Advertising Guest Columns
4 mins read

How can publishers stop cookie deprecation from impacting their revenue?

At the start of 2021, the digital advertising industry had its fair share of challenges to contend with. From the growing scrutiny around data privacy to the ongoing changes caused by the global pandemic, publishers had a lot on their plate. Added to this was one of their biggest to date – Google’s imminent deprecation of third-party cookies. In February, Lotame released its first Beyond the Cookie report to identify whether publishers had relaxed their cookieless strategies or were stepping on the gas in their search for solutions.

Then the digital landscape shifted again, following Google Chrome’s announcement in June that third-party cookies would be sticking around until the end of 2023. To understand the impact of this decision, Lotame conducted a second global survey: Beyond the Cookie – Identity Solution Adoption & Testing Among Marketers & Publishers.

With the curtain closing on 2021, the report took stock of publishers’ post-cookie plans. It revealed the predicted consequences of Google’s announcement, the uptake of cookieless identity solutions, and the key factors influencing industry progress.

Effects on publishers’ bottom lines

Research from McKinsey & Company suggests that publishers risk losing $10 billion in revenue due to reduced personalization and audience targeting capabilities. Additionally, our own research shows 33% of publishers expect their programmatic revenue stream to shrink considerably following cookie deprecation.

In a cookieless ecosystem, revenue loss is a major concern for every industry professional. As a result of the deprecation of cookies, 40% of publishers anticipate the need to minimize their workforce. This could magnify the pressure on publishers in a landscape where maintaining consumer connections is paramount. Further resources and investment will be essential to developing new data strategies, so publishers can provide users with a quality digital experience while also continuing to be able to drive revenues.

Google is aiming to address targeting challenges by using cohorts of audiences sharing similar interests, which enables a form of personalization without compromising individual user identities. While onboarding new solutions, however, it’s important for publishers to experiment and ensure these tools are effective at supporting their bottom lines.

Publishers are ahead of marketers in their post-cookie preparations

Despite the difficulties ahead, publishers are leading the pack when it comes to mitigating the expected challenges of the post-cookie world. Lotame’s first Beyond the Cookie survey found that 25% of publishers had implemented identity solutions in anticipation for the post-cookie landscape. Now, the latest findings show almost half have done so or are currently testing them, in comparison to just 39% of marketers. This increase throughout the year indicates that publishers are driven to adapt their data strategies, but that’s not all.

Publishers are also taking the initiative to transform the wider ecosystem in the wake of the third-party cookie. Reach, for instance, is proactively testing a portfolio of solutions that prove performance for marketers as “it’s not one solution that fits all.”

Improving interconnectivity while safeguarding user privacy is a strong area of focus for publishers, who are increasingly adjusting their operations to support digital advertising and sustain their revenue streams.

Selecting the right identity solutions

With the push to find cookieless alternatives, the industry has seen a deluge of identity tools become available. In the next five years, the growth of the digital identity solution market is predicted to more than double in size, surpassing US$49 billion. As of right now, there are upwards of 80 identity tools to choose from, leaving publishers and marketers alike with more questions than answers. Which ones provide the necessary interoperability? Are authenticated or probabilistic IDs more effective? Which ones are the most scalable?

Lotame’s study uncovered that four in five industry professionals are considering the use of multiple identity tools, with 63% of publishers stating that data privacy is their main driver for this decision. As onboarding the best selection will take extensive testing, publishers that haven’t already should initiate conversations with their partners and tech vendors. Each business will have its own priorities, from prospecting to maximizing user loyalty, so it will be critical to learn which options are best suited to them.

Although the dawn of the cookieless landscape has been delayed, publishers mustn’t play a waiting game. Identifiers will remain a fundamental component of the digital ecosystem, so forward-thinking businesses shouldn’t ease off the gas when it comes to adapting operations and protecting their bottom lines. With further education and experimentation, the industry can build an effective infrastructure to enhance digital advertising beyond the cookie.

Chris Hogg
EMEA Managing Director, Lotame

Lotame delivers flexible data solutions to future-proof connectivity and drive 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.