Hidden Ad Tech Challenges from the Depreciation of Third Party Cookies

by Lila Hunt, on Apr 12, 2021 9:00:00 AM

What does ad tech look like in a world without client-side third-party cookie matching?

In the most beautiful tech utopia, all our ad services move to server-to-server connections, page speeds and user experiences improve, and we all dance around the campfire holding hands and singing folk songs about a once messy and convoluted ecosystem.

The Rise of Header Bidding

Header bidding was a hack that took advantage of the ease and accessibility of javascript to help evolve programmatic advertising from a linear, turn-based auction to an openly competitive marketplace.

However, hacks are not robust. By nature, they are quick and dirty innovations that accelerate ideas to minimal viable products.

Header bidding tech didn’t dramatically evolve beyond its hacky origin, and as a result, it further inspired a wave of easy to integrate, client side ad services.

The industry continued taking advantage of javascript vulnerabilities by layering on more and more client-side code in the spirit of “transparency,” optimizing ad revenue, and simple integrations.

As the old adage goes, “if it sounds too good to be true, then it probably is.” Header bidding introduced a host of technical problems - hundreds of pixels firing, API hijacking and high latency, synchronous code.

Over time, publisher engineering teams exposed these issues and vendors refined header bidding solutions to better accommodate evolving web development standards.

We also saw new services like cleanAD enter the market to help protect publishers and their users from malicious javascript exploitations like browser hijacking.

Up to this point in header bidding history (circa 2017), yield decisions generally won over code security and performance. No one was showcasing their sexy code to leadership until more recently when search engines began ranking sites based at least in part on user engagement. Heavy ad loads beget latency, which impacts user engagement metrics and, ultimately, search traffic stability.

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Balancing Demand Density with Page Performance

We have entered an era where yield is not solely measured by the highest RPM in an A/B test, but instead by some combination of traffic performance, on site user retention, and value for inventory.

Though this triangle has always been at the heart of publishing ad operations, we are seeing an increasing tension between traffic health and inventory value that is fueled by years of the ultimate pitch we wanted and frankly needed - “it’s easy it’s, it’s asynchronous, it’s a header bidder!”

There is a path for demand density goals and page performance goals to harmoniously coexist, and it will be fueled by the death of the third party cookie.

Server side header bidding historically struggled to make traction on the web in part because of lost user matching signals from the client to the server. As third party cookies are deprecated, so too is client side user matching.

In theory, one client side agent can be responsible for collecting signals from the browser and webpage and sharing them downstream with any yield partner participating in the publisher’s auction—or, as we have it today, three services - Google Open Bidding, Amazon TAM and Prebid Server.

These services currently offer independent features which, when combined, add value. Over time, it’s possible their value propositions will become less differentiated and publishers will choose a single path.

Ultimately, we do not want header bidding to evolve into “wrapper bidding,” where many server side wrappers are competing on the client side, because that costs our buyside partners through QPS inflation and scale manipulation.

The Dangers of Tag Driven Solutions

Third party cookie deprecation is also motivating an interesting resurgence in tag management.

We are already seeing many identity solutions easily deployed from the tag manager with little understanding about what their javascript is doing, and has the potential to do, if changed at any given time. This rapidly evolving set of solutions poses tech security, data leakage and privacy risks that Ad Ops teams aren’t equipped to evaluate and monitor on their own because the code is complex, proprietary and difficult to interpret via browser tools.

As the industry transitions server side, publishers will need dedicated tech and compliance experts who can take some ownership off the Ad Ops team’s plate. This support may come in the form of vendors who can support Ad Ops or internal SME’s who learn this rapidly changing monetization landscape alongside and with the guidance of Ad Ops as the business stakeholders.

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Everything You've Ever Wanted to Know About Ad Ops (and Probably More)

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Looking to the Future

We aren’t really entering a new world of vulnerability, but we are compounding the issues we’ve addressed over time by decentralizing the buyer/publisher value exchange across several proprietary and highly obfuscated services.

The revenue side of our businesses values a variety of partnerships that de-risk any one service from dictating the market value of our inventory.

Conversely, many partnerships impose legal, finance and tech risks on other pieces of the business. There are yield driven trade offs which will be hard to prove out in a future where we are dependent on our service providers to offer transparent and robust reporting on a variety of signals across many third party stakeholders.

Ultimately, I welcome the challenge in the spirit of improving user experience, but accept it with extreme caution. We will need to embrace a collaborative, cross team approach to hold our tech providers accountable to the values we’ve established since our industry’s greatest hack, header bidding, empowered Ad Ops teams to take control of their monetization.

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Topics:AdOps Strategy

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