What are the limitations of using cookies for display ad targeting?

Privacy regulations, exemplified by GDPR and CCPA, restrict cookie-based display ad targeting. Advertisers face challenges due to stringent user consent requirements, emphasizing data minimization and user rights. Regulations limit cross-site tracking, impose storage duration constraints, and require careful handling of sensitive data categories. Heightened user awareness and the evolving regulatory landscape further impact the efficacy of cookies for targeted advertising. Advertisers must adapt strategies to comply with privacy laws while exploring alternative methods amid changing privacy dynamics.

Privacy regulations are the favorite topic of policymakers across the developed markets. This is because politicians like the users, don't really understand how the technology works. Although this may be a good way to get people's votes and forward one's political career, at the end of the day, this is not helping the users keep their data safe and private. The main reason is that users are sharing their data to use the software. Additionally, users tend to be the weakest link in the data protection system. We see a lot of formalities making the web team's job harder, without the significant improvement in terms of data protection.

Cookies for display ad targeting have inherent limitations. Privacy concerns and increased user awareness lead to cookie blocking or deletion, limiting accurate user tracking. Moreover, cross-device tracking is challenging, hindering a comprehensive understanding of user behavior. Emerging alternatives, like LinkedIn's Revenue Attribution Report or server-side conversion tracking, showcase innovative strides. Server-side tracking, in particular, bypasses browser limitations, potentially offering a more robust solution, but its efficacy and data quality are yet to be fully realized. Navigating these limitations requires a forward-thinking approach, embracing evolving tools and methodologies while respecting user privacy.

This is almost a moot point, as Google Chrome, which has the largest share globally among browser usage, will completely block third-party cookies by the end of 2024. It is already blocked in 1% of users as of January 2024 and will gradually go up from there. Also note that these type of cookies are already blocked in all other major browsers. Advertisers will need to be get more comfortable in other ways of targeting, such as using CRM or first-party data, ACR data (in CTVs), contextual data, or machine learning optimization.

The use of cookies for display ad targeting has several limitations. Firstly, users can delete or block cookies, which affects tracking accuracy. Secondly, cookies are specific to a single browser and device, making it difficult to track users across multiple devices. Thirdly, cookies can store personal information that may be accessible to third parties, raising privacy concerns.

-Browser Restrictions: Safari, Firefox, and Chrome have features limiting third-party cookies. -First-Party Cookie Blocks: Some browsers, like Brave and Tor, also block first-party cookies. -User Ad Blockers: Many users use ad blockers, privacy tools, or VPNs to mask or prevent cookie data. -Reduced Reach: These limitations can significantly reduce the reach of display ads relying on cookies. -Decreased Relevance: Relevance of ads may diminish due to limited tracking and data availability.

This is a big problem because nobody wants to deal with privacy laws and fines. Browsers are making it easier for people to block ads by highlighting features for tracking and blocking. As a result, more customers are choosing to block ads.

Browser restrictions pose a significant limitation to using cookies for display ad targeting. Many browsers, including Safari, Firefox, and Chrome, have introduced features that restrict or disable third-party cookies—commonly used for tracking users across websites. Some browsers, like Brave and Tor, go further by blocking first-party cookies, impacting website functionality related to user preferences. Additionally, the widespread use of ad blockers, privacy tools, and VPNs further hinders advertisers' ability to leverage cookie data for personalized display ads. These factors collectively diminish the effectiveness of cookie-based targeting strategies.

The vast majority of digital marketing budgets these days are being used for performance advertising. In this case, the display is a less important conversion tool compared to, let's say search ads or social (video) conversion ads. Therefore, the question is, how important is the display ad tracking? I would say, this is not the crucial aspect of performance advertising. Dis is because performance campaigns use all available user data (mainly coming from mobile operating systems and applications). Additionally, innovative solutions such as server-side tracking and helping Facebook and Google to effectively complete the customer journey.

