlights the best qualities of this feature – brand safety and precision.

Conclusions

Every marketer and each brand that wants to stay relevant needs to pay close attention to trending user-behavior patterns, preferred technologies, and ad formats. This is to ensure the maximum efficiency of their campaigns.

Up-to-date knowledge of all the latest programmatic advertising trends is the only way for brands to fully reach the potential of their marketing campaigns. Escalating intent-based and contextual targeting is one way to do that.

Most of the programmatic trends for 2022 will be continuations of what the industry started noticing in the previous years. Still, neglecting those could turn out to be a critical mistake, as doing so could potentially decelerate brand development.

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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?  
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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.

Cookies are a part of a large browser tracking scheme that allows advertisers to do their jobs effectively. While some internet users appreciate the well-targeted ads, many raise their concerns about a possible threat they pose to online privacy. 

Over the years, opinions on browser cookies have changed but the mistrust remained the same. The NewProgrammatic blog brings you the complete history of cookies, the changing of attitudes, and their effects on digital advertising. 

The early history of cookies

Before 1995 it was not possible to know whether someone browsing the Internet has seen the same site twice. All kinds of transactions had to be completed in one go or started over again on the next visit. While the first online banner ad appeared in 1994, it was placed on one site only and had no other targeting than the visitors of said website. 

Browsing the web was largely anonymous until 1995 when the first cookie was created. Lou Montulii, a programmer working for Netscape Communications, came up with the idea to track users by placing a cookie on their computer. The purpose of that new technology was to make browsing sites easier. The products stayed in the shopping cart for the user’s next visit and websites became ‘aware’ of who visits them, what action that user takes, and how often they come back.

Cookies were almost immediately adopted by Internet Explorer. Despite both the Microsoft browser and the Netscape browser keeping cookies under the table, those privy to the inner workings of the web had already become concerned about what cookies could be used for.

Cookies enter the world of online advertising

While cookies were designed to be working within the same site (and related sites), there was a simple loophole. Companies could easily agree to share these cookies with third parties. Actually, companies anonymously aggregating user information could easily do so for the purpose of advertising. It didn’t take long for the large Internet advertising companies to get a hold of that.

DoubleClick and Engage were the first companies to try it. They used a common cookie across the web to keep track of what the user was doing. By that point, banner ads were already scattered around the web. It was already possible to identify a potentially suitable audience. But it was only when cookies came about that tracking the performance of ads became feasible. 

As reported by The Wall Street Journal, by 2010 some sites were using over 100 tracking cookies at a time. Among the surveyed sites “some two-thirds of the tracking tools installed—2,224—came from 131 companies that, for the most part, are in the business of following Internet users to create rich databases of consumer profiles that can be sold.”

Third-party cookies became a very popular media topic at the time. Tracking users and consumer privacy was a controversial issue. Nonetheless, despite multiple attempts to stop advertising companies from gathering user data for the purpose of targeting ads, all the directives and laws were either ignored or bypassed. 

The phasing out of the third party cookies

Since 2011, the ad tech industry has grown to insane proportions. Despite Google Ads and Facebook dominating the advertising industry, there were many smaller and bigger ad networks created. DoubleClick (later bought by Google), Yahoo!, Baidu, Criteo, and others were all working alongside social media platforms in filling the web with advertisements. 

In fact, the online advertising market grew by 93% between 2011 and 2016 as reported by European Audiovisual Observatory. Additionally, in 2016, online advertising surpassed TV advertising in revenue. And thus the data collected about individuals browsing the web became worth its weight in gold.

However, to meet the rising consumer expectations and concerns, cross-site tracking had to be limited. This time… effectively.

The main reason for changes was that cookie consent notices established in 2009 were found to be largely ineffective. According to academic research on GDPR consent notices, most pop-ups didn’t fulfill their purpose. They failed to be informative, they offered pre-selected switches in favor of ad tracking, or they offered a single confirmation button with no visible option to decline third-party data.

Apple takes the stand against ad tracking

Apple was the company that took the first step towards limiting ad tracking and protecting the user identity on the worldwide web. In 2015, the release of iOS 9 brought many improvements along with one special functionality – to block ads in Safari. It then became possible to create all kinds of ad content blocking extensions for iOS devices. 

The decision has not been met with enthusiasm from Google and the whole $70 billion mobile marketing business. Publications like the WSJ’s Apple’s Ad Blockers Rile Publishers, or Tech Times’ Ad-Blocking Feature In iOS 9 May Cripple Mobile Advertising Industry, and Techwalls’ Apple’s Anti-ads iOS 9 will Worry the Media Industry expressed the attitudes clearly. 

