The TradeDesk’s plan to address life without cookies and its effect on marketing

The internet is open and paid for by ad revenue

As the largest independent programmatic DSP (demand-side platform), The TradeDesk’s (TTD) approach hinges on the concept that the internet is an open place that is paid for through ad revenue. It assumes that the value exchange of your time — or, in other words, seeing relevant ads on a website — for the content placed by publishers is a fair exchange for both parties. This premise is guiding their approach behind their Unified ID 2.0, which is their proposed solution for when website cookies are no longer available.

In contrast, Google is taking a different approach with FLoC, which TTD views as a strategic error. While Google’s approach may provide more scale through the Chrome browser, it is not an open-sourced solution, and some have pointed criticism in its approach because it appears self-serving. While Google has asked for others within the industry to participate in its sandbox developing its solution, major players (like Apple) have been left out. As a result, it is likely that competing revenue models will pit the large tech companies that own the rails against the open-sourced Internet which relies on ad revenue to fuel its content.

Without ad revenues maintained at their present rates, there are concerns that publishers’ existing business models will not survive. Without third-party cookies, the ability to accurately target will be reduced, leading to lower quality or less relevant ads served. This, in turn, will ultimately reduce the cost per impression marketers may be willing to pay.

As the battle for an industry solution wages on, The TradeDesk’s solution hopes to maintain these existing ad revenues, such that it remains advantageous for publishers to continue providing relevant content on an open internet. The alternative may change the internet, and online marketing as a whole, into a series of fragmented content gardens funded by a combination of pay walls and ad revenue.

Let’s take a look at how the Unified ID 2.0 will work in practice.

The TradeDesk’s solution

The TradeDesk’s solution will be reliant on partnerships and adoption by a large number of publishers. While the Unified ID 2.0 is being built by The TradeDesk, it is intended to be turned over and managed by ‘the industry’ instead of a single entity, ensuring it remains open source. TTD is well on their way to making this an industry standard through its recent announcements for partnerships with Neustar, LiveRamp, Criteo, and Nielsen. Partnerships with these large players is crucial: it ensures TTD can provide scale, and beyond that, quality data.

The TradeDesk’s solution is most analogous to another concept many of us are familiar with: single sign on. Essentially, TTD’s plan is to establish a single-sign-on experience across the internet, enabling users to “log on” with a single click once they have signed up. As part of the sign-up experience, TTD is hoping to explain the value proposition and set a ‘Gold Standard’ for consent. The IAB is prescribing the use of email during the sign-up phase. An ID can then be associated to that email address. However, it’s important to note that the ID by itself will be useless, ensuring a layer of privacy.

On the publisher side, the Washington Post said it would adopt the Unified ID 2.0 framework in late December 2020. This is the first publisher to sign up, but others will likely start to follow, especially those like the Washington Post who have a revenue performance platform tied to their business.

What does this mean for marketers?

Marketers are sure to see a decrease in both ad effectiveness and in cost per impression as a result and cookies being removed, even with the Unified ID 2.0 replacement. This will likely be the case for both the Unified ID 2.0 and Google’s FLoC solutions. Initially, ad targeting will not be as personalized as consumers have become to expect. But once the Unified ID 2.0 has had time to mature and has grown in acceptance, we may find a higher value can be placed on those consumers who do trade their time for content.

Before cookies are officially removed, all marketers should take the time to catalog media that is currently reliant on cookies and develop cost benchmarks that appropriately attribute return on all channels while the data is still available at scale. At the same time, it will be crucial to continue growing your first-party data, clearly articulating the value proposition for consumers who interact with you on digital properties. All brands will become highly reliant on this data set when cookies do go away. If you don’t act now, you’ll quickly fall behind.

The view from 10,000 feet? The TradeDesk and other industry players truly view Unified ID 2.0 as an opportunity to take a step back and create a better long-term solution than cookies may have offered. It is also an opportunity to thoughtfully address privacy and consumer experience concerns. While this may be disruptive in the short term, it will eventually bring new opportunities for marketers and consumers that cookies would never have been able to offer.