How the digital ad industry is preparing for profound change in 2024

Michael Beebe, CEO, Dstillery

For the digital advertising industry, planning for 2024 is unlike any other year. It is going to be, in a word, dynamic. The industry is heading into an unusual transition that will affect the fabric of the open web ecosystem: the forced, fast and complete transition away from the third-party cookie for targeting and measurement. 

Google has the power to deprecate third-party cookies in Chrome unilaterally, meaning that the industry does not have the choice to keep using the cookies. This move is intended to happen within just six months during the second half of 2024. Instead of transitioning over years, the industry will have to adapt quickly. 

In the end, third-party cookies for targeting and measurement will be gone — not just diminished or lingering behind the scenes. Of course, this assumes that Google will adhere to its cookie deprecation timeline.

Post-cookie deprecation, billions in programmatic ad spend will need to shift

Since it first announced the retirement of cookies from Chrome in January 2020, Google has twice pushed the timeline from its original target of early 2022. As a result, many in the industry remain skeptical that it will move on its current plan. Antitrust scrutiny from the U.K.’s CMA and questions about the readiness of Google’s Privacy Sandbox technologies could disrupt Google’s plan.

According to eMarketer, more than $123 billion in programmatic advertising is transacted via real-time bidding on the open internet. Using this as an approximation of ad spend bought against audience data, including cookies, is fair. This means that starting in July 2024 and by the end of the year, more than $123 billion of programmatic ad spend needs to shift to new targeting and measurement technologies. 

That is a massive amount of ad dollars that need to shift in a very short amount of time. While there may be further changes to Google’s timeline, teams shouldn’t assume Google will delay things at this stage. 

From alternative IDs to new behavioral targeting tech, stakeholders must plan now for a smooth transition

Indeed, all participants in the digital advertising community must develop 2024 plans that incorporate the assumption that between July and December 2024, the third-party cookie will cease to exist. For business continuity, all ad spending, technologies, business processes, products and services powered by third-party cookies must be transitioned to alternatives.

Brands, agencies, publishers and ad tech companies are all in the midst of their 2024 planning cycle. Since the cookie will cease to exist during that planning horizon, the industry can ignore it no longer and must incorporate it into 2024 plans.

For instance, Dstillery is taking a number of steps to prepare itself and its clients for the transition. This includes making audiences available in UID2s and exploring other alternative IDs. Success with UID2 technology will also require more effort, including innovative, first-of-its-kind, behavioral targeting technology — called ID-free, in this case — which complements these alternative IDs and extends their reach.

The industry must work with its data and activation partners to understand their plans and how stakeholders can work together to minimize disruption for their client brands and agencies. Partnerships that succeed will provide as seamless a transition as possible. As 2024 is a crucial year for marketers — change is coming, and teams must adapt — it will also be a challenging year where open-mindedness, confidence and curiosity will be rewarded in the new programmatic landscape. 

Sponsored by Dstillery

https://digiday.com/?p=530284

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