In early 2020, Google first announced that it was removing third-party cookies from the Chrome browser. The tech giant has since postponed the phaseout to 2024, another year of extension from the previous deadline.
The postponement aims to provide digital advertisers time to adjust to a more privacy-conscious environment. Google announced the postponement through a blog by Anthony Chavez, VP of Privacy Sandbox, a Google initiative.
“Improving people’s privacy, while giving businesses the tools they need to succeed online, is vital to the future of the open web,” Chavez said. “The most consistent feedback we’ve received is the need for more time to evaluate and test the new Privacy Sandbox technologies before deprecating third-party cookies in Google Chrome.”
Brands now have less than two years to transition into a world without third-party cookies, and they should start working on viable alternatives if they aren’t already.
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What are Third-Party Cookies?
Google defines a cookie as a file a website creates when users visit it. Cookies save the user’s browser information to keep them signed in and deliver relevant content based on their previous browsing history.
A third-party cookie is set up by a third party—a website that a user is not currently on. The third-party website will track the user’s site visits to target them for advertising and marketing purposes in the future.
Once people visit a website, they leave a trail of their history and preferences—these “cookie crumbs” are vital data for advertisers.
PS: if you’d like to learn more about this topic, we’ve talked about third-party cookies and data in this article.
The programming world was already using the cookie concept long before web browser programmer Lou Montulli officially coined the term in 1994. In programming parlance, it referred to the cookies used in web communications. Montulli was working for Netscape Communications, and his goal was to use the cookie to efficiently implement a virtual shopping cart for its ecommerce site.
A year later, Internet Explorer (Version 2.0) integrated cookies into its system. The implementation continued to grow, and cookies became massively popular among advertisers that wanted to track consumer preferences for contextual advertising.
The Different Types of Cookies
If there is a third-party cookie, there are also first- and second-party cookies. Here are the differences:
1. First-party cookies
When a person visits a website, it stores information about them so that neither the website nor the user will start from zero on their next visit. Pieces of data are stored in the first-party cookies of the website itself.
First-party data includes login information, viewed web pages, preferences within the website, and favorite topics. Collecting first-party data allows the website to provide visitors with an optimized experience when they return.
2. Second-party cookies
Data collected from second-party cookies are shared between partners. The most common example is when an airline and hotel chain share data because they have the same goals: to target travelers and encourage bookings.
3. Third-party cookies
Third-party cookies are information collected by another web server to study users’ online behavior for targeted advertising. They primarily benefit advertisers and social networks, as these entities monitor the online activities and habits of internet users.
Why is Google Slowly Getting Rid of Cookies?
Third-party cookies are essential in marketing communications and digital marketing. However, they can be the bane of people’s online privacy.
Questions about consumer privacy were raised as early as 1996 when the Financial Times published an article about cookies. Party cookies were the subject of two Federal Trade Commission hearings in 1996 and 1997.
In recent years, authorities have become more conscious of protecting people’s privacy. The General Data Protection Regulation of the European Union was passed in 2016 and enforced in 2018. These are the strictest privacy regulations in the world and seek to fine and penalize entities that violate privacy and security standards.
Google had to recalibrate once these regulations were enforced, which gave birth to Privacy Sandbox, a tool that advertisers and marketers can use without violating consumer privacy. Other browsers, such as Mozilla Firefox and Safari, have long phased out third-party cookies.
In 2020, Google announced it will slowly remove third-party cookies from its browser. Chrome is the most popular web browser in the world, taking up 64% of the global market share. Google’s decisions certainly shook the digital marketing industry, which depended heavily on third-party data to target ads.
The advertising industry has had time to prepare for the loss of third-party cookies in the future, which opened the digital landscape to innovation.
What Has Changed in the Past Few Years?
Web servers, advertisers, and data management platforms must gradually transition to a system that will not be dependent on third-party cookies. It’s best to implement new systems long before the 2024 Google Chrome phaseout.
Optimizing First-Party Cookies
Is it really a change when it’s just utilizing what is already available? The first-party cookie is not going anywhere, even with the impending death of third-party cookies. It means that first-party data will be crucial in creating an effective marketing strategy.
First-party information is largely considered the most accurate data that can be collected because it comes directly from website visitors and consumers.
Many companies have gone back to basics, investing in email marketing software to open communications for personalized emails and newsletters. However, some consumers might consider these direct communications annoying at best and intrusive at worst. Some advertisers have turned to rewards—offering incentives for subscribing to newsletters and answering emails, which will help them understand what their consumers want.
Optimizing first-party data can help brands track users and their preferences with their direct participation. If consumers know that answering a few questions will improve their web sessions, they will be more willing to take surveys or answer a few marketing questions.
Building a Web Ecosystem
To maximize audience reach, brands now have everything: an efficient website; active Facebook, Instagram, Snapchat, and Twitter accounts; fun TikTok videos; and an informative and professional LinkedIn presence.
