Lotame’s recent ‘Beyond the Cookie’ report examined how marketers and publishers are addressing customer acquisition and retention in the run-up to a post-third-party cookie landscape. The report polled over 1,400 respondents across seven global markets. Chris Hogg, Chief Revenue Officer of Lotame, breaks down the key UK findings…
Publishers have been talking about the need to rebuild their tech stack ever since Google announced third-party cookies were getting the chop, but repeated delays have slowed the uptake of alternative solutions. Lotame research tracking interest in cookie-free IDs found that their priority status plummeted following Google’s initial postponement, but the most recent Beyond the Cookie survey suggests the tide is finally turning.
Urgency to test and adopt identity solutions has quadrupled year-on-year amongst publishers in the UK. In 2021, just 10% saw this as an urgent priority for the future of their business; in 2022, the number rose to 41%, despite Google kicking the can further down the road. Publishers in the UK — who have ample experience adapting to privacy regulations since GDPR’s rollout — are taking the issue especially seriously, with a 5% boost in urgency compared to the global average.
But what identity solutions are the UK’s publishers testing? And how else are they adjusting their tech stack for the privacy-first future? To answer these questions and more, let’s dig into the UK findings from the Beyond the Cookie 3 survey.
Topics makes big splash, interest in probabilistic surges, and email’s limitations bite
One factor sure to have put the spotlight on identity is Google releasing its own identity solution, Topics, for global testing. The Topics API assigns users interests at the browser level which are then used for targeted advertising, with the selection refreshed every three weeks to maintain relevancy and reduce persistent tracking. It’s too early to gauge whether Topics can provide the granularity needed to be a valuable targeting solution, or whether users will understand that consent is given within the browser itself.
Publishers have been keen to get hands-on with Topics to find out themselves, pushing it to 43% adoption, making it the second most popular identity solution after authenticated email, which is used by half (51%) of UK publishers. While email will remain an important component of identity, publishers cannot rely on it exclusively, as two-thirds (67%) reported their email solution still uses third-party cookies, and more than a quarter (27%) have encountered scale limitations.
Interest in probabilistic solutions saw the biggest surge, with global results showing a 50% increase in use and testing year-on-year. As opposed to deterministic solutions that use email addresses or account information to identify a user, a probabilistic approach gathers a mix of signals across multiple channels to algorithmically build profiles by matching behaviors and attributes of known users with anonymous users.
In short, deterministic data is given, while probabilistic is inferred, and a combination of the two will be vital as addressable audiences continue to shrink.
Early signs indicate the post-cookie ID ecosystem will be technologically diverse. Testing is split roughly evenly across available technologies, with cohort-based solutions (which group users into representative categories for targeting), probabilistic solutions, and Google Topics all being tested by a quarter of UK publishers, while contextual and authenticated email come in a little further behind at 21% and 15% respectively. Only 21% aren’t testing at all.
DMPs rise in value, SSPs get pruned, and clean rooms struggle to prove value
A third (33%) of publishers plan to adopt a data management platform (DMP) in the next six months, putting it at the top of the list of future ad tech investment. DMPs store user data from various sources in a single location and create segments that can be used to attract advertisers. Successful adaptation to privacy-first data management has kept them relevant to publishers seeking to maximize the value of their audiences.
Supply-side platforms (SSPs), meanwhile, have been selected for the chop by almost one in five (19%) UK publishers, making it the most likely advertising technology to be retired. This indicates that many publishers may be consolidating and optimizing their programmatic supply paths by working with fewer SSPs, which often simply provide different routes to the same inventory. Such a strategy also limits the risk of data leakage, improves transparency, and reduces the carbon emissions of the advertising pipeline.
On the data side, clean rooms have been both a popular and challenging new technology for publishers.
Clean rooms allow companies to merge and match two or more first-party data sets to create a new audience or analytics segment without allowing either side’s personally identifiable information to be exposed to the other.
Over a third (35%) of publishers plan to adopt one in the next six months, while 28% of early adopters plan to retire theirs. Half of those who currently use a clean room cite budget as the primary challenge, and the remainder who don’t plan to use one also cite budget as the barrier. This suggests clean rooms have yet to prove their value to publishers, particularly those in the UK, who are both less likely to use clean rooms (35% compared to the global average of 44%) and more likely to find budget a challenge (51% compared to 37%).
What are the implications for publishers?
Amidst the urgency to find post-cookie ID solutions, publishers have new opportunities on their horizon. Harnessing data clean room technology, for example, presents them with the possibility of expanding owned audiences beyond their walls and building privacy-safe data marketplaces without compromising the exclusivity of their first-party data.
However, publishers remain in a precarious position, with half of UK marketers surveyed predicting that they will reduce their programmatic spend over the next year. These findings are particularly concerning for the many publishers that depend on programmatic revenue, and highlight the need for a mature post-cookie ecosystem to emerge that can deliver reliable ROI for marketers.
Currently, it’s the tech giants that are poised to continue to reap the rewards of digital advertising, as 29% of marketers said they plan to invest more in walled gardens once third-party cookies are phased out. However, they aren’t necessarily happy about this, as a third feel constrained by having to use walled gardens for acquisition and a further third are concerned about growth if they can’t target beyond them.
The open web is in a state of technological flux, with multiple solutions vying to establish themselves as an essential component of privacy-first digital advertising.
For publishers to remain competitive with walled gardens — as well as the rising power of retail media networks — they must continue to ramp up testing to identify technology that can deliver the relevant audiences and performant inventory that advertisers want.
Chief Revenue Officer, Lotame
Lotame delivers flexible data solutions to future-proof connectivity and drives performance across all screens. Marketers, publishers, and platforms rely on our innovative and interoperable solutions, powered by our identity platform, to onboard, enrich, and address audiences. Lotame is headquartered in the United States and serves global clients in North America, Latin America, Europe, Middle East, Africa, and Asia Pacific.