The End of Third-Party Cookies:
How the AdTech Industry Is Adapting for the Future
Table of Contents
At IndieAd, we had the chance to sit down with industry expert Joanna Burton – who was, at the time of this conversation, Chief Strategy Officer at ID5 – to explore the inevitable shift away from third-party cookies, focusing on how it will transform DSP programmatic advertising, impact digital marketing, and reshape the ad tech industry as a whole. With years of experience working across agencies, publishers, and ad tech platforms, Burton shared insights on what this cookie-less future could mean for advertisers, publishers, and the digital ecosystem. Originally presented in our podcast, this article dives into the highlights from the discussion and examines how businesses can prepare for a privacy-first era.
Introduction to the End of Third-Party Cookies
As brands, agencies, and tech providers are aware, third-party cookies have long been a cornerstone of targeted advertising and tracking user behavior online. With major browsers planning to deprecate them, the industry faces an identity crisis that’s pushing it toward new, privacy-focused solutions. While Google recently delayed its phase-out of third-party cookies to 2023–2024, advertisers can’t afford to wait.
Editorial Update: In 2024, Google announced it would retain third-party cookies but introduce more user-choice features, signaling the need for continued exploration of privacy-focused alternatives.
Understanding the Third-Party Cookie Transition in DSP Programmatic Advertising
The traditional cookie-based ecosystem is often considered outdated due to its limitations in privacy and efficiency. This approach has drawn criticism for its lack of transparency and inability to provide clear data ownership for users, making it increasingly incompatible with emerging privacy laws such as the GDPR and CCPA. According to Burton, this environment creates a need for an alternative infrastructure that balances data utility for advertisers with strong privacy protections for users.
“For digital advertising to remain effective, it’s crucial to shift toward identity solutions that respect user privacy while allowing brands to reach audiences efficiently,” Burton explains.
Privacy and the User Experience
One of the driving forces behind the shift away from third-party cookies is the need to improve user privacy and experience. For years, cookies have been used to track users across the web, often without clear communication about how their data is used. Burton emphasizes the importance of building transparency into digital advertising: “The goal is to create an ad-supported web that users understand and trust.”
Adopting a new infrastructure that centers on first-party data and privacy-compliant identifiers could enable publishers to target users responsibly without relying on third-party cookies.
The end of third-party cookies is like Marlin venturing into the unknown to find Nemo. AdTech must explore new ways to navigate and reach its audience using ethical practices like first-party data collection and contextual advertising.
The Importance of a Privacy-First Identity Infrastructure
A privacy-first approach aims to create a stable and consistent method of identifying users across domains, reducing data loss and latency inefficiencies. Instead of relying on third-party cookies, ad tech is beginning to explore solutions that use first-party data along with probabilistic and deterministic identifiers, which do not track users across every browser or device. This infrastructure balances data utility with a user-centric privacy approach.
Deterministic identity uses data users have explicitly consented to share, such as an email address or phone number. Probabilistic identity, on the other hand, relies on inferred data points such as device type, timestamp, or IP address, which are analyzed in combination to make educated estimates of a user’s identity. Together, these strategies offer advertisers both accuracy and scale, creating a privacy-compliant way to reach a broader audience while respecting user choice.
The Role of DSPs in a Cookie-Less Ecosystem
Demand-side platforms (DSPs) play an essential role in helping advertisers transition to a cookie-free programmatic world. For many brands, DSPs can offer customized data solutions, such as first-party identifiers, that allow them to reach specific audiences in privacy-first ways. Burton points out that programmatic solutions using identity technology could improve campaign effectiveness by providing a consistent ID across platforms, making ad-buying more precise and cost-effective.
“The focus for DSPs should be on enabling better accuracy, optimized targeting, and streamlined measurement across domains, so advertisers don’t have to sacrifice results to comply with privacy standards,” Burton says.
Adapting to the Evolving Identity Landscape: What’s Next?
As we head further into a cookie-less era, the importance of building a sustainable identity infrastructure cannot be overstated. For DSPs, DMPs, publishers, and other ad tech players, this involves adopting solutions that protect consumer data while meeting advertisers’ needs for audience targeting and measurement. Burton advises agencies and brands to invest in technologies like first-party data, contextual advertising, and privacy-compliant identifiers now to stay competitive in the coming years.
“The future of digital advertising is about respecting user choices and adopting privacy as a foundation, not an afterthought,” Burton concludes.
Conclusion
While the end of third-party cookies may feel like a daunting shift, it presents an opportunity to improve digital advertising in the long term. By focusing on transparency, first-party data, and a robust identity infrastructure, the industry can foster an ecosystem that benefits advertisers, publishers, and users alike. As DSP programmatic advertising solutions evolve to meet these new standards, brands and agencies that act early will be best positioned for success in this changing landscape.
>> PERSONAL COMMENT OF INDIEAD'S CEO <<
From the point of view of small and medium size advertisers, this is too “high-talk”, and in practice, is almost irrelevant. Here's why:
- The market offers multiple cookieless and privacy-by-design web analytics solutions, such as Matomo, Piwik Pro, and Fusedeck… just to name a few.
- A solid Marketing and sales technology infrastructure with up-to-date marketing processes will already “do the trick” and allow advertisers to identify the real impact of their marketing activities on their company's bottom line.
Don't wait for Google or anyone, and don’t let yourself be carried away by changes. Educate yourself, put in the work, and find sustainable MarTech solutions for your business today!
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