Connected TV and The Cookieless Future of Advertising

Thrive in the Cookieless Future with CTV Advertising

The advertising landscape is undergoing a seismic shift with the deprecation of third-party cookies. Marketers have relied on these tiny and trackable bits of personal data for decades without a hitch. Rising concerns around consumer privacy has led tech giants like Google to phase out the cookie entirely by early 2025, per Google. Now, left with a dwindling cookie jar, advertisers are forced to find new ways to reach audiences and measure campaign effectiveness.

Here's the good news: Connected TV (CTV) advertising offers a powerful solution in the cookieless future. Its advanced targeting and campaign measurement capabilities make CTV a reliable alternative for reaching audiences authentically on the largest screen in the home — all without the third-party cookie.

Not to mention, CTV viewership is skyrocketing. A staggering 80.7 million U.S. households (nearly 60 percent of all U.S. households) are projected to be cord-cutters or cord-nevers by 2026, according to eMarketer. This presents a significant opportunity for advertisers to connect with new customers and expand brand reach.

This blog is your guide to navigating the cookieless future and capturing its opportunity with CTV advertising. Whether you're a seasoned media planner or just starting out, we'll equip you with the knowledge and strategies to thrive in this evolving landscape.

The challenges of a cookieless future for traditional advertisers

Third-party cookies have long allowed digital advertisers to target specific audiences with precision, measure campaign effectiveness, and optimize their spending on desktop, search, or social media. But as third-party cookies crumble, these advertisers face several challenges.

Difficulty with audience targeting

Advertisers rely on cookies to track user behavior across websites, build detailed profiles of their ideal customers, and target users in digital ad campaigns. Using the cookie, they were able to reach users most likely to be interested in their products or services.  

For instance, Nike could serve display ads for their latest running collection to consumers who have browsed their running shoes online. Beyond browsing behavior and purchase intent, cookies may also collect inferred demographics, including age, location, and gender. These insights could then inform detailed audience segments to target similar audiences across websites, apps, and streaming platforms.

Without cookies, advertisers lose these granular insights, making it harder to identify and reach their target audience effectively.

Disjointed campaign measurement and attribution

Measuring the success of online advertising campaigns depends on accurately attributing conversions (e.g., purchases) to specific ad impressions. Cookies play a crucial role in this process by tracking user journeys across different touchpoints.  

For example, Toyota may run a display ad campaign for their latest RAV4 model across various websites. A user sees the ad on a news website (impression), clicks on it (click-through), visits the Toyota website (website visit), and eventually makes a purchase at a dealership. With cookies, Toyota can track this entire journey and attribute the sale to the specific ad the user saw.

In a cookieless future, accurately attributing conversions becomes more complex. Without cookies to track the user journey across these touchpoints, it becomes challenging for Toyota to understand the true effectiveness of their campaign and their return on investment (ROI).

This barrier to campaign measurement is top-of-mind for advertisers who rely on third-party cookies. In fact, a 2023 Statista survey revealed that marketers' top concern is the decline in measuring campaign effectiveness due to the deprecation of third-party cookies.

These challenges can significantly impact the effectiveness of traditional online advertising strategies. However, the rise of CTV advertising offers a promising alternative in this evolving landscape.  

The promise of a cookieless future for CTV advertisers

Third-party cookie deprecation will require advertisers to rethink their approach to digital advertising. Investment in alternate channels such as CTV could pose one of many solutions. While CTV can utilize third-party cookies just like any other third-party data, it doesn’t rely on them to reach and measure target audiences.  

Instead, CTV uses alternative targeting methods and reliable measurement capabilities to help ease the transition away from cookies for CTV advertisers.

Alternative targeting methods

CTV platforms leverage anonymized device IDs to target specific devices within a household. This allows advertisers to reach viewers in the comfort of their living room as with traditional TV advertising, but with the added benefit of precision. Unlike traditional TV where targeting is based on broad demographics, device IDs enable a more measurable approach.  

For instance, Wells Fargo could target their new mortgage product ad to devices historically used by viewers who have shown interest in homebuying or have entered a specific life stage, such as recently married or new parents. Crucially, this targeting relies on the anonymized device ID itself, not any data gleaned from third-party cookies.