People switch devices all the time - expect it: 📲 Mobile 🖥️ Work 💻 Home This limits cookies as well as UTM tracking. To mitigate this: ✅ Use platforms like LinkedIn which track a user across devices ✅ Use LinkedIn's Revenue Attribution Report to compare company impact to sales ✅ Ask the user 'How did you hear about us'

Cookies are inadequate for modern marketing and AdTech, especially in cross-device tracking due to privacy concerns and inefficiency across multiple devices. Here some key reasons: - Cookies are limited to individual browsers, often single sessions. A single user might use multiple devices and browsers, resulting in fragmented and incomplete data. - Cookies are anonymous and temporary, resetting when a browser closes on devices like smartphones and tablets. Without personal user info, cross-device tracking is complicated and requires the building of predictive models, processing various signals. Traditionally, this issue can be tackle by using deterministic info and exact match rules, but only few can do it effectively.

Cookies for display ad targeting have inherent limitations. Privacy concerns and increased user awareness lead to cookie blocking or deletion, limiting accurate user tracking. Moreover, cross-device tracking is challenging, hindering a comprehensive understanding of user behavior.

The data collected via cookies is not always reliable or accurate. Users often clear their cookies, use multiple devices, or share devices with others, which can lead to inaccurate targeting and diluted ad effectiveness. For an eCommerce business seeking an alternative ad tracking solution, I highly recommend NestAds for several reasons: - Avoid iOS 14 blockage - View all advertising data across channels in one visual & easy-to-use dashboard - Understand customers’ buying process with multi-touch attribution & cohort - Identify top-performing touchpoints to reduce wasted ad spend & scale faster - Gain insights into your creative performance with advanced analysis reports

Cookies have always been imperfect and 3rd party cookies now limited to Chrome browsers only. Apart from scope limitations , cross device targeting (eg coherent advertising across mobile, laptop, ctv) is not possible limiting omnichannel cookie powered campaigns, a different user on same device may have same cookie etc (therefore no link with privacy consent). All in all an imperfect solution and its great to see identity resolution vendors build a better system

LinkedIn and 3rd party systems are creating some interesting tools for B2B marketing. A few alternatives: 📊 LinkedIn's Revenue Attribution Report 📊 Dreamdata 📊 HockeyStack

Identity resolution offers the most direct alternative identifier to a 3rd party cookie. There are three main methods 1. probabilistic - a patchwork of signals such as ip address, apps installed, are stitched together to resolve to a single user 2. deterministic - 121 data such as phone number or email address are collected by the publisher or a direct to consumer brand such as telco and used 3. cross domain 1st party cookie techniques (rare but used). Each have limitations of scale and interoperability with privacy-centric upstream vendors likely to block attempts e.g. Apple's Privacy Relay

An interesting and innovative approach is server-side conversion tracking. This could be the future of online conversion tracking. What is it? Instead of browser cookies, Facebook is tracking users' behavior on the server side, without jeopardising user data. We are still to see the quality of data and conversion optimization coming from this approach, but it does sound like a good idea. At the end of the day, every user website interaction is being communicated to the servers where the websites are being hosted.

Advertisers are increasingly exploring alternative methods to complement or replace cookie-based targeting. While these alternatives, such as contextual targeting or first-party data utilization, offer more privacy-friendly approaches, they also come with their own set of challenges. Contextual targeting relies on the content of the webpage rather than individual user data, potentially limiting specificity, while building and leveraging first-party data requires a more direct relationship with users, often necessitating creative strategies to incentivize data sharing. Adapting to these alternatives demands a nuanced approach to ensure effective and ethical display ad targeting in the evolving digital advertising landscape.

The environment is dynamic with privacy regulations clarified by Regulators’ actions and Google, Apple making changes effecting the open internet. Publishers and Buyers probably determine weak probabilistic identity solutions do not offer enough differentiation to contextual w/out 121 marketing and alt methods for frequency capping. Secondly buyers and publishers need to sync in solutions where identifiers, contextual attention to ensure addressable ad ecosystem remains competitive

Everything happening with privacy-related regulations indicates the importance of direct communication with existing users. Retention rates and average user values are becoming more important in this context. Digital advertising should be used for initial client acquisition. Real business comes from direct customized communication with users and establishing long-term relations.

Even as a marketer, I am someone who diligently turns off cookies each time a website prompts me. I don't want to be found, I like to find.