The advertising industry is on the cusp of a fundamental change, and for some industry players, they won’t be able to have their cake and eat it anymore. Well, by cake we mean cookie, as this form of consumer tracking software is on its way out. Google recently announced that they will be removing all third-party cookies from Chrome at some point in 2022, and where Google goes, the rest of the industry follows.
So the cookie is going the way of the dodo, it shall cease to be and will push up the metaphorical daisies – and that’s actually a good thing. Cookies are notoriously invasive and collect a large number of information people would often rather keep private. With change of course comes opportunity, and the decline of cookies is going to occur in tandem with the rapid rise of the connected television (CTV) industry.
The Pandemic Bolstered the CTV Market
Spurred on by the massive uptake during the COVID-19 pandemic, CTV is continuing its march forward and looks set to become one of the most dominant forms of media that exist today. According to eMarketer, in 2020 CTV investments in the US grew by 40.6% year over year in 2020, to more than $9 billion. By the end of this year, that figure is expected to grow to $13.41 billion, and advertisers are naturally taking note.
This is despite the fact that CTV is by some metrics a fairly young industry, one that is full of opportunity to be sure but has come across as risky to some. Some issues do present a challenge, as the imbalance in supply and demand caused by CTV’s rapid pandemic growth, and buying options in the industry remain fragmented, but in the wake of the cookie cull advertisers are more likely to take a bet on CTV.
A prominent reason why advertisers should feel encouraged to invest their energy into CTV is its innovative identity solutions. Probabilistic targeting (based on capturing IP addresses) is being replaced by deterministic methods, which focus on utilizing a user’s device ID, account name, and other information. The difference is like that between a scalpel and a sword, they both fulfill the same basic function but one is far more precise.
According to a recent survey, 57% of American consumers said they would prefer less ad personalization in exchange for greater data privacy, highlighting the growing demand CTV’s deterministic approach can tap into. Several vendors now also use Identifiers for Advertisers (IFAs), software-based advertising that can be disabled and reset by the consumer, similarly to mobile Ad IDs.
While they’re not perfect (IFAs can’t track across multiple devices for example), they do offer streamlined targeting for advertisers while tapping into the public’s demand for greater data privacy. There are also Data Management Platforms (DMPs) that can match users operating different devices by creating a unique user ID. This means that unlike IFAs, DMPs can create and build up an audience that can be tracked effectively across various devices.
Use the Data You Have Available
A good way for advertisers to gain momentum here is to make the best use of their first-party data. This is the information collected directly from customers and is successfully used by many ad marketers working in the CTV industry. Creating common standards on user identity and market collaborations is essential, to ensure smooth cooperation between creators, advertisers, etc. Also, the key to the post-cookie world is spending time and resources on finding the right audience, and it will pay to focus on a more niche market approach.
Companies that innovate early often enjoy a significant advantage over their competitors, and in the advertising field the new adopters who succeed are likely to be those who embrace the post-cookie ecosystem in CTV. The challenge facing companies will be how to make the best use of the data they have available. The positive aspect to focus on is that with the exponential growth of CTV, innovative new techniques to advertise to consumers will continue to emerge as the industry both grows and adopts new technology.