Advertiser Perceptions finds advertisers building first-party models for contextual and cohort-based targeting while they turn to platforms including Google and Facebook for scale.

Advertisers’ use of third-party cookies declined almost 10 percentage points last summer and fall – from 97% in May to 88% in December – according to a new Cookieless Future Report from Advertiser Perceptions. Even though two-thirds of advertisers have paused their transition from third-party identifiers, 70% of advertisers are using their own first-party data for targeting and measurement, and they are testing cohort- and contextual-based data to move from one-to-one to aggregated targeting and measurement.

“Third-party cookie use declined significantly in six months, and there are strong signs that advertisers are investing in in-house first party data and contextual and cohort-based solutions of identification and measurement to ensure longer-term success.” said John Bishop, VP/Business Intelligence at Advertiser Perceptions.

Lessening performance impact. Most advertisers (81%) remain concerned about the impact that third-party identifier loss will have on their business. On average, advertisers estimate their ad performance will drop by 17%. While sizable, that’s less impact than they originally forecast (27%) last May.

Still using IDFA. Nearly half (49%) of advertisers continue to use IDFA when they can gain consent, while 41% still use Google ID on Android.

DSPs face scrutiny. Half of advertisers will change their DSP partner if they see performance decreases of 20% or more. A majority (67%) intend to move some money away from DSPs that don’t offer one-to-one targeting toward those that do.

Moving money. Advertisers plan to shift money into social, CTV and digital video despite potential impacts of cookie phaseout. While display advertising tops the list of ad types that advertisers believe will be affected by cookie deprecation, fewer advertisers expect significant declines in performance for display, mobile and social than in May 2021.

First-party factor. As advertisers gain greater capabilities for in-house identity resolution and shift toward aggregated targeting and measurement, they will pressure media partners for performance at scale with these data sets.

Data interoperability paramount. Advertisers put interoperability first when deciding on partners to develop audience without identifiers, while publishers prioritize ease of use. Yet publishers arguably need interoperability more than advertisers. Publishers will need to work with as many partners as possible to attract demand, and will likely need to lean on partners like SSPs that have more resources.

In addition, advertisers continue to test identity alternatives from Google, LiveRamp, Apple, Yahoo and others to help with audience activation and measurement. No one player has an edge, as brands are exploring all options.

“LiveRamp, Google and Facebook are already major partners for most advertisers, and advertisers are looking to these market leaders for cookie alternatives,” said Bishop. “However, the market is constantly shifting, which leaves the door open for innovation and partnerships in other corners of the industry. Publishers that can achieve interoperability, DSPs and SSPs that help brands make use of their first-party data and contextual data, all while proving performance, have a window of opportunity to gain market share.”

Advertiser Perceptions interviewed 153 U.S. advertisers and agencies between November 18 and December 15, 2021, for the latest Buy-Side Study (H2 2021).

 

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COOKIELESS FUTURE REPORT

How are marketers, agencies, and publishers preparing for life after the cookie?  The Cookieless Future Report provides insights into how buyers and sellers are approaching the necessary changes they will need to make to address their data and privacy needs and succeed in their third-party cookie-less marketing and selling.

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