Cookie to Cookieless: The Latest Trend in Ad Buying?

As third-party cookies stare at their demise, discover the buy-side and sell-side trends for cookieless inventory here.

Last Updated: December 6, 2022

As third-party cookies stare at their eventual demise, cookieless inventory offers vast opportunities for both programmatic advertisers and publishers. 33Across recently conducted a study to identify the buy-side and sell-side trends for cookieless inventory. Check out the findings here.

Apple and Firefox removed the support for third-party tracking in the last three years. Google, too, has announced that it will withdraw its support for third-party cookies, with the revised date set to 2024Opens a new window . All these are forcing digital advertisers to relinquish one-to-one precision marketing using third-party cookies. Further, a significant percentage of the internet is now operating on cookieless environments, making it difficult for publishers to monetize. This is a massive revenue gap for publishers, and for advertisers, it translates into missed campaign opportunities to target in-market audiences. As such, focusing beyond cookied inventory offers both an enormous opportunity.

To identify the emerging sell-side and buy-side trends for cookieless inventory, 33Across recently conducted a study. The following are a few key takeaways.

See more: Only 8% of Advertisers Prepared for a Cookie Less Future: Data Reveals

Programmatic Spend Increased Across Most Sectors

The study had a few key questions related to the demand side, including the vertical that purchased the most cookieless inventory, the share of programmatic buying for each advertising vertical by addressable state and how it is trending, and the comparison between cookieless and cookied CPMs.

It was found that August’s performance remained flat and saw a slight uptick in September. There was an increase in spending from the Telecom, Tech, Insurance, and Auto sectors. Except for Retail, almost all other categories remained flat or had a slight increase in spending in September. For Retail, the back-to-school spending occurred in July in August. According to DeloitteOpens a new window , back-to-school spending was expected to increase by 8% year-on-year (Y-o-Y). 

According to various studies, digital ad spending is expected to increase before 2022 comes to a close, with several categories expecting double-digit growth. Major events like the FIFA World Cup, the mid-term elections, and the holiday shopping season are expected to increase media spending.

Ad Buying Shifts From Cookie to Cookieless in Some Industries

When it comes to cookie vs. cookieless buying, Food and Drink (F&B) had a 69% month-on-month (M-o-M) growth in cookieless buying in September, shifting the spending from cookie to cookieless buying. Similar trends were seen for a few other sectors. For insurance advertisers, cookieless buys outpaced the cookie, with a 12% gain in share of voice (SOV). Overall, the top spenders in cookieless were Insurance, Tech, F&B, and Telecom.

That said, a few sectors like Pharma/OTC, Entertainment, Retail, Travel, and Auto still saw a slight growth in cookie ad buying than cookieless.

Distribution of programmatic spend (SOV) across cookie and cookieless traffic

Distribution of programmatic spend (SOV) across cookie and cookieless traffic

Source: Programmatic Cookieless Trends ReportOpens a new window

Given these trends, F&B advertisers should continue investing in cookieless inventory during this holiday season to capture mobile shopping audiences efficiently. Retailers who need to reach new customers in Firefox and Safari environments with low competition should consider testing cookieless inventory as a less expensive alternative to social ads. There are also opportunities for sectors with low cookieless SOV to rebalance their programmatic budget to target new audiences at lower CPMs.

Cookieless CPMs Are Increasing

The study found that while cookieless inventory continues to transact at lower CPMs, as more competition enters the marketplace, these CPMs are beginning to rise across several sectors. In September, the average cookieless CPM discount was 35% lower than cookie inventory. Pharma/OTC, Travel, Auto, Telecom, and Finance averaged 50% lower CPMs for cookieless inventory. But it can be seen that the discount was reduced in September across several sectors like Insurance, Auto, Finance, and Retail.

Comparison of CPM discounts for cookieless inventory

Comparison of CPM discounts for cookieless inventory

Source: Programmatic Cookieless Trends ReportOpens a new window

As spending on cookieless inventory increases due to demand, CPMs will continue to rise. Targeting cookieless inventory is expected to increase campaign budgets and give access to new customers. Marketers new to cookieless targeting should consider testing campaigns to reach new audiences at lower CPMs.

Content-driven Publishers Sell the Most Impressions

On the supply side, a few key questions emerge, such as the content categories monetizing the most cookieless supply and the share of programmatic monetization for cookie and cookieless for each category.

The study found that content-driven publishers, like Lifestyle, News, and Sports, sell the most impressions programmatically. Irrespective of the addressable state, advertisers spend money based on audience, brand-safe environments, and performance optimization metrics. 

The last quarter of this year is a time for more content consumption as consumers look for gift guides, product reviews, holiday recipes, and more during the holiday season. Further, news and sports publishers are expected to see increased traffic due to Football World Cup and ongoing geopolitical tensions. That said, while digital ad spending is expected to exceed $123 billion in 2022, according to eMarketerOpens a new window , market conditions will affect advertising budgets.

Sports, Health and Wellness Publishers Lead With Cookieless Monetization

The study found that Sports, Health and Wellness, and News publishers lead with cookieless monetization. Other publishers with higher cookieless SOV are Tech, Lifestyle, Gaming, and Travel. Seasonality factors may have increased cookieless monetization for Sports, Lifestyle, and News publishers.

A few opportunities exist for publishers. The ongoing holiday season will increase demand for cooking, gaming, and lifestyle inventory. This will give publishers additional opportunities to monetize their open inventory. Sports publishers will continue to see growth due to various sports events. News publishers, too, will continue to see growth, capturing audiences on both mobile and desktop devices.

See more: Publishers Must Embrace Flexibility and Cooperation in a Cookieless Future

Summary

Programmatic buyers have a growing appetite for cookieless inventory. Early adopters are already taking advantage of accessing new audiences at discounted CPMs that have slowly started increasing. There is a significant variance in usage among industry sectors. However, market leaders in certain sectors are increasingly becoming less reliant on cookies. 

On the other hand, publishers with cookieless monetization strategies are seeing significant incremental revenue growth. Publishers benefit from new revenue generated from differentiated demand and earn revenue beyond third-party cookies.

Overall, this is the right time for both advertisers and publishers to experiment with cookieless strategies to increase reach to new audiences and revenues.

What do you think are some of the buy-side and sell-side trends for cookieless inventory? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .

Image Source: Shutterstock

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Karthik Kashyap
Karthik comes from a diverse educational and work background. With an engineering degree and a Masters in Supply Chain and Operations Management from Nottingham University, United Kingdom, he has experience of close to 15 years having worked across different industries out of which, he has worked as a content marketing professional for a significant part of his career. Currently, as an assistant editor at Spiceworks Ziff Davis, he covers a broad range of topics across HR Tech and Martech, from talent acquisition to workforce management and from marketing strategy to innovation. Besides being a content professional, Karthik is an avid blogger, traveler, history buff, and fitness enthusiast. To share quotes or inputs for news pieces, please get in touch on karthik.kashyap@swzd.com
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