Third-party cookies have been at the heart of digital advertising for years. But their days of tracking online customer behaviour for retargeting and personalised user experiences are numbered. Declaring the party over, major web players have started phasing third-party cookies out, pledging to end their reign. But what does it all mean for brands and agencies and the tracking of digital advertising performance?
The tech giants step in
Originally designed to capture and store data, settings, and preferences under user control, first-party cookies were, and still are, seen as a good thing, making the user experience more seamless and personal. But manipulated tech has allowed companies to collect user data for third parties (hence the name) who then use it to target or retarget customers with highly specific online ads.
Now, the companies behind all the major web browsers have made moves to make third-party cookies obsolete. Starting with Apple, who put Intelligent Tracking Prevention into its Safari browser in 2017 to block third-party cookies, and Mozilla, who announced it would block third-party cookies for its Firefox users back in 2019.
Apple added further cookie security to its iOS software in 2020 to give users a more explicit option of whether or not to grant permission for tracking and advertising purposes rather than burying it deep within the settings.
2020 also saw the announcement from Google saying that it plans to phase out third-party cookies from its Chrome browser by 2022 saying “Users are demanding greater privacy including transparency, choice, and control over how their data is used – it’s clear the web ecosystem needs to evolve to meet these increasing demands.”
A privacy-first approach
So why is all this change taking place? Over time, third-party cookies have gained a bad reputation with users, concerned with who has access to their data and how it’s being used. According to global research by Consumers International and the Internet Society, “75% of people distrust the way data is shared” and “63% of people find connected devices ‘creepy’”.
Together with changes in global privacy legislation and the increase in adblockers on browsers rendering third-party cookies useless, there’s a growing consensus that the web experience needs to change and put users back in control.
This marks a definite shift in digital advertising. Everyone from tech giants and global media companies to content production agencies, marketers, and digital advertisers will be affected and entire digital advertising strategies could have to be reworked.
But even as a tech market leader, Google doesn’t intend on crushing cookies altogether. While the phase-out of third-party cookies has begun, they fully intend to continue support for first-party cookies with a focus on privacy first to enrich the user experience.
In a statement about their Privacy Sandbox, Google is embracing the Federated Learning of Cohorts (FLoC) approach to “propose a new way for businesses to reach people with relevant content and ads by clustering large groups of people with similar interests. This approach effectively hides individuals “in the crowd” and uses on-device processing to keep a person’s web history private on the browser.”
So while there’s going to be some uncertainty about what digital advertising will look like in a cookieless world, how can advertising production agencies prepare for this seismic change to how digital advertising currently works?
Plan for some disruption
There will be plenty of overlap of privacy and cookie changes on all browsers, especially Chrome and Safari, so develop a strategy early to cope with this. But also plan any cookie-related ad spend by either stopping or reallocating your budget.
Keep up to date
Keeping up to date with any news on third-party cookies or privacy-related issues will help you lessen the impact. And if you rely on third-party data, look into alternatives and start testing to ease the transition.
Improve first-party data collection
First-party cookies aren’t going anywhere so make sure you’re compliant and fully optimised to collect the data you need. And look into your collected customer personal identifiers like email and phone details for customer segmentation analysis.
Consider contextual advertising
While third-party data allows you to place ads directly in front of your audience, contextual advertising allows you to place PPC ads on specific websites that rank for similar keywords as your ads, allowing you to widen your reach around a particular keyword.
Go back to basics
Be strategic and brainstorm alternative ways to reach your audience rather than relying on cookies, hyper-targeted ads and large amounts of data to mitigate the effect of future governance on your marketing efforts and allowing you to become less reliant on one piece of technology.
The move to remove third-party cookies and create a privacy-first online world is well underway, so it’s a good time to take action, explore the options, and redefine your digital advertising metrics through first-party data to deliver the best value for you or your clients.