It has been a long time coming, but it is now time to actively prepare yourself for third-party cookies going away. This will have significant impacts across the web. Today, we will focus on privacy issues and how the loss of third-party cookies will affect online marketing.
Introduction to the Death of Third-Party Cookies
To understand why third-party cookies are going away, it’s first important to have a grasp of what they are and why they exist.
Third-party cookies are website tracking codes that save information about a person’s actions when visiting a website. You can use this information to interact with that person when they visit another website. Advertisers and marketers commonly use third-party cookies to target their ads to people across platforms.
Google and Facebook provide two of the most commonly used third-party cookies for advertising. These cookies allow marketers to interact with potential customers more personally as they have more information about their behavior. If a person visits a particular product page, they have shown an interest in that product. If they add an item to the shopping cart but don’t complete the purchase, they have shown an intent to buy.
Marketers will use this information, stored in the cookies, to display adverts to that person through the advertising network of the cookie provider.
Big Tech and Third-Party Cookies
Large platforms like Google and Facebook have a tremendous amount of information about their users. This means marketers can also target them based on demographics and their interactions with their own websites. This level of information has allowed companies to very accurately target customers who will be interested in their products or services.
This has also allowed smaller startup companies that don’t have their own huge market research budgets to compete with more established brands when they have something new to offer. At the same time, users of platforms like Google and Facebook get to see products they are more interested in rather than just random adverts.
When you visit a website that doesn’t directly sell products to make profits — whether it’s a small blog, a video hosting platform, or a massive social media network — you will often see ads. This is often how their business models run, and this isn’t going to change any time soon. Third-party cookies also allowed for highly targeted ads, which saved advertisers money and provided relevant content to users.
Google is a leading provider of third-party cookies but is also a leading force in cookies going away. In 2019, Google announced a long-term roadmap to discontinue using third-party cookies. This means that when you use Google Chrome as your browser, your third-party browser cookies are going away. However, this hasn’t been as easy as planned, and Google has had to delay the switch. The move away from third-party cookies is now slated to happen in the second half of 2024.
Why Are Third-Party Cookies Going Away?
If companies like Google profit so massively from third-party cookies, why are they leading the charge in internet cookies going away? To answer this question, it’s important to consider how the internet has changed since the inception of third-party cookies — and, more importantly, how privacy concerns have led to certain regions passing legislation to limit the use of third-party data.
The Evolution of Internet Privacy
The first internet cookies were developed by Lou Montulli in 1994. They were deployed without the user’s knowledge or consent. This was a time when there were few concerns about internet privacy. The technology was still in its infancy and had not been widely adopted. It was certainly not the ubiquitous utility that it is today. Users were largely unaware of cookies until around 1996 when the media started reporting on them as a privacy concern.
This statement contributed to people realizing that their data is not only valuable but is being widely used and perhaps in a way that they didn’t initially understand. This concern led to new tools allowing consumers more control over their data. Some tools now allow users to:
From the 2000s until now, there has been an increasing awareness and concern for individuals’ online privacy. High-profile people within the tech industry have called out companies like Google and Facebook for how they use people’s data. Perhaps most notable is Apple’s Tim Cook. “…you are no longer the customer,” Cook said of people who use these free sites and give away their data. “You are the product.”
- Opt out of tracking
- Encrypt their communications
- Request that their data be deleted
Impact of Data Breaches and Legislation
Massive data breaches involving global companies, including Equifax, Marriot International, Yahoo, Target, and Capital One, have further damaged consumer confidence in the security of their personal information. While these data breaches didn’t necessarily involve third-party cookies, they affected hundreds of millions or billions of people each time. The scale of these leaks contributed to a general mistrust of companies’ ability to secure personal data.
The European Union (EU) was the first region to take legislative action over these concerns with The General Data Protection Regulation (GDPR). It was adopted in 2016 and became active in 2018. GDPR is a comprehensive privacy law that replaces the 1995 Data Protection Directive. It is comprehensive legislation intended to give those living within the EU protection and control over their personal data.
GDPR focuses strongly on transparency and user consent, with much more stringent obligations for organizations that use third-party cookies. The penalties for not complying with the laws are also harsher than before, reaching €20 million or 4% of a company’s annual revenue, whichever is greater.
In 2018, California passed its own legislation influenced by GDPR to protect consumers’ personal data with the California Consumer Privacy Act (CCPA). CCPA became active in 2020 and also focuses on user privacy and transparency from organizations handling personal data. While it only applies to California residents, it may lead the way for federal legislation in the future.