Apple was doing the right thing. However, it was not the right thing for the advertising industry. Limiting the availability of ad spots could raise the prices for iOS publishers and make it generally more difficult to advertise on iOS devices. And while Google has already been in trouble once for circumventing the privacy measures in Safari, it was once again sharing tips on how to get around the new Apple security rules. 

That was the first blow to mobile advertising. According to Statista, Apple has sold over 230 million devices all over the world, just in the year 2015. By giving that many users control over whether they want to see ads or not, Apple has caused anxiety to many web publishers relying on mobile audiences. 

In 2017, Apple decided to go one step further by introducing Intelligent Tracking Prevention 2.0 (ITP 2.0). While this update made Safari one of the best web browsers when it comes to user’s privacy, it severely complicated the lives of performance marketers. Third-party cookies were no longer allowed unless extra steps were taken. The workarounds, however, often made it more difficult to accurately track data. 

Apple’s decision to kill third-party cookies had, once again, a negative impact on companies like Google, Facebook, and Amazon. Ads could still be shared, however, since personal data and preferences were no longer recorded, the ads could not be properly managed. 

The introduction of ITP 2.1 and 2.2 deepened the problem. As of May 2019, first-party cookies were filtered by functionality, and the analytical ones were deleted after 24 hours. And what does that mean for advertising? The workarounds no longer worked. Ad tech giants could no longer track user activity outside a 24-hour window in the Safari browser.

E-commerce advertisers who used the first-party cookie to save data about website visitors could no longer use that. It used to be possible to score a conversion after sending reminders to users who have abandoned their shopping carts or didn’t make a purchase after browsing the site. After Apple’s ITP (2.1, 2.2, and then 2.3) a user had to make a purchase within the same session. Otherwise, the funnel (displaying an ad – sending an email reminder – receiving a conversion) would be broken. An advertiser would still receive a conversion but without accurate data on where it actually came from (email campaigns vs. the original ad).   

Firefox takes steps to improve user privacy

Starting in 2018, Firefox began to gradually improve its privacy policies. At first, third-party cookie blocking and tracker blocking became possible. In January 2019, Firefox 65 introduced options for handling third-party cookies. 

In an opinion piece by What’s New in Publishing, the new options have been called a mere bump in the road. The author claims the Firefox update is most likely to affect only smaller and less trusted publishers. Additionally, Firefox’s insignificant global share of the market (under 5%) means not many businesses will be affected. 

Although Mozilla’s actions were nowhere near as severe as Apple’s, they allowed users to decide how much they’re willing to share. The three options – standard, strict, and custom gave users options to refuse cookies from all unvisited websites, all third-party cookies, or all cookies (including first-party cookies). The strictest options came with a warning about causing some websites to break or malfunction.

In further updates, third-party cookie blocking became a default (not only for the private mode as was the case before). By January 2020, Firefox added default blocking of crypto miners, device fingerprinting, social tracking protection, and a Facebook Container. That last feature made it very difficult for Facebook to collect data about what the logged-in users are doing on other websites.

As reported by Wired, Mozilla has acknowledged that there will be a negative impact on publishers, however, it’s only a matter of time before new technologies will replace third-party cookies. Finding alternative privacy-oriented solutions is a sustainable long-term investment, so rather than worrying about the revenue, publishers will find better ways to target ads.

The beginning of Google’s Privacy Sandbox

Finally, Google was forced to take initiative. In August 2019, Google announced the Privacy Sandbox. While acknowledging the issue of the invasiveness of the omnipresent third-party cookies, Google noticed that the attempt to replace them gave rise to another tracking technology, namely, fingerprinting. As a consequence, Google’s proposal was to create new web standards that would protect users’ privacy while retaining some form of individual user tracking and ad targeting.  

In January 2020, Google announced plans to gradually phase out third-party cookies in Chrome. Their two-year plan included limiting cross-site tracking and giving users more control over third-party cookies. The announcement posted on the Chromium blog also criticized the actions of other browsers saying that blocking third-party cookies, […] has unintended consequences that can negatively impact both users and the web ecosystem. 

Although third-party cookie data will no longer be used to track users, HubSpot reminds all those concerned about the integrity of the ad tech supply chain that this is not the end of online advertising. Google – the search giant – has stated in their blog post they will work with advertisers to ensure that targeting ads will be possible without infringing on user privacy.

Additionally, first-party cookies are still vital. They would remain an integral part of every user’s browser to ensure a smooth experience within the same site. Google’s Privacy Sandbox is also meant to include a replacement for third-party cookies in Chrome. 

