Faced with a Cookie-Free Future, How Can Digital Advertisers Adapt?

The digital marketing landscape is undergoing one of its most significant transformations in recent memory—the move away from third-party cookies. This shift, driven by increasing privacy regulations and changes in consumer expectations, is forcing marketers to rethink their digital targeting strategies fundamentally. What will the digital world look like after such a sweeping change?

In a recent data and insights report from Material and our partners at NewtonX, The Digital Lead: 2024 Advertising Insights & Tech Trends, we can see that future-focused marketers are already exploring options to adapt and thrive in a cookie-free future. First-party data strategies, machine learning systems and other alternative targeting methods are on the rise ahead of the cookie cutoff. Let’s take a closer look at how industry professionals are adjusting their digital philosophies to prepare for this new reality.

The Post-Cookie Pivot

The deprecation of third-party cookies has been on the horizon for years, prompting forward-thinking marketers to assess and prioritize alternative targeting tactics. Perhaps as a result of this extended lead-up, most respondents in our study expressed moderate or low levels of concern about the coming shift. According to the research, only 10% of total respondents are deeply concerned – less than half the number of advertising professionals who express no worries at all. Instead, many are focusing their attention on pivoting into new strategies.

Our report reveals a growing industry-wide appetite for first-party data applications, as organizations look to leverage the wealth of information they directly collect from their audiences and customers.

Approximately one-third of marketers (31%) have already tested new targeting strategies ahead of full cookie deprecation. First-party data (54% of respondents) leads the pack, followed closely by CPC/CPA models (49%) and contextual targeting (48%). Machine learning models (42%) for analyzing patterns and delivering insights from customer data also receive notable interest, further evidence of AI’s growing role in the marketer’s toolkit.

While the end of cookies has upped the urgency for advertisers to adopt new tracking and targeting methods, the shift also aligns with broader cultural trends in which consumers are demanding greater data privacy and more control over their personal information. We can see this transition as an opportunity, then, to build deeper and more trustful relationships with consumers while exploring emerging technologies. The human element is crucial, and impactful marketing and advertising strategies must take into account evolving consumer attitudes, behaviors, preferences and expectations.

Potential pitfalls and how to avoid them

Of course, the transition to a cookie-free world is not without potential pitfalls. One of the key challenges marketers face is the risk of over-relying on a single source of data or technology. Our report emphasizes the importance of diversifying targeting strategies to mitigate this risk, suggesting a balanced media mix that incorporates multiple channels and tactics. The results showed close to half of marketers (45%) anticipate a change to their media mix because of third-party cookie deprecation, with expected change more common among agencies than advertisers.

Additionally, the move towards strategies that emphasize first-party data raises questions about scale and accessibility, particularly for smaller organizations that may not have the same data collection capabilities as larger counterparts. Collaborative approaches, such as data partnerships and consortia, offer potential solutions, enabling advertisers to pool resources and achieve greater scale while maintaining adherence to privacy standards.

A new era of digital marketing

The deprecation of third-party cookies comes at a time of deep evolution in the digital marketing landscape, characterized by a heightened focus on privacy, personalization and consumer trust. While challenges abound, there are also ample opportunities for marketers willing to innovate, embrace new technologies and adapt their strategies.

As one advertising pro put it, when describing some of the positive trends across the digital landscape, “Many more tools are available for relatively cheap. Analytics are growing more robust, and there are more opportunities to connect with our audience.”

For more fresh perspectives and expert insights on the end of cookies and the future of advertising, check out the full report, The Digital Lead: 2024 Advertising Insights & Tech Trends.