In August of 2019 Google first announced their plan to rid Google Chrome of third-party cookies, the digital file advertisers use to target and track ads across the web. The announcement came as users and government regulators demanded more privacy from web giants, and signals a time of change for digital marketers who depend on the data cookies provide. 

The unease about web privacy isn’t new, and many web browsers, including Mozilla’s Firefox and Apple’s Safari have already done away with third party cookies. Google Chrome might not be the first browser to take this step, but it certainly is the largest–with 46% of internet users in the U.S. choosing Chrome as their browser. Not only is Google the largest web browser, it also the largest digital ad platform, accounting for 29% of digital media spend. 

This means that advertisers who use the largest ad platform to target users on the most-used web browser may have to change the way they track and deliver ads to their audiences. 

Cookies Explained

Internet cookies, much like the tasty treat, are best in moderation. And even though the term “cookies” is used broadly to describe any type of web-tracking code, Google’s initiative will only affect third party cookies, instead of the first-party cookie. 

First party cookies are pieces of tracking code owned by individual websites that track user activity only on the site itself. Have you ever wondered how Pinterest remembers your login information or Nike keeps items in your cart even after you left their site? That’s the work of a first-party cookie. 

They help the site owner learn about the behavior of users on their site, including which pages they visited and for how long. Better yet, the information about the users’ behavior stays between the user and the site owner, meaning that no outside party can access the data and use it for marketing purposes. 

Third party cookies, the kind now being phased out by Google, are any type of cookie created by another site outside one that you’re visiting. Instead of tracking users on a specific site, they track users as they navigate across many sites. Advertisers use the data from third-party cookies to retarget individuals with ads based on their past browsing activity. For example, getting an ad for running shoes on a baking website after visiting a sporting goods website. 

Will digital marketing be affected?

Some marketers will experience little, if any, disruption in the way they advertise. Most marketers, however, will see much more significant changes. 

Like we mentioned earlier, Google isn’t doing away with all cookies– just the ones that track users across the web. Fortunately (depending where you stand on data privacy) many of the largest web enterprises, including Google, Facebook, and Amazon, still collect first-party user data that they can use. 

This means if you rely on Google properties, like Search or Youtube advertising, you should be relatively unaffected since the data used for those properties is all first-party and owned by Google.

But even if you use Google platforms to buy ads on sites not owned by Google or to target people using the Chrome web browser, the short-term implications will still be minor. Most third-party audiences will diminish in size as cookies expire, which will require many marketers to adapt the way that they target users and find ways to reach audiences. 

Giving consumers control over the data they share will create long-term advantages for both consumers and advertisers.  The consumer will benefit from greater control and informed choice over their online experience, inspiring more trust between the consumer and the advertiser and increasing the likelihood that the consumer will be receptive to the marketing message. 

What do we do next?

As with any large shift in online policy, the industry as a whole is buzzing in search of a better solution. Considering Safari and Firefox have both already eliminated the third-party cookie, it should give marketers some optimism that maybe the cookie wasn’t all that necessary to begin with. 

Google’s Privacy Sandbox

In August of 2020, Google announced the creation of a “Privacy Sandbox,” which is meant to keep the efficiency of ad delivery intact after third-party cookies go to the wayside. Google created the Privacy Sandbox to preserve the anonymity of users while still allowing behavior-based targeting to marketers. The project is still in its infancy, so it’s tough to come by details, but based on the information we have thus far, the Sandbox will use a suite of API’s, not cookies, to gather information and group users into what Google is calling FLoCs (Federated Learning of Cohorts). 

A FLoC is just grouping of web users based on interests and browsing habits. To preserve the privacy of users, Google will analyze first party browsing data from Chrome users and group these users into relevant cohorts. This means that ads are served to the whole cohort, instead of to an individual user. 

This is similar to the way that Facebook handles advertising on its platform. Facebook puts users into interest-based groups using first party data then allows advertisers to target the groups as a whole. 

Contextual Advertising

Before there were cookies or big data, advertisers used elaborate syndicated focus group data to inform where to place ads based on the expected habits of their audience. 

Contextual advertising requires marketers to think strategically about their audience’s habits in order to reach them. A company selling guitars may place its ads on a website dedicated to music journalism or a camping supply company will choose to place a PPC ad on an outdoors-oriented website to reach its expected audience. 

This type of advertising is old-school and low-tech, but eliminates the need for cookies or user data. 

Leverage First-Party Data

Remember, first-party cookies aren’t going anywhere, and they basically behave the same way as third-party ones except they are contained to your business’s website. These cookies can still be used to gather data about your users and retarget them later. 

• Now is a good time to audit your CRM (customer relationship management) lists and make sure that they collect valuable data for your business. 
• Building your first-party data arsenal is important because those lists can be integrated with other platforms, and it’s like building your own focus group.

User ID Aggregation

Several data partners are coming up with different approaches to how to identify users across devices, and recapture the ability to set frequency caps as well as retarget: two major features affected by the deprecation of third party cookies.

This would be a combined effort between first part data and machine learning where the user themselves are kept anonymous, but we could still track the activity of this anonymized user.

It starts with an opt-in or first party data.  These integrations would figure out everything attached to this users: email address, phone number, physical address, and aggregate all that under one anonymous user identifier.  

The Trade Desk’s Unified ID (which is now an open sourced feature) and LiveRamp Identity Link are two of the major players in this space that perform this function.

Categorical Cohorts

Without cookies to rely on, marketers will no longer be able to achieve the hyper-personal digital ads of old. Instead, many marketers will have to adapt to a group-based targeting strategy that groups users into cohorts rather than the typical one-to-one targeting approach. Google, Apple, and Facebook all still have their own first party data. They just won’t allow your cookies onto their sites to mine it. They are still willing to sell their audiences, however. 

• The one-to-many cohorts are probabilistic based, and still rooted in the same statistical information and machine learning the individual information was. 
• Think in terms of categories rather than personas; similar to how you might think of cable networks.
• This might include going direct-to-publisher to tap into their walled garden first party set up.

Testing, Testing

While understandable, many fall into a trap of looking for a silver bullet that will have their ad dollars only targeting their hottest leads and ripest prospects. 

Marketers should expect to run test campaigns regularly to see who your target is, and if new optimizations would affect their engagement. Prioritizing your optimizations is key in finding efficiencies and isolating your target.

Brace for Impact

Marketers have known for a long time that the cookie would soon go away, but that doesn’t make it any less challenging to overcome. The good news is that all of the data once gathered by cookies still exists somewhere, just not in the one-to-one, turnkey systems we’re used to. 

Digital advertising has seen some upheavals in its relatively short tenure. Authentication of data disrupted the industry and left a trust void among advertisers which is still being restored through third-party auditors. 

Data is once again the center of attention, but this time among users, as digital advertising continues to seek a balanced place in the advertising ecosystem. it certainly will not be the last. If you need a partner who can help you navigate choppy waters and keep your brand moving without missing a beat, we think you should give us a call.