Is Contextual Advertising the New Third-Party Cookies?

To some, it may seem as though strategic, targeted marketing cannot exist without third-party cookies. Third-party cookies have historically been used by many marketers for a plethora of reasons, including tracking website visitors, collecting data for ad personalization and targeting, as well as improving the overall user experience. Safari and Firefox are well ahead of the game, having blocked third-party cookies in their respective browsers since 2013. In February 2020, Google Chrome announced its plan to officially phase out the use of cookies, as more users are stressing the need for transparency and control over their privacy. Although Google has further delayed the blocking of cookies in Chrome until 2023, marketers must begin adjusting their marketing strategy ahead of time. 

The Path to a Cookie-less World

According to a recent Statista study, over 51% of marketers remain reliant on third-party cookie data for their digital advertising efforts. Although some big privacy updates may be underway, new tracking methods continue to emerge, creating light at the end of the tunnel for marketers. Currently, Google plans to only phase out third-party cookies on its browsers. However, insights gathered from first-party cookies, such as basic data about website visitors, are still fair game. Any first-party data collected, across all browsers, will remain intact even after Google’s privacy updates. 

With a first-party cookie, you can learn about user behavior within your site’s domain, how often users visit your site, and gain additional basic insights that can help develop or automate an effective marketing strategy. The only caveat is that without third-party cookies, marketers can no longer see data related to user behavior on other websites that lie outside of the brand’s own domain. In order to maintain reach and consumer targeting without the use of third-party data, marketers must begin using alternative digital marketing strategies, such as contextual advertising. 

Privacy-First Targeting: Contextual Advertising

Users’ privacy must be respected in order for marketers’ campaigns to prevail – that’s where contextual advertising comes into play. Contextual advertising refers to the practice of placing ads on webpages based on the specific content of those pages. This marketing strategy takes a privacy-first approach to targeting, meaning that marketers will work with a digital ad network to segment ads based on parameters such as keywords or website themes. When marketers target by context their ads are placed on a page based on the content in which the audience is already browsing. 

A recent study found that 69% of consumers were more likely to engage with contextually relevant ads over behaviorally-targeted ads. When utilizing contextual targeting, the webpage where the ad displays is the heart of the campaign. Marketers have the freedom to specify the ad’s topics, subtopics, and keywords – this makes it less likely that ads will follow a user where they don’t expect (or want) to see advertisements. Contextual ads are considerably more relevant to users and far less “creepy” feeling than cookie-based behavioral retargeting. Additionally, this will ensure marketers’ ads won’t end up displaying on the wrong site or next to inappropriate content. Being that contextual advertising doesn’t rely on intimate user details, it’s safer for marketers who want to ensure they’re showing ads on compliant pages. According to Digiday, when GDPR was set to take effect, many publishers shifted their advertising dollars from behavioral to contextual advertising, which is trending to drive improved ROI. 

In order to ensure contextual advertising campaigns are safe from fraudulent activity, marketers should consider partnering with an affiliate network or agency. When working with a well-equipped industry partner, marketers often have access to compliance monitoring, partner vetting, and anti-fraud technology paired with campaign management. At Perform^[cb], our dedicated in-house Compliance team supplies marketers with unparalleled brand assurance and proactive marketing compliance, in addition to combating fraud as a whole. With our proprietary anti-fraud software, PerformSHIELD, rules-based compliance algorithms and automated fraud-eliminating optimizations safeguard marketers from suspicious activity before it has the chance to reach campaigns. Learn how you can combat ad fraud and protect your brand in our Guide to Marketing Compliance. 

Next Steps to Maintain User Privacy

The move to contextual targeting will also mean a move back to brands themselves or partnerships with affiliates producing and distributing relevant content. We realize this is easier said than done, and will take a great deal of alignment and collaboration between marketers and publishers. While the end of third-party cookies is postponed to 2023, brands that choose to plan ahead will come out on top. Marketers must begin to test and lean into contextual advertising now, as it is an established strategy that historically has driven positive results while maintaining user privacy laws. 

Ready to reallocate and shift ad budgets? Reach out to our team of customer acquisition experts to learn more about overcoming the end of third-party cookies.