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What comes after cookies?

5 minute read | Molly Poppie | June 2024
Molly Poppie, Nielsen Global Head of Product & Strategy

For nearly thirty years, third-party cookies have played a critical role in online advertising, content design and analytics, enabling advertisers to serve relevant ads and personalized experiences to consumers—and measurement companies like Nielsen to provide valuable campaign and content viewership data.

Today, 75% of marketers across all major industries still rely on cookies to run their campaigns, and 45% spend at least half of their marketing budgets on cookie-based activations. This adds up to a lot of money. Programmatic display, for instance, is a $160 billion business in the U.S. alone, and the vast majority of it is still based on third-party cookies. 

Even though Google has pushed out its cookie depreciation plans into 2025, their end will inevitably come. But what comes after cookies doesn’t need to be bleak. In fact, moving past cookies might usher in not just a more privacy-compliant digital future but a more effective advertising ecosystem, too.

An ID for an ID

When the prospect of cookie deprecation first hit the industry, most of the thinking went to finding a direct replacement—an ID for an ID—that would satisfy privacy regulators and leave the adtech infrastructure mostly untouched.

Many candidates emerged over time, including ID5, RampID, UID2 (and its European counterpart, EUID); device IDs from smartphones and CTV devices; IP addresses, despite the growing adoption of VPNs; and hashed emails (HEMs), a particularly attractive alternative considering the widespread use of email for app and website authentication today.

The consensus among industry observers is that there won’t be a dominant replacement for third-party cookies anytime soon, and most large publishers and advertisers are testing as many of those alternatives as possible to gain a better understanding of their strengths and limitations. We’re doing the same thing at Nielsen, sourcing a broad range of identifier types and putting them to the test.

Person-level graphs

Another recent development has been the rush by publishers and advertisers to collect first-party data in order to “feed the machine,” as one agency executive put it recently. Capturing first-party data can be very useful not just to collect data signals, but to create rich customer profiles that marketers can use to personalize offerings and target advanced audiences.

Consumer data comes from many different places, and it’s not always easy to make sense of it. It’s prone to errors, missing data, and it gets quickly out of date too. Even if your own first-party data is in a good place, there’s no guarantee that your media partners will be able to ingest it and sync it up in their systems without a universal ID to connect the dots.

That’s why many large publishers and advertisers are partnering with identity providers or developing their own identity graphs. Some players, like Amazon, are using AI in their DSP to connect first-party and third-party signals. At Nielsen, we’re leading the charge with a proprietary measurement grade graph that fundamentally shifts away from cookie and device-centric methods. This includes being an evangelist in the ecosystem and working with our clients and partners to evolve from passing cookie and device identifiers to HEMs, UIDs, and other resilient identifiers.

By integrating with audience segment data platforms (Like Liveramp and Experian) and mapping identifiers and devices to individual persons, Nielsen’s identity system maintains ID-agnostic audience assignment and measurement capabilities. This lets brands and publishers measure real people, not devices, and build on-the-fly audiences at scale for smarter, more durable cross-media planning and measurement.

ID-less solutions

Of course, not all advertising needs to be at the person level. And with so many changes underway in the digital landscape, marketers are making more room in their media budget for ID-less solutions like contextual and location-based advertising.

Harking back to the pre-digital era (when print, linear TV and radio dominated the advertising marketplace), these approaches are immune to privacy-related concerns. And with modern advances in third-party data quality, analytics and adtech infrastructure, they can deliver robust audience engagement just as fast as any ID-based or person-based targeting—often at a lower cost.

At Nielsen, we know from decades in the media business that the right context can make or break a campaign, and we have deep roots in local markets, too. So it is only natural that the evolution of our digital activation and measurement solutions would extend to context and location.

How are we doing it? We’re using Nielsen’s highly curated datasets to correlate audience attributes with an exhaustive range of keywords and sentiments for our contextual solution and with granular geographical units (like zip codes) for our location-based solution. This lets us provide advertisers with nuanced and privacy-compliant audience segments beyond other contextual and location-based solutions on the market today.

Chaos is a ladder

The uncertainty over what comes after cookies has many marketers waiting things out: hanging onto cookies until a clear alternative wins out. We think that’s a mistake. There’s no guarantee that Google won’t delay again, or that the industry will coalesce around a single alternative identifier once cookies are gone.

Instead, today’s chaos is the right time for you to audit your existing advertising ecosystem, assess your cookie-related vulnerabilities, and start experimenting with alternatives to see which ones perform the best for your needs. You’re likely to find that opening up your advertising infrastructure to accommodate more solutions will unlock more targeting opportunities for your company, not fewer.

Start learning now so that you can switch on your own terms.

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