5 charts on how third-party cookie deprecation will change ad buys

Although Google delayed third-party cookie deprecation until 2025, marketers should be preparing now. Here are five charts on how the loss of cookies is impacting the industry.

1. Most advertisers are still relying on cookies for their programmatic buys

More than three-quarters of US programmatic ad buys in 10 industries relied on cookies in Q3 2023, per November 2023 data from 33Across. Less than two months later, Google deprecated Cookies for 1% of Chrome users worldwide. Advertisers should avoid waiting for Google to reach its deadline and instead focus on testing alternatives like attention-based metrics, activating first-party data, and contextual advertising.

2. Cookie loss won’t affect advertisers’ preferred transaction methods

In 2013, open auctions were the most popular transaction method, accounting for nearly three-quarters (74.5%) of the programmatic display market. In the decade since, its share has dropped to 10.2% as advertisers rely increasingly on private marketplaces and direct platforms such as social media channels and retail media networks.

As they refocused strategies around first-party data, programmatic advertisers invested more in closed and private ecosystems, which reduce hidden fees, minimize the risk of data leakage, and lessen carbon usage.

3. First-party data is the next-best solution

A quarter of marketing professionals worldwide believe first-party universal identifiers are the most viable solution to cookie deprecation, according to August 2023 data from ID5.

As alternative ID solutions become more critical, competition for first-party data has intensified. Solutions that rely on first-party data, however, favor large brands with vast data sets, while smaller players may be forced to shell out big investments to take the same approach.

4. Ad budgets favor contextual and first-party data

US advertisers say 28% of their targeting budget is put toward contextual data, while 27% is for first-party data, per a January 2024 report by Proximic.

A different report from Proximic found that 54% of US marketers planned to increase their use of contextual data in 2023. But contextual targeting needs to be enhanced with AI and other behavioral tactics to be successful.

5. AI will be imperative to ID-free targeting

Marketing professionals worldwide believe that improved targeting is the second-biggest benefit of using AI in marketing, following increased efficiency, per December 2023 data from Ascend2.

Generative AI is key in empowering advertisers with limited first-party data, as it requires little input to power probabilistic models. Smaller brands and agencies can take advantage of these tools to scale addressability without identifiers.

This was originally featured in the eMarketer Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.

First Published on Mar 15, 2024

"Behind the Numbers" Podcast