Google said it would stop targeting ads based on user history, or in technical terms, the end of third party cookies. Google’s Chrome web browser is its main source of cookies and will no longer support third party cookies, similar to Safari which ended support for these third party cookies in 2017. (Opera and Brave are alternative browsers that have adopted this stance long ago). Note, first party cookies are placed on your browser by the actual domain that you are on; this allows you to stay logged into websites and ensure products in your cart don’t disappear.
What does “no cookies” mean for influencers?
It doesn’t mean much for influencers in the long term. Display advertising was never a huge part of an influencers overall revenue projection. However, if you are getting a substantial amount of income from Google or other display networks you may see a short term drop in revenue. The Trade Desk and Criteo, which sell primarily retargeted display advertising, responded negatively to the news with their stock prices dropping double digits. Unfortunately retargeted display was truly the only form of display advertising that was effective. As display advertising rates start to worsen, other forms of advertising will receive more funding; i.e. Good news for influencers.
Inability to Track
With this inability to track a user’s browser history, Internet users will no longer have data to continue to show you that pair of shoes over and over again, even after you’ve purchased it. Advertisers will have some data but most likely a safe bet will be to target psychographically. That is, brands will be forced to target based on the content of the site, or rather, the way that advertising was sold prior to the Internet Age. With advertising based on psychographics, this swings the pendulum toward influencers that write about “long tail”, esoteric topics. While the USA Today’s and CNNs will still get the lion’s share of views, their rates will drop close to those that we saw during the MySpace days. Rates for influencers will increase as long as the topics stay focused.
Why will rates increase the more narrow I stay?
We can call it the CNBC effect. CNBC is one of the least watched cable networks out there, between 150k-200k daily viewers. Meanwhile, prime time CBS averaged 4.5 million viewers. In that comparison, CNBC looks like it should be cancelled, however, it’s one of the most profitable cable channels out there. CNBC is a very narrow cable channel that talks typically about one thing, the economy, and specifically, the stock market. These 200k viewers are valuable to advertisers, because the people that watch this channel are people that care about the stock market and those people include: bankers, financial advisers, money managers, and high net worth individuals. Thus, advertising on the channel includes new ETFs, Bitcoin products, private jets, and other products targeted toward wealthy financially focused people. Who watches the Golden Globes or the Super Bowl or the nightly news? Everyone, with every interest under the sun.
New Forms of Cookie-less Advertising
With short term declines in broad display advertising, we will see more forms of sponsorship from advertisers. We’ve already seen some exciting moves in the sponsored content space, but as we consume new forms of content from audio to livestream to AR to VR to NFTs we will see innovative new forms of sponsorship.
The road ahead
The more specific you keep your content, whether in cooking, travel, fitness, etc, the more advertisers will be seeking you out for sponsorship or advertising because they know exactly who your audience is. In the short term you might see your earnings lowered because the advertising market isn’t sure what the new forms of advertising are worth, but we believe in the long run that advertisers will see the value in psychographic targeting that influencers provide.