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Are You Overpaying for Cookies?

March 31, 2021
Teddy Jawde

Yieldmo has long championed better creative and privacy-compliant attention signals as a viable means of driving media performance. As it happens, there is also a growing economic rationale for embracing alternative approaches to cookie-based targeting and a strong case to consider diversifying now. 

Google’s most recent announcements have advertisers and their partners re-evaluating the future of audience-based targeting strategies. The disappearance of 3rd party cookies makes cross channel tracking, frequency capping and attribution difficult, if not impossible, for most marketing activities (non-CRM). Truthfully, much of this re-evaluation is long overdue.  With the singular focus on audience-based targeting, the market price of audience impressions has soared, creating an arbitrage opportunity for smart marketers looking to blend cost, precision, addressability and scale.  Yieldmo’s analysis highlights the extreme ways in which the market has tilted toward audience-based impressions and suggests some key ways savvy marketers can blend addressable and non-addressable buys for improved ROAS and better results. 

The Cookie-ID Premium 

In recent years marketers have taken as an article of faith the need to target individuals to achieve their marketing goals. Not surprisingly, the marketplace has responded, creating a huge price premium for cookie-addressable inventory.  The value of the walled gardens and addressable impressions has soared while much of the open web has languished.  

An analysis of the Yieldmo marketplace data highlights the variance in pricing between addressable and non-addressable impressions. Looking at our data, we see that 38% of the open web is reliably addressable via cookies and that this inventory sells for 2.6 times as much as inventory without an audience identifier.

An ad impression on a high-quality content site delivered to an Android user in New York fetches a $10 CPM, while the comparable iOS human in New York sees an ad that sells for $3.85.

Does the trackability of a user make them 2.6X more valuable to marketers? Is an iOS user on the same site that much less engaged or unlikely to see an ad? While many marketers may argue the premium makes sense for the assurance gained through attribution, too few marketers are examining that belief. They are focusing on what they can measure rather than maximizing the overall value of their media plans. 

Authenticated IDs to the rescue?

New privacy-minded authenticated identifiers like Unified ID 2.0 and LiveRamp’s ATS promise to help rectify the cookie challenge and are a welcome addition to the ecosystem. Based on user-provided PII (such as phone numbers or email addresses) hashed to be anonymized, these solutions promise to be more durable and privacy compliant than cookies.  Unfortunately, what they gain in permission and privacy, they lose in scale.  Publishers we know testing authenticated ID solutions are seeing low single-digit percentage sign-up rates. This means that over 90% of the users a publisher sees will not be identifiable by an authenticated ID. Even if, over time, publishers can drive up sign-up rates to 25%, we would expect only 10% of the (open) web to be targetable using an authenticated ID.  Authenticated IDs will help, but they aren’t the magic bullet for rebuilding a cookieless world.

The Rising Price of Certainty

With a continued reliance on traditional audience strategies and a shrinking pool of addressable impressions, we can expect competition to drive addressable prices sky-high while prices for the growing pool of non-addressable impressions wither.

To illustrate this point in our example above, assuming the same ad spend targeting the dwindling pool of IDs, the ID premium jumps to 14x, more than five times higher than today, representing a 280% increase in the CPM.   


While publishers will gladly embrace the extra revenue for addressable impressions, it won’t be enough to balance the losses they will face to grow the non-addressable inventory in their portfolio.  In our example, ID-less traffic would sell at a 31% discount from today’s prices. 

A Different Way: Balancing Addressable and Non-Addressable Impressions

At Yieldmo, we work with clients to blend audience, and non-audience approaches using learnings from audience buys to inform broader buys on the open web. 

Content Site Conversion Metrics

Today many of our clients look at view-through conversion as a means of assessing media performance.

In the above example, the conversion rate for traffic with sticky cookies appears to be 3.14 times higher than traffic without reliable cookies — so obviously, media with cookies is a lot more valuable-right? The problem with this metric is that view conversions are highly dependent on Durable IDs.  (The small percentage we see in our example is due to some iOS view conversions being trackable for a short window of time).  While at first glance, the cookie traffic appears to deliver far superior performance, in truth, the cookieless traffic just severely under reports conversions because of tracking restrictions already in place. 

A more interesting opportunity arises when you look at click-based conversion rates.  In this example, the click conversion rates from both cookiable and un-cookiable traffic are similar. So, as a marketer, you can either decide that addressable cookies just naturally convert from click to view through at a much higher rate, or you can consider the possibility that perhaps your cookieless traffic is delivering more value than you can see.  If you take the former position, you will continue to focus your media spend on the most expensive part of the inventory.  If you consider and test the latter approach, you may find undervalued pockets of inventory that deliver low-cost reach and performance for your brands. 

For brands without conversion data, Yieldmo can apply proxy-performance metrics such as attention and click-through rate (CTR) to illuminate ad effectiveness.

Again, a marketer can look at this simple example and say, “cookies work better and help me get attention,” or he or she can compare the difference in attention rate, evaluate it in the context of the price difference and choose to supplement an audience strategy with high attention inventory that delivers clicks at a much lower cost. No one size fits all answer exists, but by continuously testing, modeling and adjusting the blend of addressable and non-addressable impressions, a savvy marketer can stretch their media budget farther while gaining new users. 

Recommendation: Explore ID-less based line-items 

We recommend marketers break out non-ID based line-items and assess the best available performance proxy metrics. For example, consider setting up contextual line-items targeting your demographic’s typical content consumption and compare this performance to your more trackable audience line-item. 

Developing these competencies will be useful when additional cookieless options become available later this year. No single solution will be the silver bullet to replace what cookies do today, but alternatives for remarketing, behavioral targeting, frequency capping, and attribution, are in the works. And if you are like most marketers we work with, diversifying your strategies away from IDs already makes sense now.