Cookieless Advertising: What Replaces Third-Party Tracking

Industry and Competitive Context

For more than two decades, third-party cookies formed the invisible backbone of digital advertising. These small data files, placed by ad technology companies rather than the website a user was actually visiting, enabled advertisers to track browsing behaviour across the internet, build detailed audience profiles, and retarget users with personalized messages long after they left a brand's owned properties. The entire programmatic advertising ecosystem — spanning demand-side platforms, supply-side platforms, data management platforms, and ad exchanges — was architected around the assumption that this cross-site tracking infrastructure would remain intact indefinitely.

That assumption began to fracture in 2017, when Apple introduced Intelligent Tracking Prevention with Safari 11, restricting how long third-party cookies could persist on its browser. Mozilla Firefox followed with similar restrictions. These moves forced the industry's hand, but because Chrome — owned by Google — held approximately 67 percent of global browser market share as of mid-2025 according to StatCounter, the deprecation question that truly mattered to the industry was Google's.

The broader regulatory environment was simultaneously tightening. The European Union's General Data Protection Regulation, which took effect in 2018, and the California Consumer Privacy Act, passed the same year, imposed meaningful consent and transparency requirements on how companies collected and used personal data. Together, browser-level restrictions and regulatory pressure created a structural shift in the industry's operating conditions, irrespective of what Google eventually decided to do with Chrome.

The Situation Prior to Strategic Pivots

Google first announced its intention to phase third-party cookies out of Chrome in January 2020, with an original target of completion within two years. What followed was an extended series of delays, reversals, and regulatory complications that reshaped the industry's planning horizon more than once. The deadline moved from 2022, to 2024, to early 2025. In January 2024, Google did begin restricting third-party cookies for approximately one percent of Chrome users globally — roughly 30 million people — as part of a testing mechanism to evaluate the readiness of its Privacy Sandbox alternatives.

Then, on July 22, 2024, Google made the most consequential announcement of the entire saga: it would not deprecate third-party cookies in Chrome at all. In Google's own words, as quoted publicly, the company would instead "introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing," allowing users to adjust their preferences at any time. This was reaffirmed in April 2025, when Google confirmed it would not roll out a new cookie opt-in prompt and would keep third-party cookies enabled by default, while preserving user control through manual settings.

The Privacy Sandbox initiative — Google's collection of proposed API alternatives — had not achieved the adoption necessary to replace cookie functionality. The UK's Competition and Markets Authority, which had been engaged with Google on the matter throughout, expressed concern that cookie deprecation could unfairly advantage Google given its simultaneous ownership of Chrome, Google Ads, and large first-party data assets. According to the CMA's June 2025 report, per-impression publisher revenue was approximately 30 percent lower under Privacy Sandbox tools compared to normal cookie-based advertising, and Google's own internal tests showed similar declines of around 27 percent on Google Ad Manager. These findings validated industry hesitation and contributed to the eventual reversal.

Despite Google's U-turn, the structural pressure on cookie-based advertising did not disappear. Independent research documented that 67 percent of US adults had turned off cookies or website tracking to protect their privacy, according to eMarketer. Safari and Firefox — together representing a meaningful share of browsing environments — already operated with substantially restricted third-party tracking. A March 2025 Deloitte survey found that only approximately 15 percent of global marketers felt fully ready for a cookieless environment. Conversely, IAB's 2024 State of Data report found that nearly 90 percent of marketers reported shifting their personalization tactics, budget allocation, and data mix in anticipation of privacy changes, favouring first-party and zero-party data collection.

Strategic Objective

The central strategic challenge the industry confronted — and continues to confront — is not the narrow technical question of whether Chrome eliminates a particular file format. It is the deeper architectural question of how advertising can remain addressable, measurable, and privacy-compliant in an environment where passive cross-site tracking is increasingly unavailable, whether because of browser restrictions, regulatory requirements, or user opt-out behaviour. The objective for marketers and ad technology companies became one of building durable identity and measurement infrastructure that does not depend on a single browser vendor's policy decisions.

Campaign Architecture and Execution: The Emerging Alternative Ecosystem

The industry's response to the post-cookie environment has crystallized around four principal strategic pillars: first-party data infrastructure, privacy-compliant universal identity frameworks, data clean rooms, and retail media networks. Each represents a different architectural approach to the same underlying problem.

The first-party data strategy centres on direct relationships between brands and their customers. Unlike third-party cookies, which required no user interaction to deploy, first-party data — collected through email sign-ups, loyalty programmes, purchase histories, and account registrations — is gathered with explicit user awareness. Adobe's 2024 marketer survey found that only 49 percent of marketers considered cookies "essential" to their strategy, down from 75 percent in 2022, while over half of US marketers reported increasing investment in first-party data collection during 2024.

