Today (4 January 2024) Google will switch off third-party cookies in 1% of all Chrome browsers, its first step in getting rid of them all. The move will be “a key milestone in our … initiative to phase out third-party cookies for everyone,” the company said.
For many news publishers — especially those without paywalls — the end of cookies will be one more in a long series of blows to the provision of free news for all, funded by advertising. Apple took away the ability to track users with cookies from the Safari browser years ago — making roughly half of all UK users largely unidentifiable for advertisers.
When Chrome’s cookies are fully removed, sources told Press Gazette, the open web will have mutated from a place where up to 90% of users were in some way targetable by advertisers, to a vast desert in which most users are essentially invisible to publishers and their clients. Google plans on removing all cookies by the end of 2024. (Sources tell Press Gazette that they expect that deadline to get pushed back by several months).
“Up to 60-70% of the market is already kind of fading itself out from using third-party cookies,” says Phil Acton, UK country manager for Adform, a media-buying platform.
We’re already seeing the economic fallout from what some are calling the addressability crisis. In the US last year there were nearly 20,000 media layoffs (not just in news media). In the UK, layoffs ran at 1,000 a month at the beginning of the year and continued as Reach axed 450 jobs, National World reduced headcount by 27%, and there were smaller job cuts at the Mail brands, The News Movement, and Pink News.
The fact that Mail Online will experiment with a paywall in 2024 is a clear signal that the era of free news backed by cookie-based advertising is well and truly over.
Why publisher cookies have gone stale
For years, browser cookies tracked users based on their interests and browsing history. Cookies are strings of encrypted code that identify a unique internet user. They allowed advertisers to make accurate guesses about where you live, your demographic characteristics, and — crucially — your shopping interests.
Layoffs in the news business have been caused by multiple factors, of course. Both Google and Facebook have dialled down news results in their feeds and algorithms, Twitter/X became a dysfunctional place to find reliable news, GDPR triggered many users to reject all cookies, and adblockers — which foiled cookies — became popular among readers, their use peaked in 2018. At the same time, advertisers turned away from news sites because they don’t like placing their brands next to controversial topics.
The result: traffic to news sites collapsed in 2023.
“When you have a drop of 20% of traffic at the top end, that just hits you hard,” says Damon Reeve, CEO of The Ozone Project, which represents Reach, The Guardian, The Telegraph and the Mail in the online ad market.
In lockstep, revenues moved away from news sites. Adspend for the whole of the UK was expected to grow in 2023 but the amount going to news brands was forecast to decline by 8%, according to Advertising Association/WARC.
“I look at it as Godzilla versus Mothra and we are the citizens of Tokyo. There’s no doubt these buildings are going to fall on us,” one US publisher told Press Gazette. “There’s almost no way publishers don’t get hurt in this process. There’s no ‘not getting hurt’.”
The addressability challenge and why registration walls may not work
Some publishers are in a place where so little of their ad inventory is addressable that they can’t sell all their slots, according to Jonathan Roberts, the chief innovation officer of Dotdash Meredith. The company owns People, Entertainment Weekly, and Brides, among others, and claims to be the largest publisher in the US with a monthly reach of nearly 200 million.
“If you try to run a buy [using cookies] on publishers, you have to scrape their targeting so thinly because the addressability is now so small. You have to target everything to get anything to scale at all. So … cookies don’t work and will not work. To say that cookies work for scale and buyers right now is untrue,” Roberts says. Dotdash Meredith has moved to an intent-based targeting system, called D/Cipher, in which advertisers are offered slots based on non-identified users’ browsing interests.
There’s a quality problem too. “Advertisers don’t want to advertise alongside hard news, they only like the soft lifestyle stuff,” says Ozone’s Reeve. “This has been a persistent problem for years.” Advertisers are “rejecting a lot of valuable audience and content, which pushes your ads into environments that are perceived to be ‘brand safe’, but end up being made-for-advertising sites or stuff that doesn’t have a lot of text on it, but might actually be really dodgy video content. You just don’t know. It’s just that the software doesn’t flag it up.”
“That again probably takes another, depending on the publisher, you know, 10 to 15, even up to 20% of their inventory out of the addressable pod,” he says.
Contrary to myth, cookies didn’t specifically identify anyone by name or address or other personally identifying information. In fact, cookies rendered users functionally anonymous. But the way that ads followed users around the internet gave many readers the creeps, and calls for increased online privacy began mounting in the mid-2010s.
The privacy advocates won the battle against cookies but will likely lose the larger war for anonymity: Increasingly, publishers now hide their news behind registration paywalls so that content can only be read by people willing to sign in with email addresses or social media logins — which strips users of their anonymity and delivers a ton of data to publishers.
Logins are a goldmine for publishers because they can be used for email lists, on-site targeting, and to create unique collections of readers backed by rich data. But they’re often a logistical headache for big, global advertisers who want “scale” — the ability to reach hundreds of millions of people and to be able to measure and compare the results.
With thousands of publishers offering myriad different logged-in audiences, advertisers “will then have to set up hundreds of other deals with other publishers, that look like them, in order to get some level of scale. And of course, all of those publishers will have a slightly different interpretation of what that audience actually is,” says John Tigg, evp global buyer development at Yieldmo, an ad exchange for publishers such as CNN, News UK, and USA Today.
Subscriptions have an obvious ceiling, even for publishers. Most people are only willing to subscribe to one news source, according to Reuters Institute Digital News Report. In only four countries (US, Australia, Spain and France) have a majority of readers been willing to subscribe to two or more publishers.
“Very, very few publishers are going to get 100% of users to login, or even 50% of the users to login,” Dotdash Meredith’s Roberts says.
Charging more for fewer readers
Perhaps unsurprisingly, publishers and advertisers are already building new mechanisms that allow advertisers to target readers en masse. LiveRamp’s RampID, The Trade Desk’s Unified ID 2.0, and Google’s PAIR ID all, in one way or another, allow publishers to submit user identities — hashed and anonymised — into online ad “bidstreams” where buyers can target readers in a way that, frankly, looks a lot like the programmatic advertising that cookies were based on.
Ozone – a joint venture between Reach, The Guardian, The Telegraph and News UK – takes their ad inventory off the open programmatic market and offers exclusive audience targeting directly to advertisers through a deal ID.
One thing they all have in common: They’re offering a smaller universe of readers than before. Chasing hundreds of millions of readers at once — the model championed by BuzzFeed and Huffington Post — is a thing of the past for these guys.
“How are you going to go from a world of having 10 million cookie IDs to a world where you maybe have 2 million or more authenticated users that you can monetise at a much higher value?” says LiveRamp’s VP, connectivity and ecosystem Luke Fenney. “I think that the day of just chasing scale for scale’s sake is kind of really over.”
There is one thing that publishers are enthusiastic about, however. In a world without cookies advertisers may become more dependent on information offered to them by publishers. Rather than being able to sell only the minority of users that advertisers can “see” with Chrome cookies, publishers can once again offer 100% of their users based on their own information. “When there’s no signal, publishers will have the best signal,” says Rob Beeler, founder of Beeler.Tech, an industry group for publishers.
“One of the sort of big benefits of losing Chrome cookies is that you actually have the opportunity to double your reach on the open web,” says Yieldmo’s Tigg. “You say, well, OK, now I can talk to everybody and I can do that across both of the major browsers Safari and Chrome.”
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