CTV also excels at contextual targeting. Like other ad platforms, CTV advertising can align your ad with the context in which it appears. Like placing a McDonald’s ad with an NFL endorsement during the big game, this contextual approach resonates naturally with viewers, making it seem as if an ad was made specifically for them.

The shift away from third-party cookies also calls for advertisers to enhance first-party data collection and/or partner with platforms with a wealth of first-party data. CTV platforms are a goldmine for first-party data, gathered with user consent based on viewing behavior on the platform itself. This data empowers advertisers to target audiences with greater precision without relying on external sources. Examples include demographics, viewing history, and content preferences — all fueling campaigns that reach target audiences you already know are interested in your brand.  

Using their first-party data, Hulu could partner with a grocer to target viewers who frequently watch cooking shows with ads showcasing gourmet ingredients. All this is thanks to privacy-compliant first-party data, a stark contrast to third-party cookies. This shift towards alternative targeting and rich first-party data positions CTV as a powerful solution for advertisers navigating a cookieless future.

Advanced measurement capabilities

Unlike cookie-reliant advertising, CTV empowers advertisers with a future-proof way to measure and achieve the ROI/ROAS they desire. From basic user demographics to user interests, viewing habits, and more, CTV advertisers can utilize user characteristics to create a more targeted and personalized ad experience, leading to greater ad relevance, engagement, and ROI/ROAS.

By utilizing deterministic data and first-party data partnerships, CTV advertisers can access data that can be confidently linked to specific individuals. This data allows for more precise campaign measurement across platforms, leaving data-driven advertisers with a clear way to validate audiences once the cookie disappears for good.  

Furthermore, advertisers can lean on CTV measurement vendors to gain a holistic view of campaign performance across devices and platforms. These companies specialize in CTV measurement and attribution, offering solutions that help advertisers understand the true impact of their CTV campaigns.  

For example, App Science®, Sabio’s exclusive measurement partner, allows advertisers to measure CTV ad campaign effectiveness across publishers on one easy-to-use platform. Through their cookie-free 55 million household graph, App Science allows you to track KPIs like reach, engagement, and attribution to help you better understand target audiences and inform future campaign strategies.

A brief history on cookies

First-party cookies, a brainchild of Netscape engineer Lou Montulli, started as a simple convenience — remembering user preferences on websites. Advertisers saw the personalization potential (imagine The New York Times showing finance ads to a frequent reader), and craved a wider reach beyond a single website.

Third-party cookies, developed by ad networks, offered the solution. By tracking browsing habits across domains, they built detailed user profiles, fueling programmatic advertising and real-time ad bidding based on user data. For advertisers, this was a game-changer, enabling hyper-targeted campaigns, effective retargeting, and precise campaign measurement.

But with great power came concerns. User privacy took center stage, prompting major browsers to phase out third-party cookie support entirely. Thankfully, CTV advertising offers a future-proof alternative that respects user privacy while delivering targeted and measurable advertising.

Sabio: Your partner for the cookieless future

The cookieless future presents challenges, but also exciting opportunities for advertisers. CTV advertising stands out as a powerful solution that addresses both the ongoing privacy concerns of consumers and the deepening targeting concerns of advertisers. Sabio is here to help you navigate this transition.

Sabio's CTV ad solutions address the complexities of reaching diverse audiences in a fragmented market without relying on third-party cookies. We go beyond general demographics, leveraging data to target viewers based on passions and interests. Plus, our technology lets you leverage a wide range of audience targeting methods that best suit the goals of your campaign to maximize ad spend.  

Leveraging our CTV-first, in-house creative studio ensures your message leads to maximized engagement. Our device-agnostic approach ensures your ad reaches viewers wherever they stream. Plus, 99 percent of our campaigns deliver in full, guaranteeing maximum impact.

As a diverse-owned company, diversity is in our DNA. We help you reach culturally diverse audiences across platforms.

Connect with Sabio

Get in touch with our team of CTV advertising experts to discuss how Sabio can help your brand thrive in the cookieless future.

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