The universal identity framework approach is best represented by Unified ID 2.0, or UID2, an open-source initiative developed and backed by The Trade Desk. UID2 replaces cookie-based identification with hashed and encrypted email addresses, creating a persistent identifier that works across web, connected television, and mobile environments without storing personally identifiable information in a central database. The Trade Desk's 2024 annual proxy filing confirmed that the company made a strategic decision in 2020 to develop UID2 as a free, open-source solution rather than a proprietary monetized product, with the explicit objective of preserving relevant advertising across digital channels without reliance on third-party cookies. The Trade Desk reported gross spend of twelve billion dollars in 2024 with customer retention above 95 percent for eleven consecutive years, according to its February 2025 SEC filing. UID2 integration partners documented in The Trade Desk's public filings include NBCUniversal's Peacock, Warner Bros. Discovery across its Max and Discovery+ platforms, iHeartMedia, DISH Media, Philo, Bell Media in Canada, Walmart Connect, and IPG's Axiom, among others.

Data clean rooms represent the third architectural pillar. These are secure, privacy-preserving computing environments in which two or more parties can match and analyse data without either party gaining direct access to the other's raw records. The IAB defines clean rooms as "a safe environment for second-party data collaboration." In practice, they allow, for example, a consumer packaged goods brand to match its customer records against a retailer's purchase data within an agreed technical framework, enabling measurement and audience building that neither party could achieve alone. AWS Clean Rooms, launched in late 2022 and significantly enhanced through 2025, now serves thousands of enterprise customers globally. Google's Ads Data Hub enables measurement queries through BigQuery without moving raw data outside a compliant environment. According to Skai's 2025 retail media report, 41 percent of respondents identified integrating clean rooms into existing optimisation and analysis practices as their top operational hurdle, reflecting a transition from conceptual adoption to practical implementation. LiveRamp's 2024 acquisition of Habu and WPP/GroupM's reported April 2025 acquisition of InfoSum signalled consolidation in the independent clean room vendor space. The IAB Tech Lab finalized ADMaP 1.0 in February 2025 for attribution data matching and PAIR 1.1 in July 2025 for audience activation, establishing common protocols for privacy-safe data sharing.

The Rise of Retail Media Networks

Perhaps the most commercially consequential structural shift in the post-cookie advertising landscape has been the rapid growth of retail media networks. These are advertising platforms built by retailers on top of their proprietary first-party shopper data — purchase histories, loyalty programme records, and browsing behaviour within owned digital properties — which they then offer to brands as a targeting substrate. Because this data is collected directly by the retailer with user consent, and because campaign measurement can be closed-loop against actual purchase outcomes, retail media networks offer a form of advertising addressability and attribution that does not require third-party cookies at any stage.

Amazon's advertising business generated approximately 56 billion dollars in global revenue in 2024 and an estimated 62 billion dollars in 2025, according to industry estimates cited in eMarketer and WARC. Walmart's advertising business, Walmart Connect, generated 4.4 billion dollars in fiscal year 2024, representing 27 percent year-over-year growth, as publicly disclosed by the company. Target's retail media network, Roundel, generated 649 million dollars in reported advertising revenue in 2024, with Target publicly stating the business was on pace to deliver nearly two billion dollars in value inclusive of ad revenue and cost-of-goods offset. Kroger's alternative profit businesses, which include its media operation, generated 1.35 billion dollars in profit in 2024 with its media segment growing 17 percent year-over-year. eMarketer estimated global retail media spending reached approximately 140 billion dollars in 2024, projected to rise to approximately 166 billion dollars in 2025. According to eMarketer's H2 2025 forecast, US retail media spend is projected to reach 69.33 billion dollars in 2026, up from 58.79 billion dollars in 2025. The number of retail media networks globally exceeded 200 as of 2025 by multiple industry estimates, compared with a small handful dominated by Amazon only a few years prior.

Walmart's public filings also documented its integration of UID2 within the Walmart DSP for decisioning across the open internet, illustrating how the pillars of the alternative ecosystem are being combined rather than deployed in isolation.

Positioning and Consumer Insight

The underlying consumer insight driving the structural shift is straightforward: users have become aware of, and increasingly resistant to, invisible cross-site surveillance. Google's own framing of its July 2024 decision invoked "informed choice" and user control as the new design principle for Chrome's approach to privacy. This represents a fundamental reframing of the relationship between advertising and consent — from a default-on passive tracking model to one in which relevance must be earned through explicit or at minimum transparent data collection.

The strategic implication for brands is that audience building through owned relationships — loyalty programmes, CRM databases, preference centres — becomes a competitively durable asset in a way it was not when third-party cookie tracking provided a low-cost substitute for those relationships. Brands with large, high-quality first-party data estates are structurally advantaged relative to those that relied primarily on third-party audience segments assembled by data brokers from cookie-based behavioural signals.

