The Death of Cookies and the Impact on TV

August 10, 2021

Tony Mooney, SVP of Advertising, ThinkAnalytics

Google’s announcement that it is delaying the end of third-party cookies until the end of 2023 might have brought a sense of relief to the digital advertising world, but I believe it has been a wake-up call for advertisers and is making them reassess how they spend their budgets in digital media.

Targeted advertising has been around for a long time now in various media. It is not new to digital and, in my experience, many of the historical shortcomings in the effective use of targeting have just been transposed to digital advertising, albeit on a much bigger scale and with much more smoke and mirrors. Digital advertising did not use the cookie as effectively as it could have and there has been no shortage of negative user experiences, such as consumers being targeted based on their browsing behavior without having expressed interest in buying a product or found themselves chased endlessly for a product they had already purchased.

In addition, there is, in my opinion, still too much focus on volumetric measures that major on exposure (such as clicks, impression and reach) rather than business outcomes. The real benefits case for targeting can only be properly evaluated when cause-and-effect business outcome performance is measured.


TV Benefits from a Post-Cookie World

The search is on for alternatives to the third-party cookie as its demise only favors the Big Tech platforms, assuming they can navigate competition law. A post-cookie world strongly favors social platforms where identity is tightly controlled, and easily leveraged. I think that Big Tech will be seeking to take a greater share of revenues currently harvested by the ad tech companies.

FLoC, Google’s replacement for cookies, that tracks AI-generated cohorts instead of individual users, aims to meet the privacy and anti-trust requirements of the various regulatory bodies. However, in many regards (such as ethics, privacy, and competition), it is not yet fit for purpose.

Addressable TV advertising is forecasted to grow globally by six times from $15.6 billion in 2018 to $85.5 billion for 2025, according to Rethink Research. For advertisers seeking a targeted, effective yet brand safe environment, I believe that one of the most attractive media in the coming years will be Addressable TV (ATV). ATV ad spend is forecasted to grow significantly over the next three years, which means marketing budgets will quickly migrate into this medium as it will be ID-driven with the additional benefit of being one of the most trusted types of advertising and, according to research, the media most likely to lead to a purchase.

I expect this will be very attractive to advertisers, who are reassessing the increased role TV has taken over the past 18 months and seek out TV operators that have quality first-party data that improves the addressability of advertising. Hence, those TV media owners with the capability of offering targeting attributes similar to digital are likely to be the winners. By “Similar to digital” I refer to a level of sophistication that is superior to traditional TV demographics and is, at a minimum, comparable to the targeting offered by such platforms as YouTube.

Many TV operators have sought to meet this challenge by purchasing third-party data attributes from one of the big providers, matched to their own first-party data. This has the benefit, at least, of avoiding the cost and complexity of generating their own attributes and enables them to offer advertisers a targeting taxonomy that is widely recognized.

However, when a TV operator does this, they lose all the unique and predictive value of their own viewing data and the targeting schema they then have is constrained to the limitations of the traditional categories that the third-party data provider offers and the latency of that data.


Maximizing TV’s Addressable Advertising Value

Fortunately, with a solution such as ThinkAdvertising, it is possible for a TV operator to quickly, cheaply, and efficiently generate valuable targeting attributes from its own data. Moreover, using the solutions’ unique content intelligence and understanding, an attribute set can be easily mapped to the pre-existing digital taxonomy specified by the Interactive Advertising Bureau (IAB), giving advertisers a standard means of planning, buying, and measuring targeting categories across providers.

Another key area that the ThinkAnalytics information science-based content intelligence helps solve with the loss of third-party cookies is in powering contextual targeting. Contextual targeting enables advertisers to reach audiences based on context or categories of interest. This is re-emerging as an increasingly popular choice for advertisers seeking to provide a positive user experience for potential customers.

In some ways, the death of the cookie might just force everyone to be more effective in the use of targeting, with a lot more focus on business outcomes rather than simple exposure metrics.

Let’s talk about how we can help optimize the value of your ad inventory by letting brands and advertisers run hyper-targeted, impactful, and affordable ad campaigns across broadcast and streamed TV.

Tony Mooney is the SVP of Advertising at ThinkAnalytics and an executive specialist in the application of data, analytics, and decision science to drive revenue and profit growth and improve business and organizational performance.