Impact of the Removal of Third-Party Cookies on the Digital Landscape
For better or worse, third-party cookies have been a part of the internet for nearly as long as it has existed. Removing any feature so integral to a service will have a massive impact. Here’s a look at the good and the bad of the end of these cookies.
How User Privacy is Changing
The removal of third-party cookies will improve the transparency of data collection. While it is common for websites to have a cookie consent banner or popup, you are not required to use one if you are operating your website outside of GDPR or CCPA regulations. Third-party cookies may be tracking your activity without your knowledge or consent. These cookies can be used to gain private information about you, like your sexuality or religion. This information can then be used against individuals by cyber criminals.
Even when third-party cookies are used for their intended purpose of targeted advertising, they can still feel intrusive. While many prefer seeing relevant adverts to random ones, others find it creepy. Google and Facebook both have incredibly advanced algorithms to predict behavior and desires. Because they are so good at predicting what you want, they are great for marketers. However, for the individual being targeted, it can feel like they know too much.
The Effect on the Digital Advertising Industry
As Google cookies are going away on Google Chrome, advertisers will no longer be able to target their ads to customers as they did before. The loss of third-party cookies will tremendously impact how businesses advertise online. Marketers will no longer be able to use tools like look-a-like audiences for retargeting. As your potential customer base is no longer segmented for you, you will need to rely more heavily on first-party data that you collect yourself.
The Need for New Strategies
First-party data will take center stage, and you must develop new strategies to gain this information from your customers. The more they interact with you directly, the more first-party data you will have. This means developing creative new strategies to encourage user engagement will become crucial to the modern online marketer.
Google Chrome’s Privacy Sandbox
Google Chrome’s Privacy Sandbox is an initiative to create new technologies that will provide greater privacy protections for individuals while still providing ways for businesses to market themselves successfully online. It aims to make third-party cookies obsolete by blocking their usage. It also plans to block covert tracking techniques that can be used to identify people, like Fingerprinting.
The move away from third-party cookies will see advertisers using interest-based markers to target customers. The new proposal is called ‘Topics’. Topics will be more private for users as the data will be stored on local devices without external servers. The data will only be held for three days, further alleviating privacy concerns.
The plan is to take the Privacy Sandbox further than just Google Chrome. It will go across Android, too, to provide privacy for people while using apps and offer a cohesive way for advertisers to reach their customers.
Alternatives to Third-Party Cookies
With browser cookies going away, businesses will have to turn to other alternatives.
Just because third-party cookies are going away doesn’t mean that you stop advertising. Online marketing will continue to grow, and your success will depend on your ability to adapt to alternative and new technologies.
First-Party Data and Why it’s King
First-party data is considered the most high-quality because you collect it directly from your customers. It is gained when customers interact with platforms that your business owns. It could be through:
- Interactions on a website
- Email engagement
- Purchase history
- Returns information
You can collect this data from various sources that you own, including your website, CRM, social media channels, or surveys that you conduct. It is specific to your company because it comes directly from your customers to your business. This allows for more significant insights into your customers’ behavior and preferences.
There are also minimal privacy concerns about this data being collected as the customer consents to its collection. And because you collect the data yourself, it is free. These two factors make it much more ethical and cost-effective.
Workarounds and Emerging Technologies
Workarounds like server-side and event-based tracking are valuable tools that rely on first-party data.
- Server-side tracking keeps the data close and is a more reliable and secure way to track events.
- Event-based tracking shows how a user interacts with a site through actions like clicks, video plays, and form submissions.
These are a more private way to offer a personalized experience to a visitor, as they are only based on events that have been performed rather than personal information.
New platforms and technologies are emerging as alternatives to third-party cookies. One of the most promising options is contextual advertising. This involves analyzing the content of the webpage, video, or platform where the ad will be placed. You then place an advert that relates to that content. This method matches the page’s relevancy with the advert rather than the individual with the advert. Even after the death of third-party cookies, you will still be able to have your ads placed where people will be interested in them.
Conclusion: Preparing for a Cookie-less Future
Third-party cookies are going away, so it is essential to understand why and adapt to the new landscape of online marketing that is in front of you. However, while third-party cookies may be disappearing, remember that not all internet cookies are. You can and must take advantage of first-party cookies. Think about creatively encouraging more engagement across platforms to gain more data than your competition.
Also, remember that Google is a company built on advertisers spending money across its platforms. Google needs advertisers to succeed for it to succeed. If you stay on top of changing technologies and online marketing strategies, this change is not a threat to your business — but rather a huge opportunity.