“You may remember that when Google first announced their intentions [to phase out cookies], I was somewhat skeptical,” Jeff Green reminded investors, spiking the football on a prediction that raised eyebrows at the time.
He cast similar doubt on whether Google would deprecate third-party cookies by 2023. “We’ll just see when we get there.”
Regardless, programmatic faces certain upheaval, as marketers focus on first-party data solutions.
“Unleashing the potential of first-party data requires a few things,” Green said. Publishers must preserve relationships with their users, as brands must do with their customers. All players must widely integrate. And marketers need “symmetric performance data” to understand how campaigns work.
That last bit is a shot across the bows of the walled garden platforms, which don’t provide “symmetric” data to advertisers; First-party data goes in, but no user-level data comes out.
The Trade Desk has put its weight behind the UID2 as a post-cookie online advertising currency. Right now, the programmatic ecosystem is “at an inflection point” where it must consolidate to reach critical scale on one or two IDs, or risk losing out. Green compared it to credit cards, since merchants practically must support Visa and Mastercard, and can choose to accept cards like American Express and Discovery.
LiveRamp faced some investor grilling about its revenue exposure to Apple’s ATT, and whether ATS – a tool site publishers use to collect emails to use in advertising – might lose momentum due to Google’s third-party cookie extension.
“The real pressure for migrating to ATS doesn't come from Google's date,” said CEO Scott Howe. He said that even with third-party cookies available on Chrome, Safari and Firefox traffic is stripped of third-party cookies, and publishers are seeing yield increases just in re-identifying addressable audiences on those browsers.
“There are certainly winners and losers in the industry but what we found over time is addressability trumps all others,” Howe said.
Walled gardens like Google and Facebook have been the big winners, but publishers are fighting for addressability as well. “That's why we've taken a position of we no longer really care too much about what else happens in the industry. We believe authentication (i.e. collecting emails) is a better way to go.”
Isn’t Roku in an enviable position, since CTV is relatively unaffected by privacy restrictions to web cookies or to Apple’s ATT?
That was the question posed by one investor.
“I would not characterize that as a tailwind for CTV generally,” said SVP of platform business Scott Rosenberg. He said it is a headwind for independent ad tech, though, since device IDs and cookies will become scarce for companies without direct customer relationships.
Rosenberg said Roku’s “strongest advantage” working with marketers is that it can onboard data and target precise individuals.
“I would definitely say that we're less affected relative to those [independent ad tech] entities because of this privilege: the direct consumer relationship that we've got,” he said.
Criteo estimated that identity restrictions accounted for a $43 million revenue hit in the first half of 2021, largely driven by Apple’s ATT. That’s below Criteo’s initial forecast of a $60 million shortfall, though CFO Sarah Glickman said Apple’s delayed roll out of ATT means the losses will be spread more into the second half of the year.
For iOS traffic with the new iOS installed, Criteo is seeing opt-out rates of 65%, slightly higher than anticipated.
Criteo is particularly exposed to advertising ID loss (it’s bread and butter is retargeting individual users, after all). But product chief Todd Parsons said it’s insulated because of the large network of advertisers with first-party data onboarded on one side, and retailers and publishers with emails and other potential IDs to match.
“We have a better opportunity to get more matches and a higher degree of targetable audience because we're looking at so many apps and so many marketers at the same time,” Parsons said.
For Zynga, the loss of advertising identity, particularly the disappearance of Apple’s IDFA as a tool for targeting across apps, meant new users were harder to find – and thus more expensive.
“The adoption of Apple’s privacy changes resulted in a higher cost to acquire our players,” said CEO Frank Gibeau. Zynga scaled back its user acquisition goals for Q2 and the back half of the year. If it can’t target campaigns to likely installers, its marketing budgeting risks becoming unsustainable.
Zynga is also plumbing other direct marketing channels where it can target ads to individuals by device ID. “We have been investing in Android as we have seen the dynamics unfold inside of iOS.” This partly explain why Google and Facebook had such strong revenue in the past quarter, despite themselves being hampered by Apple’s privacy policies.
But prices are inflating in Android, too, as other marketers also rush toward an ecosystem where they have more advertising visibility.
Zynga also acquired Chartboost in May, which should improve the company’s advertising overall, Gibeau said. “(With) the third-party ad business, the more information and intelligence that we gather through the systems, we will make better decisions. I’m very excited about having that capability inside Zynga.”