Singapore's advertisers must look to in-app amidst decline of cookies

It’s been notable that Google’s elimination of third-party cookies in Chrome is not negatively impacting all adtech companies equally. Whilst Google’s announcement in January did see some adtech stocks fall, it has by no means been market-wide.

Those adtech companies working on in-app technology in Singapore and elsewhere, for example, were spared the market turbulence, which is being fed by investor anxieties over the death of cookies resulting in less data for targeting and retargeting of online ads in desktop and mobile browsers.

Cookies have been a vital part of the online advertising industry for years now. They work by tracking online behaviour of consumers, deriving insights into their purchase intent and interests based on the sites they visit. This helps advertisers build up profiles of consumers that can be targeted with the most relevant and effective messaging, products, and promotions.

Digital advertising in Singapore increased by 25% last year and is expected to grow by 13% in 2020, according to Magna Advertising Forecast. Singapore’s total advertising market, which includes offline as well as digital spends, is worth around $2.1b (US$1.6b), with the lion’s share of the growth moving to digital and online channels.

But the rise of super apps and other forms of in-app advertising, thanks to adtech, are creating new opportunities for advertisers in the digital realm that are not dependent on cookies.

Rise of in-app
We’ve known for years now that cookies are on their way out. At the same time, we’ve witnessed the incredible rise of super apps, especially in Asia, which are building walled gardens of users that can be targeted by advertisers without the need for browser cookies.

The pressure on Google has simply grown too great over recent years, as concerns gained momentum around privacy, regulatory scrutiny increased, and it became obvious that a need to phase out reliance on online behaviour tracking through cookies was inevitable. The question was not if, but when.

Meanwhile, sympathy has waned for adtech companies that failed to evolve their offerings away from a reliance on cookies.

As we enter 2020, the death of the cookie has finally arrived. It’s time for the advent of in-app advertising, as mobile devices dominate the new advertising landscape and “super apps” continue to gain market share.

In Asia, this new category of app has been defined by the likes of WeChat, China’s ubiquitous chat app built by Tencent that offers everything from social media to grocery shopping and ride-hailing. WeChat’s users are sticky and engaged, creating a perfect melting pot for advertisers in a post-cookie environment.

Super apps a perfect melting pot for advertisers
In Southeast Asia, examples of super apps include ride-hailing app Grab, which won the battle for regional dominance against Uber in 2018 (Uber acquired a substantial stake in the Grab as part of the deal).

Grab is now building itself out into a real super app, with food delivery, travel bookings, and even payments - it has plans to become one of the world’s first digital banks. Last year, Grab launched a prepaid card in partnership with Mastercard in Singapore.

Unsurprisingly, it’s attracting users to its walled garden at a rapid clip - some industry pundits now predict that ads could become a $245m-plus cash cow for Grab in the near future as it starts to monetise a loyal user base - entirely without the need for browsers or cookies.

There are other notable super apps ready to fill the void for eager advertisers and their ad dollars. In Indonesia for example, Tokopedia is a dominant e-commerce app with a loyal user base of online shoppers and merchants.

Tokopedia was one of the region’s first tech companies to be valued at over a billion dollars. Meanwhile, the country’s main ride-hailing app, Go-Jek, is also expanding regionally and winning more market share across Southeast Asia. Its founder has since become the country’s education minister.

All this points to a new era - cookies are dead (but we’ve known that for years), it’s time for in-app.