What’s the current state of Internet cookies?

When in 2019 Europe’s high court ruled that pre-checked consent boxes for tracking were illegal, a large part of the advertising industry noted significant reporting losses. Tracking without explicit user consent was outlawed permanently. At that point, it was known that changes were coming. 

As of March 2020, third-party cookies are automatically blocked in Safari. Apple was once again the first company to make another big move towards protecting the privacy of its users. Additionally, Apple also blocked fingerprinting, thus making it virtually impossible to track the same user across different sites in the Safari browser.

However, the popular misconception that Google Analytics will no longer work in Safari is not true. Yes, third-party trackers known to collect information about individual users will be blocked. However, as Google Analytics is not one of those trackers, it will continue to work as before. 

One year later, in February 2021, Mozilla introduced total cookie protection in Firefox 86. In simple terms, Firefox will now not only block cookies left by popular tracking companies, but it will also keep all cookies separate. Meaning, no cookies can be used to track you from site to site as you browse the web.  

At last, Google’s original plan to replace third-party cookies by 2022 had to be postponed to late 2023. The reasoning behind this decision was to give more time to advertisers and publishers to familiarize themselves with new ad technologies. The new cookie-replacing solutions are supposed to be integrated into the Chrome Browser before late 2022. This would give the digital advertising industry a long period to move and adapt before the final cut-off in late 2023.

Still, the ad tech industry is skeptical about some of the new third-party cookie alternatives. Federated Learning of Cohorts (FLoC) was Google’s first web tracking alternative that was meant to be developed as a part of Google’s Privacy sandbox. Instead of sharing user data with third-party companies, it would store the data inside the browser. It would also group people into ‘cohorts’ based on the demographic, their habits, and interests.  

Soon after the announcement, The Wall Street Journal and many others have reported that both Mozilla and a lesser-known browser – Brave, are not planning to participate in using the system. The main argument against FLoC is that it harms user privacy in a different way than cookies did, possibly more severely. DigiDay points out that this particular method of targeting could enable discriminatory targeting or data use.

Furthermore, Financial Times said the delay along with the introduction of FLoC seems to be designed to benefit Google. They’re not only responsible for the design of cohorts but also for the effectiveness of the new system. The new developments have even sparked an antitrust investigation into Google’s practices. 

By October 2021, FLoC had been rejected by all major browsers, pushing back the end of the testing phase from the end of Q2 to the end of Q3 2022. In January 2022, the FLoC project has been scrapped and replaced with Topics API.

Topics API assigns each website a topic and then collects information on user browsing habits based on said topics. The main difference between FLoC and Topics API is that users are not grouped in cohorts, thus preventing unique user identification. While Topics API seems to be an improvement over FLoC when it comes to privacy, Search Engine Land claims it’s unlikely that Firefox, Safari, Edge or other browsers will adopt Google’s proposal […].

As reported by The Drum, there’s already been some harsh criticism from advertisers. The solution is said to provide some value to large advertisers but none to smaller businesses with lesser budgets. Targeting based on a limited number of Topics is simply not accurate enough to yield satisfactory results.

While Google works to replace third-party cookies, advertisers can discover the blooming market of alternative advertising solutions and cookieless ad formats.

Conclusion 

Although the invention of cookies has brought a lot of improvements to the way the web works, it’s also brought a lot of concerns in terms of Internet browsers handling personal data. The growth of the digital advertising industry fueled by a breakneck gathering of behavioral data has caused third-party cookies to be one of the most talked-about subjects of the previous decade. 

Nonetheless, the rapidly evolving regulatory restrictions slowly brought back privacy for the web community but as a consequence weakened the ad tech industry. 

As of now, Apple’s Safari and Mozilla’s Firefox are both blocking third-party cookies by default. They both have additional options to block first-party data from being shared across sites.

Opera and Edge don’t block third-party cookies by default, however, they both have certain options to increase privacy. 

Google Chrome does not block third-party cookies by default although it does provide extensive options for managing privacy settings. As the most popular browser, it relies most heavily on the ad tech ecosystem. That’s also why instead of making drastic changes, Google announced they will be slowly phasing out third-party cookies in Chrome in the next two years. 

As existing technologies are departing from their reliance on third-party data, digital marketers will have to adjust. The ad tech giants can rely on first-party data but brands and agencies will have other options to turn to.  

You don’t have to feel powerless against the constantly changing cookie regulations. If you’re looking for an innovative cookieless way to advertise your brand, NewProgrammatic can help you achieve consistent results.

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The post What’s happening with browser cookies? Advertising industry in the face of third-party cookie phase-outs. 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!

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