Is a cookie-less future a concern in mobile-heavy Asia?

Advertisers have been braced for the eradication of the third-party tracking cookie for some time now—it was a common theme in our 2020 adtech predictions—but that didn't make Google's announcement any less stupefying.

The warning signs were there. As regulation grew and a light was shone on the at times nefarious practices of digital advertising, big tech came under mounting pressure to clean up, and cookies became the most obvious victim of the year of privacy. Not the helpful first-party type, which allow website owners to collect analytics data and remember a user's settings on a site, but those dreaded third-party cookies that allow that pair of shoes you looked at weeks ago to keep following you around the internet.

Apple and Mozilla were the first to crack down on these tracking cookies. Apple unveiled an anti-tracking tool called Intelligent Tracking Prevention in 2017 for its Safari browser and has rolled out several updates since that target advertisers' workaround solutions to its third-party cookies ban. In June, Mozilla released a new version of Firefox that used its Enhanced Tracking Protection to block third-party cookies by default. But with a collective global browser share (including desktop, mobile and tablet) of 22%, according to StatCounter's December 2019 report, advertisers weren't that jolted.

Google has taken a more considered approach. It has been reducing the potency of the third-party cookie since May last year, when it announced a new set of controls in Chrome that allows users to block or clear cookies that use trackers. Then last week, it gave advertisers a two-year deadline for when it would end support for third-party tracking cookies in Chrome completely. The "phased" approach is meant to give advertisers an adjustment period and allow them to put forward suggestions for new web standards.

The move is significant given Chrome is by far the world's biggest browser, with a 64% global share. But in Asia, where smartphone penetration is rapidly on the rise and where the bulk of digital advertising growth is predicted to come from ad impressions and clicks in-app, is the imminent death of cookies significant? 

Campaign asked a handful of experts for their thoughts on the following questions.

1. Since mobile is the dominant device and advertising vehicle in Asia-Pacific, is the deterioration of the third-party cookie as much of a concern in this region, versus the West?

Miranda Dimopoulos, regional CEO, IAB Southeast Asia and India

With Asia being mobile first and home to superapps such as Grab, this region has a distinct advantage in the evolution of personalisation and targeting. As data in APAC is at vastly different states of maturity market-by-market, from collection, to analysis, to storage, to policy in regards to usage, the phasing out of third party cookies can motivate regional businesses to address and implement more progressive approaches than what have been adopted as legacy from global.

As the IAB SEA+India, we have recently joined the IAB Tech Lab and will be playing an active role this year in informing, developing and testing products, software and initiatives to represent and support the local industry in addressing, and staying ahead of, key issues such as this. It is critical that citizens are protected just as it is critical to encourage and maintain an equal playing field, a responsible supply chain and to enable a diverse range of digital players to innovate and contribute. This will ultimately benefit consumers, businesses and economies alike.

Jonathan Beh, CEO, China, Cadreon

For China, yes and no, dependent on the type of client’s business needs: more so for our client businesses that leverage the open tech stack, but less so for our clients that leverage the BAT (JB) [Baidu, Alibaba, Tencent, JD and Bytedance] stacks. Generally speaking, the impact for China will be minimal, as it is still a mobile-driven market—  almost 80% of paid digital media spent nowadays is via mobile. Although we haven’t yet heard about other local browsers (QQ, 360) adopting the same approach as Google Chrome, we assume they will follow suit very soon.

Kenny Griffiths, managing director APAC, MightyHive

Yes and no. No: as compared to desktop browsers, in mobile web cookies have always demonstrated limited efficiency, since in many mobile browsers cookies are often cleared from the cache by default once the app or device is restarted (if they are accepted at all). In mobile app environments, cookies are not used at all. Yes: it must be recognised that the vast majority of mobile devices in APAC are android-based, with Chrome the dominant (read: default) web browser in those devices. Advertisers targeting users who use Chrome as their mobile web browser will of course be impacted by this change over the coming two years. This move is not to deter advertisers but to strengthen privacy laws.

