The Internet’s tossing its cookies. Should that make you queasy?

21

August 2020

Sometime in the next year or so, the last third-party cookie will crumble to irrelevance.

Late last year, Google announced that its Chrome browser will gradually phase out the use of third-party cookies by January 2022. Since Chrome represents approximately 64% of the web browser market, and Firefox and Apple’s Safari have already blocked third-party cookies, this will essentially put an end date to the technology.

Privacy advocates celebrated this announcement, and even Google concedes that the elimination of third-party cookies will make web browsing more secure. Advertisers, on the other hand, stand to lose a significant amount of the data they’ve used to target their ads and report performance.

Some advertisers are also concerned that the lack of a unified “replacement” for cookies may bring about greater costs for brands and greater gains for individual tech giants such as Google, Facebook and Amazon. The risk is genuine, since the current online ad ecosystem essentially relies on third-party cookies to target and track advertising, and as of the time of this writing, no unified “standard” to replace cookies is underway.

How can marketers prepare for a future without third-party cookies?

What are third-party cookies, and who invited them?

A cookie is a small data file that websites can write to your hard drive when you visit them.

Originally, “first party” cookies were developed for same-site tracking like storing your login information or maintaining items in your shopping cart as you traverse an e-commerce website. First-party cookies are directly stored by the website you visit, letting website owners collect data, track your activity across that website, remember settings and perform other onsite functions that give you a good user experience.

3rd Party Cookie

Over time, ad tech companies expanded the use of cookies far beyond their original intent, resulting in cookies from external servers sharing data during your browsing sessions. When the domain associated with the cookie does not match the domain of the website you’re visiting, that’s a third-party cookie.

Why third-party cookies crumbled

Why third-party cookies crumbled

You probably encounter third-party cookies every day. For example, a marketing platform that has placed an ad on a website may send a cookie to the browser after you view or click on the ad. Third-party data is collected by a variety of publishers and is often sold to other companies for use.

Third-party cookies give marketers the ability to target, retarget, segment and even measure performance across websites. That’s why cookies evolved into the primary tool for identifying and tracking individual user behavior and how the user interacts with online advertisements.

However, the way this individual user data is collected—and sometimes sold across marketing companies (without us knowing)—has prompted recent privacy laws such as the EU’s GDPR and California’s CCPA. These concerns are also what eventually prompted browser companies to end support for them.

Without third-party cookies, advertisers will have to explore new methods to target and attribute traffic without tracking individual users. It will be much more challenging, if not impossible, to track data for:

  • Multi-touch attribution
  • Individual audience targeting
  • Third-party ad impressions and conversions
  • Cross-site retargeting
  • Frequency capping
  • Conversion attribution

The “industry” will provide … won’t it?

Perhaps the most unnerving part for advertisers about the elimination of third-party cookies is that there’s little news of companies coming together to create a set of unified technical standards to replace the cookie for tracking and reporting.

Instead, reports indicate that the major browser and marketing platforms have been working on their own respective ad programs, potentially creating “walled gardens” for ad data and tracking.

One can imagine the dominant players—Google, Amazon and Facebook—becoming more powerful with the enormous logged-in audiences that continually build fresh, first-party data for their advertisers to leverage. We already see patterns of this where Facebook favors posts that do not link off the platform and Google listings can be highly impacted by participation in other Google properties.

Strategies for the post-third-party cookie world

There is life after third-party cookies. You may need to audit your advertising methods (or your agencies’) to determine how your channels or tactics will be affected. Where applicable, you should begin testing non-cookie-based options to see which approaches work best. Here are two directions to explore:

Prioritize first-party tactics

Remember, first-party cookies—used by analytics tools (such as Google Analytics) and advertising services (such as Google Ads)—are managed by each individual website domain and are rarely shared. You’ll still be able to track your own visitors in the context of your own websites with first-party cookies. Optimize and expand your first-party data so you can:

  • Segment your own web traffic for targeting and retargeting
  • Leverage Google Analytics (or marketing platforms) to create remarketing lists and segments
  • Continue to build opt-in, in-house email lists
  • Track onsite behavior to tailor customized messaging

Deploy contextual targeting

Many platforms are encouraging contextual targeting, where you target ad placements based on the content or keywords of the webpage. Google has been offering this for years through their Display Network, and lately more and more programmatic vendors are beefing up in this area as well.

How does contextual targeting work? Here’s a simplistic example. Say you sell replacement parts for British sports cars. You could target your ads to webpages that rank high for obvious keywords such as “Triumph,” “MG” and “Austin Healy,” along with less obvious ones such as “V12 cylinder liner,” “rally seats” and “Bugeye Sprite.”

As the end of the third-party cookie approaches, you should be able to hone the keywords you need and be ready to excel at contextual targeting.

Even without cookies, advertisers still have chips on the table

As consumers, we stand to gain additional privacy through the elimination of third-party cookies. Advertisers, on the other hand, will find it much harder to leverage data that crosses websites and devices.

While the major ad platforms will no doubt find workarounds to track the consumer, the challenge for marketers may be less technical and more about the legality of collecting data with continually evolving standards surrounding consent and privacy.

As online privacy efforts continue to grow, the end of third-party cookies will likely not be the last change in the way we target and market to our audiences online.

How will your brand target online audiences without third-party cookies? Drop me a note and let’s talk about the potential!

Tim Grant

Tim Grant

Senior Director, Digital Marketing

Tim assists StudioNorth's clients by defining, implementing and measuring digital marketing programs that help their businesses grow. With a proven track record of building successful teams, Tim is charged with growing StudioNorth's digital group both in size and in breadth of service offerings.

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