Research Briefing: The end of third-party cookies could be a win for ad tech vendors

This research is based on unique data collected from our proprietary audience of publisher, agency, brand and tech insiders. It’s available to Digiday+ members. More from the series →

Interested in sharing your perspectives on the media and marketing industries? Join the Digiday research panel.

In this week’s Digiday+ Research Briefing, we examine how the end of third-party cookies could be a win for ad tech vendors, how publishers’ Q4 earnings paint a gloomy picture of 2023, and how sports media investments are rising in a fragmented media landscape, as seen in recent data from Digiday+ Research.

56% of industry pros say Google will kill third-party cookies by the end of 2024

The loss of third-party cookies will surely dent ad tech vendors’ businesses. However, for something that was meant to be an apocalyptic event, the end of third-party cookies is apparently a win for a lot of vendors — at least according to their recent earnings updates.

During LiveRamp’s recent earnings call, CEO Scott Howe urged the industry to ditch cookies. The ad tech vendor has spent four years honing its own ID graph, so marketers can still target ads effectively without traditional cookies. Plus, being one of Google’s chosen partners for the cookie-less targeting solution PAIR, and acquiring Habu to get one of the biggest data clean rooms, really solidify its position.

Similarly, PubMatic CEO Rajeev Goel said during PubMatic’s earnings call that the business has scaled its marketplace around environments without third-party cookies like CTV, commerce media and mobile apps. These sectors are rapidly growing and have become a significant portion of PubMatic’s revenue. The majority of impressions PubMatic sells now come with alternative signals, indicating a shift away from third-party cookies already.

Interestingly, The Trade Desk’s CEO Jeff Green noted during the company’s earnings call that publishers, rather than DSPs, are facing the brunt of the cookie change. He mentioned that some publishers are experiencing a 30% drop in pricing due to the absence of third-party cookies. On the flip side, the use of The Trade Desk’s alternative to these cookies, Unified ID 2.0, is driving a 30% increase in CPMs for adopting publishers, thanks to improved addressability.

So, when do the marketing and media industries think cookies will actually be gone, forever? A recent Digiday+ Research survey of 121 agency, publisher, ad tech, retailer and brand professionals found that, interestingly, pretty much everyone believes the third-party cookie is truly on its way out. More than three-quarters of all respondents to Digiday’s survey (76%) said they disagree that Google will never get rid of third-party cookies in the Chrome browser.

The stats:

  • Fifty-six percent of Digiday’s audience (including agency, publisher, ad tech, retailer and brand professionals) said they agree Google will get rid of third-party cookies in the Chrome browser before the end of the year. Meanwhile, 55% said they agree Google will get rid of cookies at some point in Q1 2025.
  • Two-thirds of publisher pros (67%) said Google will get rid of third-party cookies at some point in the first quarter of 2025. Meanwhile, 61% said Google will get rid of cookies before the end of this year.
  • Agencies think the cookie’s death will come in Q1 2025 — by a small margin. Sixty-one percent of agency pros said they agree Google will get rid of third-party cookies in Chrome at some point in Q1 2025, while 57% said they agree Google will get rid of cookies before the end of 2024.

Read more about when industry pros think the cookie will die

Digiday+ Research digest

During a fairly positive Q1, some publishers released their Q4 earnings reports, reminding the industry that advertising revenue may be on the come-up, but it’s based on a new low set in 2023. Gannett’s full-year ad revenue fell by about 7.3% from around $1.5 billion in 2022 to $1.4 billion in 2023. The New York Times Company’s total ad revenue was down 3.5% year over year from $523 million in 2022 to $505 million in 2023. And Dotdash Meredith’s total digital ad revenue was down almost 10% year over year, hitting $560.8 million in 2023 down from $621.7 million in 2022. This tracks with results from Digiday+ Research surveys of over 100 publisher professionals in which half of publishers said they expected revenues to increase in 2023, but only about a third of publishers said they ended up seeing revenue growth in 2023.

The stats:

  • Fifty-one percent of publisher pros said in Q4 2022 that they expected 2023 revenues to increase compared with their 2022 revenues. In reality, 36% of publisher pros said in Q4 2023 their revenues actually turned out to be higher last year than the year before.
  • The highest percentage of publisher pros (20%) said their revenues decreased between 1% and 10% in 2023, while 11% said they saw revenues drop by 11% to 25%.
  • The reality of publishers’ struggles in 2023 is not stopping them from hoping for a better year in 2024. Fifty percent of publisher pros said in Q4 2023 that they agree strongly or somewhat that their companies’ ad revenue will grow this year.

Read more about publishers’ 2023 and 2024 revenues

Sports media investments are rising as the fragmented media landscape is forcing agencies and advertisers to rethink their content strategies. A recently released sports media report noted that global ad spending on sports media rights is expected to reach $61 billion this year (up 18.9% on pre-pandemic levels) on major live events in 2024 — even as streamers and social media attract wider audiences across different channels. Digiday’s 2023 Media Agency Report found that almost half of agency professionals (49%) expect clients to increase their overall ad budgets in 2024, something Assembly Global’s chief client officer Kendra Mazey said can be attributed in part to upcoming sports and political events.

Insights and stats:

  • “We’re not seeing brands holding back. We’ve got the Olympics and the elections. … We are definitely seeing upticks across all categories, and all verticals — from health care to finance to homebuilding — it runs the gamut.” — Kendra Mazey, chief client officer at Assembly Global
  • Agency pros said clients moved money into digital channels, like streaming video and CTV, more than other channels in 2023 and they expect that to continue this year. Almost a quarter of respondents (24%) said clients had increased their streaming video/CTV spending in 2023, and 43% of agency pros said they expect clients to increase their streaming video/CTV spending in 2024.
  • “With streaming up and sports up, that’s obviously helping rebound video overall. I don’t think [linear TV] is going to rebound the way that it has historically, where a down marketplace came back significantly. [Spending] will probably go to other video areas and other channels, but there’s going to be a sellout in sports, and there’s only so much that we can put in there.” — Samantha Rose, evp and strategic investment lead at Horizon Media

Read more about media agencies’ client spending

See research from all Digiday Media Brands:

Digiday+ Research

Glossy+ Research

Modern Retail+ Research

More in Marketing

The era of the in-depth brand and gaming creator partnership has arrived

To reach gamers outside of video games, brands have moved beyond one-off activations based on specific intellectual properties toward more fully integrated programs that span across all aspects of a creator’s community and fandom.

Companies seem determined to make everything a retail media network. How did we get here?

Brands are leveraging retail media to push the boundaries of where and how we can shop. How did we get here?

Sifting through ‘the noise’: AI tools for HR are evolving fast – here’s how to catch up

Like with all emerging tech, sorting the useful from the useless, is critical and time-consuming.