The Death of the Cookie
Preparing Digital Marketers for a Cookie-less World
Both regulatory and consumer pressure for greater online privacy has been mounting over the past few years, but it was not until Google’s 2020 announcement that they would be phasing out third-party cookies on Chrome browsers by 2022 – which has since been delayed to 2023 – that this pressure effected significant change.
Dubbed “the death of the cookie”, the implications of this phase-out for digital advertising are enormous. Up to this point, brands have often relied upon Google’s third-party cookies to track website visitors and collect individual data that helps them tailor and target ads to specific audiences. Now, they are being forced to try and find alternatives that respect consumer privacy but still allow them to learn about relevant audiences.
What are Cookies?
Cookies are text files with small pieces of data that are stored on the user’s browser when they visit an online site. These snippets of code allow websites to record your browsing activity and remember certain user information.
First-Party and Third-Party Cookies
There are two types of cookies: first-party and third-party, a distinction that is particularly important given that Google is only phasing out the latter.
First-party cookies allow website owners to store basic user information, like usernames, passwords, and language preferences. Without these cookies, for example, you would have to log in every time that you entered a website. This data is stored directly by the website you are visiting and their primary focus is to provide a better user experience.
Whilst first-party cookies are accepted automatically, visitors must be informed that they are accepting third-party cookies because of the amount of data that companies can retain from them. Third-party cookies are typically used for advertising purposes; namely, to track online behaviour across different websites and find out about a user’s interests, purchases, and so on. With this detailed data, the “third-party” who created the cookie (usually an advertiser) can build comprehensive user profiles. In turn, they can create retargeting lists and send ads that target people with similar web profiles.
Third-Party Cookies and Privacy
When Google announced the phase-out last year, they explained: “Users are demanding greater privacy–including transparency, choice, and control over how their data is used–and it’s clear the web ecosystem needs to evolve to meet these increasing demands.” The third-party cookie has consistently been at the centre of this debate surrounding online privacy, and so the tech giant had no choice but to disown it and look to alternatives.
Privacy Sandbox and FLoC
So, what happens now? Although Google will no longer invest in technology that tracks people and collects detailed individual data, they will be providing alternatives. Namely, they have announced their “Privacy Sandbox” system, which aims to build “a more private, open web”. Whilst this mission statement might sound paradoxical, the new development will simultaneously allow websites to show targeted ads but reduce the amount of user information shared. Put simply, advertisers will be able to receive anonymised aggregated data about conversion and attribution, rather than cookies that give them access to the individual browsing habits of its users.
Google’s Privacy Sandbox is set to work in tandem with Federated Learning of Cohorts (FLoC), a technology that “hide[s] individuals within large crowds of people with common interests”. FLoC works by grouping you with others that it infers have the same interests as you. This information will still be based on your browsing history; however, Google will add you to their own “cohort” rather than sharing your browsing history with third-parties via cookies.
How Can Your Brand Adapt?
A cookie-less world is a frightening prospect for many advertisers. According to global research conducted by Adform and Dynata carried out earlier this year, adjusting to this digital overhaul is proving very difficult. They found that 78% of marketers globally have no tested solution in place for 2022, with this figure rising to 90% for UK marketers.
The brands that will thrive during this adtech evolution are those who want to rediscover an authentic brand voice. Whilst Google’s Privacy Sandbox will supply you with a helpful ad targeting tool, you should avoid solely relying on it. Instead, you should create a multifaceted digital strategy that links together all your consumer touchpoints.
Recognise and Utilise First-Party Data as a Marketing Resource
Although the advertising world has historically only placed real value on third-party data, there is now an opportunity to focus on turning first-party data into actionable insights. To start with, you will need to begin collecting your own first-party data if you have not already.
How you plan to use the data will impact what type of data you want to collect e.g. if the data will be used to send more personalised email marketing campaigns, you could gather it via an email survey. Notably, first-party data will give you access to data that your competitors do not have. But most importantly, first-party data comes from your actual site visitors, making it easier to create a personalised online experience.
Implement Contextual Advertising
Consider reviving older forms of targeted advertising, such as contextual advertising. Contextual advertising refers to the practice of displaying ads based on a website’s content, allowing you to circulate PPC ads on websites that rank for similar keywords as your ad. For instance, if you are selling running shoes, your PPC ad could show up on a blog about running or staying fit.
Contextual ads both match the expectations of the audience and guarantee that whoever views your ads will be more interested in the product or service you are selling. Re-imagining this strategy will allow advertisers to create more personalised ads, but without threatening personal privacy in any way.
New Opportunities to Build Trust
Navigating a cookie-less world will not be without its struggles; however, it will also open the door for greater innovation and new opportunities to rebuild consumer trust. As brands begin to take more ownership of their data responsibility, they will be able to create more meaningful interactions with their consumer base in a more transparent digital landscape.