Maintaining a healthy online presence will allow all complimentary social networks to provide opportunities for engagement. Brands can collect data through various platforms to develop targeted marketing strategies.
Highlighting the Value Exchange
Value exchange is omnipresent in the digital space. When consumers purchase something online, there is a value exchange—they exchange money for a product or service. This transaction can also be a means of collecting data. In fact, brands have been banking on this method to assuage the effects of the imminent removal of third-party cookies.
Established and emerging companies are offering personalized shopping or browsing experiences on web servers in exchange for personal data. This user information can be used for digital advertising and targeted marketing in the future.
Filling the Void with Artificial Intelligence
AI also tracks similar interests from various online activities, which will be helpful in contextual advertising. It is one of the most valuable tools for collecting data from individual users without the need for third-party cookies.
Utilization of Online Universal IDs
Many countries have national ID systems that store their citizens’ personal information. And in the online world, there are also universal identifications for users. These identity solutions are similar to cookies stored in a visitor’s browser, computer, or mobile phone.
The universal ID provides unique or alternate identifiers so ad technology providers can track identities for targeted advertising without third-party cookies. The ID can also unify first-party relationships for the entire online ecosystem while maintaining consumer privacy.
Trade Desk is behind the testing of Unified ID 2.0 to successfully replace third-party cookies. It primarily depends on pixel tags to track information, much like LiveRamp’s Authenticated Traffic Solutions.
Growing CRM Database
Customer relationship management databases will be even more critical for brands as they are not affected by Google opting out of the third-party cookie system. It’s crucial to keep all customer information up-to-date and focus on collecting emails to continue building and growing relationships directly.
CRM databases go hand in hand with robust analytics dashboards to provide future solutions for targeted digital marketing.
The Flop of the FLoC
Google announced it was replacing third-party cookies with the Federated Learning of Cohorts (FLoC). This is a type of web tracking mechanism that tracks a user’s browsing history. However, it didn’t actually use federated learning, and online groups did not welcome its anticompetitive nature.
Google has since replaced FLoC with Topics API, and the jury is still out on this one.
What will Happen to the Future of Advertising?
The future loss of third-party cookies has created fear that the new environment may choke the economic oxygen of online advertising. But if there’s a will—coupled with technology and robust digital solutions—there is always a way.
Google had to delay its phaseout of third-party cookies as it continues to test other solutions. FLoC may not have worked out, but something bigger is still in its arsenal. Along with Topics API, FLoC has been integrated into a project called Privacy Sandbox, designed to create the standards for how websites access user information in the future.
Chrome engineering launched the Privacy Sandbox in 2019 to unify user privacy standards among various basic browsers. There are many proposals for third-party cookie replacement tools under the Privacy Sandbox umbrella.
Without third-party cookies, digital advertising seems to be headed in a more expensive direction, with ad targeting becoming more complex. But it will also lead to innovation and more effective strategies.
One common complaint about third-party cookies is that they don’t always hit the target. Now, brands and marketers can take their user tracking and advertising efforts to the next level.
Three Forecasted Scenarios
Technological research and consulting firm Gartner outlined three potential scenarios that will emerge with the death of third-party cookies:
1. Walled gardens
In this scenario, the biggest tech companies, Google, Meta, and Amazon, will dominate first-party data collection and restrict access by independent data brokers. The dominance will create a walled garden, making it much more difficult for smaller companies to track similar data.
Gartner encourages smaller platforms to nurture their own first-party capability to compete on these top enterprises’ levels.
2. Consent economy
Strong antitrust policing will rise, paving the way for a robust consent economy that favors trusted publishers. In this case, brands must create privacy-compliant identity resolution solutions.
This will also lead to common partnerships between trusted big-name publishers and small vendors.
3. Identity innovation
New technologies will rise to develop new ways of protecting privacy while maintaining a massive platform for targeted digital advertisements. Small platforms must create strong ties with identity resolution providers and data agencies that provide sophisticated data matching.
How to Prepare Your eCommerce for the Future
The future is now—you shouldn’t wait for Google to perfect its third-party replacement or for other technologies to provide your business with pricey alternatives. Now is the best time to consider tools like artificial intelligence, value exchange, and the overall web ecosystem, among others, and optimize them for data collection.
It’s also important to continue optimizing what you have always had easy access to: first-party cookies. Surviving in a digital landscape without third-party cookies will hinge on your first-party data strategy. Advancing your strategy entails using software or partnerships with agencies that can implement tactics for your ecommerce business.
Thriving in a post-third-party-cookies world also means leveraging incentives and providing equivalent value to make consumers willingly provide data for contextual advertising.
Marketing and advertising will outlast third-party cookies; there’s no doubt about it. Ecommerce brands must adapt to a cookie-less world right now, long before the biggest web browser in the world eliminates them completely.
By staying on top of innovations and continuing to squeeze everything out of first-party data, little to no marketing disruption will occur, and your brand will continue to survive and thrive.