I called my good friend Bill Lederer to ask him what effect Google’s and Apple’s decisions earlier this year to ban third-party cookies and device IDs on their Chrome and Safari/IOS browsers would have on digital advertising. My hypothesis was that context — content and environment — were more important now.

Bill is Co-Founder and CEO of iSOCRATES, a global marketing and advertising technology and services company that, among other things, executes digital ad campaigns for major advertisers and monetizes ad inventory for major publishers.

Before I give you Bill’s answer and the implications of that answer, here’s a little background.

In 2007, Real Media made the first computer-to-computer digital ad placement (other than Google or Facebook), that at the time was referred to as real-time bidding (RTB). Over the succeeding years, RTB grew exponentially and came to be called programmatic trading. By 2020, digital advertising accounted for 66 percent of total U.S. advertising investment, or $356 billion, and just over 90 percent of all digital advertising, or $320 billion, was placed programmatically.

When you go to a website or open an app on your laptop or cell phone, the ad spaces on that page are instantaneously put up for sale on an ad exchange (the biggest exchange by far is owned by Google), an advertiser bids to serve an ad to you (the biggest ad serving platform by far is owned by Google) and if the advertiser wins the auction, an ad is served to you. This auction and related ad serving happens in about 200 milliseconds (the blink of an eye), as the page is loading, so you are unaware of what’s happening.

The key to programmatic’s explosion is that an ad is served “to you.” Because of cookies and device IDs, when the ad space on a website or mobile app you just opened was put up for auction on an exchange, advertisers knew exactly who you were, where you were and all about your browsing history. It was precise targeting; what Bill Lederer calls a laser-guided missile.

With Chrome and Safari/IOS eliminating third-party access to cookies and device IDs unless the consumer opts-in to personal tracking(which is highly unlikely without incentives), except on Google, Facebook and Amazon, this precise one-to-one audience targeting disappears. Now when advertisers bid on an ad impression, they have to evaluate the context — the content and environment — of the page on which an ad will appear and make some assumptions about the type of people who would consume that content. In other words, the content and the context the audience is consuming becomes a proxy by which a marketer must now infer the identity of the underlying audiences. For example, older people watch CBS’s “60 Minutes,” therefore Pfizer is more likely to find its audience there.

As Bill Lederer explained, “Advertisers must return to pre-internet, imprecise assumptions about context and audience. Advertisers will be returning to horseshoes and grenades, in which just getting close to the intended target has to be good enough.  For performance marketers, this will not be unlike returning to the Dark Ages after living in the Renaissance.”

What are the practical implications of this move to context from precision, privacy-busting targeting?

First, you will get less relevant digital ads. You’ll be asking “why did I get that ad?” Less relevant digital ads will probably result in people paying even less attention to ads, which, in turn, will mean advertisers will have a lower return on ad investment (ROI) and, thus, will have to invest more in digital advertising or switch to a more targeted digital medium such as Google, Facebook or Amazon or more targeted television such as connected TV (CTV).

Second, as Bill Lederer posits, “New currencies such as small monetary payments, cashback or redeemable points will be competing to incentivize audiences to opt-in to tracking, permissioned data-sharing and for attention itself.”

Third, creative execution will become more important in advertising, sort of a return to the days of Don Draper and “Mad Men” and to The Big Idea that connects to people emotionally because when you’re throwing horseshoes or grenades, getting closer to the target is how you win.