A day without third-party cookies is looming: By late 2023, Google plans to eliminate the use of third-party cookies in Chrome—a browser used by an estimated 3.04 billion people worldwide, essentially disabling how most of our advertising and technologies work today.
Third-party cookies have been a backbone of the marketing industry for the past decade. They allow ad platforms to trace individual users across the Web, understand users' habits and interests, and then serve ad content that is relevant to each user's browsing history.
So why is Google removing valuable third-party cookies and wreaking havoc on the marketing world? The answer comes down to concerns about data privacy. Google and other ad tech entities are under scrutiny for their data practices, and those practices began to be regulated with the passage of the GDPR by the European Union a few years ago.
Privacy firms are also concerned about personally identifiable information (PII)—including full names, bank account numbers, and Social Security numbers—that can be collected from third-party pixels. People question whether entities (such as ad tech companies) collect PII that could be used on a wider scale or without consent from users. The idea is that those privacy concerns will be mitigated with the removal of third-party cookies.
Other Ad Tech Privacy Announcements That Address Concerns About Data Privacy
When discussing Google's new changes to third-party cookies, it is also imperative to acknowledge two major privacy modifications Apple recently announced. After all, about 1.65 billion Apple devices are in use worldwide.
Perhaps the most important announcement is that Apple is blocking the use of third-party cookies on Private Relay. The company stated that it will now send all Web traffic through two separate servers, obfuscating the IP addresses to ensure they are truly removed. Even Apple itself cannot gain access to IP data.
The company also announced a new initiative called Mail Privacy Protection, which disables marketers' ability to place pixels on emails that would have captured open rates. The Mail Privacy Protection effort will make it more difficult to measure the success of email campaigns, and it will also hide IP addresses.
Solutions for Replacing Third-Party Cookies in Chrome
When Google announced its plans for the removal of third-party cookies in Chrome, it left the industry spinning about how ad tech would function in the future. To reach a solution, Google introduced a Privacy Sandbox where ad tech companies, marketers, and website engineers could submit proposals for potential alternatives to fill the void left by third-party cookies.
Other companies, such as The Trade Desk and LiveRamp, began testing their own identity solutions: Unified ID 2.0 and Authenticated Traffic Solutions, respectively.
Many of the proposed solutions rely on a pixel placed on websites that collects users' data (such as email address) when they subscribe or log in to an advertiser's or publisher's site. Once the data is collected, the user's PII is hashed, making it anonymous. The anonymous ID is thrown into an identity bank that categorizes users by their interests and habits. Ad servers can then tap into that identity bank and target a group (not an individual user, unlike third-party cookies) with a relevant ad.
Such a process allows users to give consent for their data to be tracked and applied in the advertising field, which should overcome many concerns about data privacy.
Challenges of Third-Party Cookie Removal
Although the changes are beneficial for protecting users' data privacy, they pose some challenges for advertisers and marketers, specifically in the following three areas.
Most of the industry is confident that new targeting solutions will still allow companies to reach potential customers. Publishers and advertisers can use their own first-party data or rely on identity-mapping solutions to target prospects based on categories.
Google also proposed its Federated Learning of Cohorts (FLoC) solution, which would allow user consumption information to be gathered with consent, PII would be scrubbed, and the information would be placed in a bucket of users with similar attributes who could then be served relevant ads. However, Google announced in January 2022 that it was scrapping FLoC and replacing it with a system called Topics.
2. Retargeting and Frequency
A lack of confidence exists around whether new targeting solutions will foster adequate retargeting and frequency capabilities.
If technology cannot target individual users, then how can ads truly be relevant to consumers and appear to them at the appropriate times in the consumer journey? If technology does not allow for third parties to follow users as they browse the Web, then how adequately will advertisers be able to track the frequency of ads shown to a single user?
3. Attribution and Measurement
Disabling third-party cookies will also leave a gap in marketers' abilities to follow a user to a brand's website and measure the effectiveness of their ad campaigns throughout the online consumer journey. Advertisers are eager to know how they will be able to track user activity down to their website KPIs without third-party cookies—especially for upper-funnel tactics.
Embracing a Future Without Third-Party Cookies
The multitude of privacy changes uncovered thus far leaves advertisers and marketers itching to know what actions they should take now to combat a world without third-party cookies. Because many of the solutions and their impacts are still unknown, it is difficult to give an exact prescription to remedy the loss of consumer tracking and targeting.
However, there are some actions marketers can take today to prepare for a future without third-party cookies:
- Publishers should work to capture at least 25-30% of their website traffic via email forms and subscriptions. That allows them to collect a first-party audience hub for targeting.
- Because IP addresses are still live for channels such as audio and connected TV, marketers should consider pushing more campaigns into those areas.
- Marketers should test and evaluate identity mapping solutions such as Unified ID 2.0 and Authenticated Traffic Solutions. They should also review proposals in the Privacy Sandbox to gather and submit the critical feedback needed to vet and improve those solutions.
The criteria and solutions for tracking with third-party cookies are changing every day. Marketers must stay informed on new developments to be ready to act once third-party cookies are officially gone.
More Resources on Third-Party Cookies and Data Privacy
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