Digital Advertising in the Post-Cookie Era: Approaches We Must Take Now, Looking to the Future (Part 1)

The phase-out of third-party cookies in Google's Chrome browser, scheduled for the coming years, is now confirmed. While third-party cookies enable sharing user browsing history across websites, regulatory pressure and calls for their elimination are intensifying from a personal data protection perspective.

Given that Japanese internet users reportedly spend over half their time on the open internet, concerns exist that this phase-out could impact certain cookie-dependent digital advertising. Consequently, the search is on for advertising approaches that don't rely on cookies. In response, Ryota Watanabe of Dentsu Inc.'s Data & Technology Center interviews four Dentsu partner companies handling digital advertising about their countermeasures and solutions in a two-part series.

In Part 1, guests Yosuke Sugawara of OCEAN'S Inc. and Hirotsugu Doi of GumGum Japan Inc . (hereafter GumGum), joined by Ryo Aoki of Dentsu Digital Inc. who regularly tackles various marketing challenges, delve into the latest trends.

Google Chrome to Phase Out Third-Party Cookies After 2025

Watanabe: Regarding third-party cookies, Apple fully disabled them by default in its Safari browser by 2020, and Mozilla Foundation's Firefox has implemented similar restrictions. Google Chrome, which holds over 60% of Japan's browser market share, also plans a phased phase-out starting early 2025. While traditional targeting ads based on third-party cookies will become more difficult, how do you, Mr. Aoki, who is frequently involved in client companies' digital marketing, perceive the impact these changes will have on web ad delivery?

Aoki: Even before the challenges of third-party cookie phase-out emerged, Dentsu Digital Inc. has been proactively developing targeting solutions that leverage first-party data (*1) in collaboration with various platform providers, ahead of other companies. While alternatives to third-party cookies are gradually being established, facing such a major transformation head-on, we believe collaborative efforts with our partner companies—including OCEAN'S and GumGum, whom we'll discuss today—are essential to prepare for the inevitable changes ahead.

GumGum's PDCA Cycle Enabling User-Friendly Ad Delivery

Watanabe: Mr. Aoki mentioned the term "alternative solutions." I imagine companies are exploring various approaches. The solutions developed by OCEAN'S and GumGum seem like effective alternatives. Could you each explain how you plan to approach the trend toward phasing out third-party cookies?

Doi: The service GumGum provides falls under what is known as "contextual advertising" (contextual targeting), which delivers ads tailored to the content of the media without relying on third-party cookies. Contextual advertising itself isn't a particularly new service, but we possess particular strengths in the technology for analyzing content context. We comprehensively analyze not just text information, but also content like images, audio, and video using our proprietary AI. We deliver ads only after thoroughly understanding the true meaning of the article the user is viewing.

A crucial factor here is our ability to handle the unique characteristics of the Japanese language. While GumGum is originally an American technology company, a major feature is that we have a separate engine specifically designed to accurately understand Japanese, distinct from our English engine.

Recently, we've incorporated "attention measurement" (the actual time users spend looking at an ad) into this framework. By combining these technologies and continuously refining our approach through PDCA cycles, we deliver products focused on the user's mindset.

Aoki: GumGum and Dentsu Digital Inc. have been exploring approaches together since around 2017 to deliver ads with high affinity for users. The ability to measure "Attention" is a feature we find particularly noteworthy. The time spent viewing an ad is a crucial metric for user attitude change that cannot be measured solely by traditional "impressions" (the number of times an ad is displayed). We feel this is an essential solution that also contributes to corporate branding.

Native Ocean: Deepening User Behavior Analysis Through GA/AA Integration

Watanabe: On the other hand, what kind of services does OCEAN'S provide?

Sugawara: OCEAN'S provides "Native Ocean," a native advertising DSP (※2) connected to over 50 ad networks worldwide, including GumGum. Its strength lies in convenience: using a proprietary bidding method independent of third-party cookies, it enables simultaneous ad delivery across multiple media. The "Recommendation Widget," a native ad placement delivered to sections like a website's "recommended articles," is a representative native ad format. It reaches user segments inaccessible to conventional display ads like banner ads.

Another major strength is its API integration with Google Analytics (GA) and Adobe Analytics (AA). This API integration enables analysis of metrics like dwell time and bounce rate for users who arrive at a company's site via ads delivered through Native Ocean. It allows analysis of which websites are sending users with longer dwell times—users highly interested in the company's brand or products. Previously, DSPs primarily aimed to lower click costs or customer acquisition costs using algorithms. This solution enables deeper analysis of user behavior and optimization against KPIs.

Aoki: The integration with GA/AA is appealing, isn't it? Traditional web advertising often ended up focusing solely on how effective the ad itself was. Now, we can discern user movements across the entire website beyond the ad itself and leverage that for ad operations. This can also be considered a fundamental approach to advertising.

Leveraging each company's strengths to provide solutions that address clients' core challenges

Watanabe: Could we envision a scenario where OCEAN'S and GumGum collaborate technologically in the future?

Sugawara: For example, in GumGum's strength area of contextual advertising, leveraging "Native Ocean's" GA/AA integration could reveal the specific content context that drew users with longer site dwell times. Dentsu Digital Inc. could then analyze this to enable GumGum to deliver even more precise advertising. Since both companies have distinct characteristics, we'd be delighted to team up with Dentsu Digital Inc. to propose solutions to client companies that only we can deliver.

Aoki: That's right. The elimination of third-party cookies will be a major turning point for the industry, but it might also be an opportunity to create solutions that fundamentally address our clients' challenges.

Doi: As digital advertising has evolved, companies have sometimes focused too much on data while neglecting users. The end of third-party cookies has given us an opportunity to reconsider what truly constitutes a good advertising experience for users. I hope we can leverage GumGum's strengths to build a better digital advertising industry together with everyone.

With the imminent phase-out of third-party cookies in Google Chrome, the Dentsu Group will collaborate with partner companies to provide essential solutions for the future of digital marketing.

※1 User data collected independently by companies on their own websites or apps
※2 Abbreviation for Demand Side Platform. A tool for advertisers to maximize ad effectiveness
※3 Abbreviation for Application Programming Interface. A mechanism that enables data sharing between different systems and applications, expanding functionality