Goodbye Third-Party Cookies
Everything you need to know about Google’s upcoming change and how it may impact your marketing.
For 27 years, cookies have been the standard for improving website functionality and advertising targeting and tracking. But with Apple, Mozilla and now Google moving to block third-party cookies in 2022 in pursuit of more online privacy, marketers will be forced to imagine an internet without third-party cookies. Before we consider the future impact, let’s define cookies and briefly explore their history.
In This Article
What Are Cookies?
Internet cookies are small pieces of data that a website sends to a user’s computer. They remember helpful information about users and their preferences, such as login credentials and language settings. Cookies also help users navigate websites.
Netscape Communications programmer Lou Montulli invented cookies in 1994 to track whether or not a user had previously visited the Netscape website, but it didn’t take long for marketers to recognize their potential for advertising. Cookies soon became the standard for delivering personalized web experiences and targeted ads.
Today, cookies break into two categories: first- and third-party cookies. First-party cookies are data that a company collects on its own website, allowing the site owner to track users as they move across a single website. Third-party cookies are data collected by a company on a site other than its own. Used primarily for advertising, third-party cookies follow users from site to site, painting a fuller picture of their online behavior. Each user has thousands of third-party cookies following them around, with little visibility into what those cookies say about them.
As you may have guessed, third-party cookies have yielded growing privacy concerns.
Did you know? Internet cookies, also known as HTTP cookies, get their name from fortune cookies, which also carry embedded messages inside.
Why Is This Happening?
As consumer privacy expectations have evolved over time, the industry has identified a few problems with third-party cookies.
1. Cookies weren’t built for advertising.
Cookies were developed by a company to serve a specific need, and the technology has never been adjusted. Here’s a helpful analogy: Virtually overnight, cookies transformed the internet from a roomful of anonymous people into a roomful of people wearing thousands of name tags, each one visible only by the entity that created it.
2. A lack of standardized and agreed-upon regulations.
Despite the internet being the primary communication platform for most of the world, there are still very few regulations. This is especially apparent within privacy, inclusion and AI. We will continue to suffer pain points until standardization is established and abided by all. Given the numerous parties at the table, we don’t expect this to happen any time soon.
3. Data privacy is trending, literally and figuratively.
As scrutiny around internet data privacy has grown, the benefits of cookies and one-to-one targeting have gotten lost in the noise. At the same time, all eyes are on the ongoing antitrust lawsuits against Google, which may also be playing a role in Google's decision on cookies.
Interest in “data privacy” on Google has trended upward over the last 10 years.
Alongside these problems, Google announced plans in February 2020 to end support for third-party cookies in 2022, citing user privacy concerns at the heart of the decision. Buzz about the impact to advertisers sparked again last month when Google shared another update clarifying that it will not replace third-party cookies with any one-to-one tracking, killing the possibility of any new cookie-like technology.
Google joins the ranks of Safari and Firefox in blocking third-party cookies. Because these are the leading browsers, with Chrome alone earning almost 65 percent of browser market share worldwide, many marketers are calling Google’s phaseout the final nail in the coffin of third-party cookies.
The Impact on Marketers
There’s no doubt Google’s pivot will affect all digital marketers. Without third-party data tracking, marketers will no longer be able to target individual users based on behavior, and they will have to determine how to serve relevant ads without third-party cookies. Campaign attribution and measurement will also become more difficult. Because third-party cookies help track users across sites and platforms, limited access to this data will make visibility into the conversion path more opaque.
Retargeting and behavioral and personalized display targeting will be the digital marketing tactics most affected by the shift.
What Comes Next
Google’s announcement that it won’t adopt any new one-to-one tracking technology to replace the cookie represents a big industry shift. Even so, we’ve anticipated the death of the third-party cookie for some time. As the advertisers develop innovative replacements, we’ve rounded up targeting tactics, some new and some old, that we believe will fill the gap left by third-party cookies.
Below are solutions we’re proactively beginning to implement to prepare for third-party cookies becoming obsolete.
- Consent-based marketing: Initiatives using this tactic will allow individual users to opt-in to receive advertisements, sometimes with reward incentives such as premium features or even direct compensation.
- First-party cookie strategies: Most brands already have significant first-party cookie data and are likely leveraging it in their marketing efforts, but could be doing more with it. First-party cookie collection and segmentation are both viable, valuable strategies to consider.
- Contextual targeting: The shift away from third-party cookies may have some positive implications. Understanding your target audience and the content they care about, and placing meaningful ads where users are already looking connects to the heart of advertising. It’s not fancy machine learning, but it’s powerful and effective when done well.
- IP targeting: This tactic enables brands to target users at specific household or business locations. Though its accuracy and scale is uncertain, IP targeting is a good alternative for platforms such as connected TV ads.
- Randomized control trials (RCT): Like its research counterpart in healthcare and other fields, this targeting tactic relies on placing users into control groups based on a defining characteristic such as geography. Marketers can run ads to these groups and then compare the results in order to measure effectiveness and continually iterate. We like RCTs as an alternative both for targeting and measuring impact.
- Google's Federated Learning of Cohorts (FLoC): This is Google’s new “privacy-first advertising technology.” With FLoC, Google will store users' behavior from across the web, and build groups of users with similar interests that advertisers can target without using cookies. Though the technology is still new, Google is confident that marketers will see at least 95 percent of the conversions per dollar spent when compared to cookie-based advertising. As a certified Google Partner company, we are working closely with our Google reps to stay up to date on all new developments as they share more about how to prepare and what to expect.
Based on everything we know about this fundamental shift in our industry, we do not believe that cookie-like tracking solutions are long-term viable solutions. A few tactics that we’ve heard about that we do not think will work well include things like:
- Digital fingerprinting: This happens at the browser or the device level, combining bits of user information, such as all the public backend specifications of a set-up, the size of the screen, fonts, plugins, and IP addresses, to form a user’s unique ID, or “fingerprint.”. This targeting method will not likely be a long-term solution because it is not privacy-centric and browsers have already begun to combat it.
- Identity graphing: This uses machine learning algorithms and user-provided IDs, like email addresses and site logins, to bundle activity across platforms and devices into holistic individual profiles. We think this technology would be great if there were user controls. This tactic is not likely to get legs in our current privacy-centric landscape, but it may emerge in the future as a viable option if/when we establish agreed upon standardization and regulations
Preparing for a Future Without Cookies
While we don’t know fully what will replace cookies, building trust with customers and understanding their needs will remain essential to successful marketing strategies. We’ve already begun diversifying our targeting, spending and channel mix throughout the funnel, helping to mitigate the impact.
No one has all the answers, but we’re committed to educating our clients about the concrete steps we’re taking to deliver results.
If you'd like to learn more, you can keep reading through the resources below, and as always, contact us with any questions about how these changes may affect your campaign.
- Martech: "Beyond the Cookie: What's Next for Attribution"
- Clarivoy: "Why Ad Tech Is Better Off Without Third-Party Cookies"
- AdExchanger: "Ad Tech Jockeys For Position"
- Marketing Land: "The Third-Party Browser Tracking Cookie is Dead. What's Next?"
- Search Engine Journal: "Floc is Coming—Here's What We Know So Far"
- CNBC: "Google Says it Won't Use New Ways of Tracking You as it Phases Out Browser Cookies for Ads"