Niraj Nagpal, director of business development APAC, Iponweb

APAC is a mobile-first region with over 60% internet market share for mobile, much of that traffic being in-app. For the app users, there would be little change in the advertising practices that brands would use to reach them, however they should take note of the impact that these changes have on browser-based traffic as mobile advertiser IDs could find themselves in a similar place in the near future.

Looking forward, large, sign-in apps may have an increased advantage over browser-based traffic as they would have access to unique identifiers and would be able to apply this data to targeting and personalisation. Nonetheless, desktop still represents almost 40% of internet usage and should not be discounted; for scale and reach, media buyers will also need to depend on channels other than mobile to reach their target market.

Jason Barnes, chief revenue officer APAC, Pubmatic

While this change will have a big impact on the industry, it may not be as significant in Asia as other markets. Registration-based logins for app traffic is stronger than a cookie, and cookies never worked on mobile browsers either. It is also worth remembering that much of high-growth formats like OTT video and CTV also do not rely on cookies. Of course there still needs to be some connection between user behaviours and device IDs for targeting, so there will need to be an alternative identity solution in place to stitch the consumer picture together in order for these formats to work seamlessly.

2. Likewise, while Chrome is still a dominant browser in APAC, it doesn’t have the same monopoly in APAC (with players like Naver, Yahoo and Baidu), so is this move as much of a concern?

Griffiths:

It must be noted that search as a channel isn’t heavily affected by the deprecation of 3P cookies, whether in Chrome or in any other browser. This is because search methodology is built upon click tracking - instead of results being collated via 3P cookies stored in a browser cache (as with example programmatic display advertising), when a user clicks on a paid search result the URL redirects are altered to include tracking parameters. This URL tracking capability is broadly unaffected by any changes to 3P cookies. As above, Chrome browser for mobile web remains the dominant browser in mobile devices. Marketers, publishers, technology companies in the industry will need to work together to form a common identity for the long-term.

Nagpal:

While Google Search might not hold as dominant position in the APAC market as it does in North America and the EU, the Chrome browser has almost 70% market share in the region. Consequently, Google’s decision to depreciate third-party cookies will have a global impact for browser-based traffic, however this might be softened somewhat in APAC by the fact that there is a large amount of mobile and in-app traffic.

3. Is it realistic that the industry in this region will be ready for the end of the third-party cookie in two years time?

Beh:

Two years is a long time, and I suspect there will be new solutions (i.e. OAID mentioned above) being introduced. I am also speculating that image/movement/faceID or even voice ID recognition will play a part in replacing cookie/deviceID in the future.

Griffiths:

Chrome has already confirmed they will continue to support and improve the privacy and security of third-party cookies until key use-cases for advertisers and publishers are supported with the new technologies. The appropriate solutions will be in place to support measurement and targeting before third party cookies are sunset and the mechanisms will be vastly different to what they look like today. This may however prove challenging for independent and custom attribution solutions, and instead place heavier reliance on attribution within Google’s walls using the likes of Ads Data Hub. Cookie isn’t the end all solution to everything.

Nagpal:

Ideally we would have more time to develop alternative solutions or at least further develop those that are in place today. However, we don’t have that luxury. Whether the solution originates from an industry body or disrupter, from development of a global first-party cookie ID, or investment in non-user-tracking trading mechanisms e.g. user context or machine learning, digital trading will continue and the marketplace will naturally adapt preferred alternatives with quality identity over time. And if any region is “ready” for a shift away from third party cookies, APAC is the closest as it is already mobile first.

Barnes:

This announcement has been a long time coming, especially given the changes already implemented by Safari and Firefox. Many an ad tech organisation has been preparing for this eventuality for a while now, and any that hasn’t been looking at the opportunity this change brings may now be having a few sleepless nights. That said I think the industry will pull together and start really collaborating. There are various forums that are already facilitating this collaboration, including Prebid and the IAB Tech Lab.