Digital ad networks looking for new ways to target individuals across websites and devices may turn to second-party data sharing.
There are two types of Internet cookies. First-party cookies facilitate the personalization of her website by storing session data and “remembering” visitors and their preferences. For example, these cookies keep users logged in to her website over and over again.
Third-party cookies track individuals across websites and have powered performance marketing for years. These small pieces of code lead to more relevant ad targeting and, for many businesses, a better return on ad spend.
However, it is natural that such tracking cookies raise privacy concerns. That’s why many watchdogs, regulators, and companies have joined forces this year to remove most third-party cookies. This includes major web browsers such as Google Chrome, Apple Safari, Mozilla Firefox, Opera, Brave, and Arc.
Despite the privacy enhancements, eliminating tracking cookies is not entirely positive. Visitors will see many offers for products and services they are not interested in, but advertisers, including e-commerce merchants, will spend more on advertising for the same revenue.
A possible solution is second-party data sharing, which many display networks already employ.
Let’s look at three implementation techniques.
programmatic email advertising
Programmatic email advertising uses hashed email addresses to identify specific users and serve relevant ads without the use of cookies.
The example below uses one of the advertisements for TactiStaff, a military-style cane.
Programmatic email advertising already works without cookies.
This ad ran in a daily email newsletter offering sugar-free dessert recipes. That might not seem like a good place for a stick ad, but this ad wasn’t meant for context. It was targeted at subscribers.
This ad uses a simple HTML structure (an anchor tag surrounding an image tag) within the email.
Both the link and the image path include a hashed version of the subscriber’s email address as a parameter, making the process privacy compliant.
For example, when AOL Mail attempts to load an image, it calls an ad server containing the hashed email address. The ad server matches the hash against a known ID graph to generate relevant and targeted ads.
This targeting works because newsletter publishers share first-party data (hashed email addresses) with advertising platforms.
informed web advertising
Continuing with the recipe newsletter, let’s assume that this same publisher also shares data via links to their own content.
The publisher added the subscriber’s hashed email address or similar identifier to each link. If she clicks to read the sugar-free brownie recipe, that subscriber’s information is passed to her JavaScript on her website, which displays targeted ads.
The script sends the hashed email address to the ad server. The ad server compares the hash to its database and delivers targeted ads without the use of tracking cookies.
This data sharing method is currently common practice.
active login
Another, less common, cookie-free technique for maintaining ad performance involves active login.
This process requires three, and sometimes four, parties to work together to deliver targeted ads: publishers, ad networks, community software providers, and email service providers.
Individuals viewing ads must be registered in the publisher’s community. The parties share a hashed email address or similar unique identifier. This can be complicated, but it works like this:
- Email service providers add email hashes or other identifiers to every link in every message their customers send (perhaps billions of emails).
- When a subscriber clicks on a link to visit a publisher’s website loaded with community software, the subscriber is automatically logged into the community based on an identifier.
- When a subscriber logs in, the publisher shares first-party data with ad servers to generate relevant and targeted ads.
Impact on advertising
Programmatic email advertising, informed web advertising, and active login are examples of ad networks that keep their ads relevant and performing even after cookies die. Advertisers using major demand-side platforms may currently be benefiting from these approaches without realizing it.
So, while eliminating third-party cookies may interrupt advertising, targeting is not yet complete.
