Why in-game advertising companies see potential benefits in the death of the third-party cookie

Their theory — if you can call it that, given the uncertainty and guesswork of adland — goes something like this: once third-party cookies go kaput in Chrome once and for all, the online ad market beyond walled gardens will split into a big chunk of high-quality ad inventory with first-party identifiers and consent, alongside a long tail of poorly targeted impressions far more prone to fraud and malvertising.

No surprise which side of the market in-game ad companies think they’re going to end up on.

“The future of media spend, in general, is migrating into data-rich environments, and to environments where you know your consumer in a way that traditional sports advertising has never known before, other than the people who buy season tickets,” said Lewis Smithingham, svp of innovation at Media.Monks. “All of a sudden, every single person that is watching your sport, your game — you know everything about them, and you have a diverse and interesting advertising profile on that person.”

The rise of gaming, as well as broader trends in media toward so-called “extended reality” and the metaverse, does offer an inviting life raft to brands left feeling light on user info following the long-awaited death of the third-party cookie. In a gaming environment, almost every action a user takes generates data, from the specific in-game decisions they make to the amount of time they dwell in any particular area, without ever having to rely on technology like third-party cookies. This allows in-game advertising companies to leverage game worlds as de facto user surveys measuring metrics such as brand lift and brand loyalty.

“Instead of having a user fill out a survey, we can effectively give them that survey by showing them particular brands or brand categories and seeing which within the game experience they engage with,” said Kristan Rivers, CEO of the in-game advertising firm AdInMo. “We don’t have to have that overt ‘which one do you like,’ but we should be able to see which ones you are interacting with more, which ones you are dwelling on more. That’s the power of an in-game engagement.”

While it’s true that gaming environments offer a detailed look into their users’ behavior, it’s also worth noting that the death of the third-party cookie in Chrome, as well as artificial intelligence, are the latest in a series of popular concepts that in-game advertising companies have seen as a chance to generate hype around their offerings. Though brands’ spending in gaming is growing, the in-game advertising sector has not expanded as rapidly as some observers anticipated, despite in-game ad companies’ efforts to attach their products to buzzy concepts like Web3 and the metaverse. 

“There are a lot of brands that are eager to do it, but have at this point in 2024 had some rough history in attempting to play in the space in some form or another. A lot of brands are hesitant, or still testing, as the industry matures,” said Max Bass, director of emerging connections at the agency Gale. “But we’re seeing a lot of brands that are just curious about learning and curious about how they can authentically show up.”

If in-game advertising eventually does become a standard line item in brands’ marketing budgets, that growth will likely come gradually, rather than being sparked by any particular buzzword.

“The reality is, we’ve been saying for five years, ‘now’s the year, finally, that brands are going to get into games,’” Rivers said. “So, to some degree, it does feel a little bit disingenuous for me to say, ‘now is the year,’ right? Because fuck it — we just don’t know, at this point.”