Media and Channel Strategy

The observable shift in channel strategy has been toward environments that do not require third-party cookie infrastructure to deliver targeted advertising. Connected television has benefited significantly from this dynamic, as CTV inventory is transacted against first-party data from streaming service subscriptions and authenticated log-ins. The Trade Desk's 2024 and 2025 SEC filings consistently cited CTV as a key growth market and specifically noted UID2's cross-channel applicability to CTV as a strategic differentiator.

Contextual targeting — placing advertising adjacent to content relevant to the product rather than tracking the individual user — has also experienced renewed investment, as it requires no individual-level identity data and is compliant across all browser environments. Publishers who had invested in contextual enrichment and editorial taxonomy development reported advantages relative to those whose monetisation strategy depended heavily on third-party audience data.

Business and Brand Outcomes

Verified public disclosures of specific campaign outcomes attributable to cookieless strategies are limited. However, several documented market-level indicators are available. The Trade Desk reported gross spend of 12 billion dollars in 2024, with customer retention above 95 percent for eleven consecutive years, as disclosed in its February 2025 SEC filing. Global digital advertising spending reached approximately 309.3 billion dollars in the US in 2024, a 15.1 percent increase over 2023, according to industry estimates cited by Magna, suggesting that the overall market continued to expand despite cookie uncertainty. The CMA's June 2025 report documenting 30 percent publisher revenue declines under Privacy Sandbox tools versus normal cookies provided the clearest verified quantification of the performance gap between cookie-based and alternative approaches under current conditions. In controlled pilots conducted by major CPG brands during 2024 and 2025, clean room-based measurement demonstrated accuracy within 4 to 8 percent of ground-truth conversion data, compared to 25 to 35 percent underreporting typically observed in pixel-only last-click attribution models, according to industry research cited by Marketintelo's 2025 market analysis. No verified public information is available on individual brand-level campaign performance metrics attributable specifically to cookieless strategies, as such data has not been disclosed publicly through official channels.

Strategic Implications

The most significant strategic implication of the cookieless transition is not the technical one — which browser blocks which file — but the competitive one: first-party data has become a balance-sheet-level strategic asset, and the organisations that treated the cookie deprecation saga as a crisis to be waited out rather than a signal to be acted upon face compounding disadvantage. Retailers with large authenticated consumer databases, publishers with registered logged-in audiences, and platforms with credentialled user relationships are structurally better positioned than brands or intermediaries whose audience access depended on third-party data purchased from brokers.

The second implication concerns market structure. The rise of retail media networks concentrates advertising spend in environments controlled by a small number of large retailers. Amazon and Walmart alone are projected by eMarketer to capture over 89 percent of incremental retail media spend in 2026. This walled-garden dynamic reproduces many of the measurement and interoperability limitations that characterised the pre-cookieless era, simply with retailers as the data custodians rather than browser vendors.

The third implication is that measurement fragmentation is the durable operational challenge. With different users operating across different browsers, consent states, and platform environments, no single attribution methodology will serve as a universal standard. The industry is moving toward a portfolio approach to measurement — combining clean room collaboration, modelled attribution, incrementality testing, and first-party signals — which requires substantially greater analytical capability than the cookie-based last-click models that dominated for two decades.

Finally, the Google reversal itself carries a strategic lesson about regulatory risk as a competitive variable. Google's inability to complete cookie deprecation was not primarily a technical failure but a regulatory one: the CMA's concerns about competitive self-preferencing stopped the process. For any advertiser or publisher whose roadmap was calibrated to Chrome's cookie deprecation timeline, the episode demonstrated the risk of anchoring strategic planning to a single platform's policy decisions rather than to the structural direction of the market.

MBA Discussion Questions

1. Google's July 2024 reversal on third-party cookie deprecation was driven substantially by regulatory concerns from the UK's Competition and Markets Authority rather than by technical or commercial factors. What does this reveal about the relationship between platform governance, antitrust enforcement, and innovation timelines in digital advertising markets?

2. Retail media networks are growing rapidly, with Amazon and Walmart projected to capture over 89 percent of incremental US retail media spend in 2026. Evaluate the strategic implications of this concentration for mid-sized consumer goods brands that lack the scale to negotiate meaningful differentiated access across multiple retail media platforms.

3. The Trade Desk chose to develop Unified ID 2.0 as a free, open-source framework rather than a proprietary monetized product. Using frameworks from competitive strategy, analyse the logic of this decision and assess the long-term competitive advantages and risks of the open-source approach in the identity resolution market.

4. First-party data is now widely described as a strategic asset. However, the quality, scale, and governance requirements for first-party data differ substantially across industries. Identify two industries where first-party data collection is structurally difficult, and propose specific marketing strategies those industries might adopt to remain competitive in a post-cookie environment.

5. Data clean rooms address the privacy-safe data collaboration problem, but adoption among mid-market companies has been slowed by cost, technical complexity, and interoperability challenges. At what point does the economics of clean room adoption become defensible for an advertiser, and what organisational capabilities must be in place before the technology can deliver value?