Digital Advertising in the Post-Cookie Era: Approaches We Must Take Now, Looking to the Future (Part 2)

Google Chrome, boasting the largest browser share both domestically in Japan and globally, plans a phased phase-out of third-party cookies starting early 2025. What technologies and solutions can we expect in the imminent "cookie-free" era? Ryota Watanabe of Dentsu Digital Inc.'s Data & Technology Center interviews key partners in digital advertising.

Following Part 1, featuring Ryo Aoki from Dentsu Digital Inc., Part 2 welcomes guests Makoto Matsuda from Rokt LLC and Takeshi Yamaguchi from Ogury Japan Inc. (hereafter Ogury) to discuss the approaches we should take now.

The rapidly expanding retail media landscape. Rokt enables ad delivery immediately after purchases on e-commerce sites.

Watanabe: With the phase-out of third-party cookies, which enable sharing user browsing history across websites, the fundamental trends in the "post-cookie" era are expected to broadly fall into three categories:

① Platform operators exploring new economic ecosystems
② Platform operators seeking alternative technologies to replace cookies
③ Publisher-led "zero-party" orientation

Among these, wouldn't Rokt fall under the first category, "Platform operators exploring new economic ecosystems"?

Matsuda: That's correct. Rokt focuses on the "moment of purchase" within e-commerce sites. By creating dedicated offer slots at this critical point, we provide a solution enabling advertisers to acquire new customers. You could say it's one form of retail media. The retail media market is expanding rapidly, projected to grow 122% year-over-year in 2023 and reach approximately 2.6 times its 2023 size by 2027 (*).

With third-party cookies becoming unusable, the challenge arises of how to capture the messages users actually want. This is where e-commerce sites, operated by various industries centered around retail, are now gaining attention. The moment a customer completes a purchase on an e-commerce site is also the moment the company can capture various customer data—such as the purchased items, user demographics, and payment information.

The moment someone "buys a product" represents the peak of their excitement about shopping and is also a moment that strongly reflects their characteristics. For example, someone who "is interested in soccer" and someone who "pays money for soccer" may seem similar but are fundamentally different.Because you can reach people who have already taken the action of "paying money," ad performance is high. In fact, the average click-through rate for Japanese advertisers is a high 5%. Furthermore, many campaigns achieve click-through rates of 10% or higher. One key feature is the ability to deliver the most relevant ads to users without relying on third-party cookies.

Optimal ads based on proprietary statistical data. Ogury's "Persona Targeting"

Watanabe: On the other hand, Ogury seems to fall under the second category, "Exploring Cookie Alternatives." Could you tell us about your service's features?

Yamaguchi: Ogury promotes an approach called "Persona Targeting," which views people not by ID but by their overall profile. We collect zero-party data such as consumer preferences, demographic attributes like gender, age, and location, and consumption behavior. Based on this, we create consumer personas and link them to ad delivery.

Take consumers considering buying a car, for example. Whether they're looking at hybrids, SUVs, luxury cars, or used vehicles, their gender/age distribution, hobbies, preferences, and interests vary significantly. These differing areas of interest also change what content they view beyond "automotive"-related material. Ogury cross-references this with its vast proprietary data to deliver ads to each persona on the most suitable platform.In other words, "Persona Targeting" enables highly relevant ad delivery without using cookies or IDs. It achieves this by cross-referencing media platform information with anthropomorphized personas.

Solving challenges across the full funnel by combining each company's solutions

Watanabe: Mr. Aoki, you work with global companies both domestically and internationally at Dentsu Digital Global Center (DDGC). What do you see as the key characteristics and strengths of Rokt and Ogury?

Aoki: Both companies have relied on third-party cookies even before their phase-out became an issue. In fact, I feel the recent trends have been a tailwind for them. Even if Google completely eliminates third-party cookies in the future, it won't affect either company. On the contrary, demand for their services is likely to increase further.

When considering the full funnel (the entire purchasing process from customer awareness of a product or service to purchase, repeat purchase, and continued use), I believe Rokt excels particularly in the "bottom funnel" (purchase and pre-purchase), while Ogury demonstrates its strengths in the "upper to middle funnel" (contributing to awareness and interest generation).Dentsu Digital Inc. aims to maximize and combine these respective strengths within their respective funnels to truly solve the challenges faced by our client companies.

Watanabe: Ogury has achieved tremendous growth since establishing its Japanese subsidiary in 2022. I understand you also offer a solution called the "Ogury Brand Index" alongside DDGC.

Yamaguchi: Yes. Fundamentally, Ogury positions itself not as an "advertising delivery company" but as a "data technology company." The company's origins weren't centered on ad delivery from the start. Rather, it began by collecting vast amounts of data and scientifically analyzing how users behave online. This enabled it to predict where the consumers brands seek are located, which is why it started advertising delivery.

The "Ogury Brand Index" is a survey solution leveraging this strength in data collection. Its key feature is visualizing how consumers perceive your brand compared to competitors, in addition to traditional metrics like brand lift (consumer awareness, evaluation, and purchase intent).

Aoki: Brand lift surveys themselves have existed for a long time, typically measuring the results of specific campaigns. However, the Ogury Brand Index differs significantly by visualizing comparisons with competitors, revealing strengths and weaknesses that companies may not have been aware of. This allows for refining advertising messages or rethinking website content creation. I feel it's a solution that provides a wealth of insights.

Delivering truly relevant ads makes users, advertisers, and publishers happy

Watanabe: Regarding data utilization, Rokt's approach of leveraging publishers' first-party data to enhance targeting precision is truly unique. Dentsu Inc. has partnered with Rokt since the start of its Japan operations in 2019. While not using cookies is now a strength, it was striking that the journey started with the fundamental question: "How can we ensure the healthy growth of both users and publishers?"

Matsuda: A term Rokt values is "Relevance," meaning "meaningful to me" or "matching my preferences and tastes." Last year, our survey found that about 80% of respondents in Japan answered "Yes" to the question: "Would you allow e-commerce sites to use first-party data to create a shopping experience tailored to your preferences?"This shows that, provided privacy is adequately respected, users actually want e-commerce sites to use their data to provide tailored information. We aim for a "win-win-win" solution that benefits end customers, advertisers, and e-commerce businesses alike.

Yamaguchi: It's true that users have an aversion to ads, but I think that's specifically towards ads that don't suit them. It doesn't feel good to be told, "Your attributes are like this, so you must want to see this," right? If there's a sound premise of delivering highly relevant messages tailored to each individual, then users, brands, and publishers all become happy. Enabling that remains our ongoing mission.

With the phase-out of third-party cookies, solutions that return to the essence of what advertising is are gaining attention. To provide a better customer experience for users, the Dentsu Group will strengthen partnerships with our partner companies.

※ Reference: CARTA HOLDINGS, INC "Retail Media Advertising Market Survey"