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3rd-party Cookie Age is (almost) Over: What Advertisers and Marketers Are Doing


Synopsis

3rd-party cookies came under focus when Google affirmed in January 2020 that it would phase them out from its Chrome browser by early 2022. Then, it re-set the deadline to 2023-end after publishers, advertisers, and other online market players pushed back. Google is the pack leader, and this announcement, ostensibly to protect people’s privacy, has send the advertising and marketing worlds into a mad scramble for 3rd-party cookie alternatives. Well, there are cookies and cookies. Remember, for lack of a perfect solution, the world had to make do with this flawed solution. For the lazy marketer and publisher, third-party cookies also became the easy way out.

While 3rd-party cookies are about to crumble, one must understand that there are other cookies like the 1st-party cookie that can still be relied on. And don’t forget, only 3rd-party cookies are on the way out, but not 3rd-party data. While the industry is looking at other “viable” options to replace 3rd-party cookie tracking, Google is working on its own solutions. Two years is time enough for the industry to arrive at some common alternatives, with or without Google’s help. Also, you probably won’t be affected by this change if all you want to track is your website’s visitors’ behaviors, preferences, and basic demographics while they’re browsing your site only.

The Express Analytics CDP Oyster helps companies integrate data and get deeper insights with its mature ID resolution capability.

 

What Are Cookies

Cookies first began appearing on the web in 1994, and today, most major websites require visitors to accept them when they visit a site.

A 1st-party and a 3rd-party cookie are the same kind of file from a technical perspective. The only difference lies in how websites create and use them.

As with any invention, cookies took on a life of their own. In some cases, cookies were used for purposes other than what they were intended for, which led to a more varied, or even negative, experience.

Cookies can be deleted by using the cookie manager of your device, or deleting the cookies on your browser. Although browsers offer their own ways to manage cookies, most major websites still use third-party cookies and refuse to delete them.

A technology that has been abused beyond its intended purpose, cookies can lead to untargeted campaigns and be detrimental to the user experience. Cookies have the ability to be a useful tool in marketing, and also to provide greater privacy to those who desire it. When users decline cookies, they become invisible to websites, which may protect privacy but can sometimes lead to a confusing user experience.

1st-party cookies: Whenever a visitor visits your site, a 1st-party cookie gets generated and stored on that person’s computer by default. It is often used to remember a user’s password, basic information about them, and other preferences. 

A single 1st-party cookie allows you to see what your users did when they visited your website, how frequently they visit it, and other basic analytics that can inform your marketing strategy. However, you are not able to see related information about the other websites that the same person may have visited. 

Here’s an example: How does Amazon remember your login information, language, items in your cart, and many other details to make your navigation so effortless? By using 1st-party cookies.

On the other side of 1st-party cookie tracking are analytics dashboards that allow marketers to have access to such cookie data. Which means they can see metrics like the number of web sessions, the number of pages people clicked on, and so on. 

In short: A 1st-party cookie is generally used only by the site you are visiting.

3rd-party cookies: In addition to your own cookies, 3rd-party cookies are tracking codes that another website places on the computer of a visitor. When a web visitor visits your site, so also other sites, the 3rd-party cookie tracks their visit and sends this information to the third-party (mostly an advertiser) who created the cookie. 

If you’re an advertiser, 3rd-party cookie data provide insights into the online behaviors of your web visitors, such as what websites they frequently visit, what they’ve bought, and their interests, from multiple sources. The detailed data allows you to build robust profiles of your visitors. Using this information, you can create a retargeting list that can be used to send ads to past visitors or people with similar web profiles.

3rd-party cookies can track your online browsing to deliver tailored ads. Advertisers know about your personal interests, so they show you the ads accordingly. This means such cookies are stored in your browser or device. But this method also violates an individual’s privacy.

Here’s an example: Say you want to buy a smartwatch, and so search many websites, including say an X site for it. From the X site, you go to another Y e-commerce site later, but are surprised to see the X site advertisement for smartwatches on the Y e-commerce site. A 3rd-party cookie may have triggered this advertisement.

Thus, such cookies are now used in many aspects of digital marketing. 

These are great things to have (at least so far) from an advertiser or marketer’s viewpoint. Or even Google’s for that matter. Till of course all the privacy laws such as GDPR kicked in as Internet surfers started complaining about invasion of their privacy.

In contrast to 1st-party cookies, under privacy laws, 3rd-party cookies must be explicitly acknowledged as part of the cookie acceptance process due to the amount of information that can be retained.

So what is going away in 2023? Cookies placed by advertisers to better understand Internet users when they are not on your website.

What Did Google Say?

The company announced that Chrome will have a feature that will block 3rd-party cookies. By implementing this measure, it will be harder for advertisers to track the browsing habits of people on the Internet.

Google plans to block 3rd-party cookies also on mobile devices and Android.

Which means it will help Chrome users to block 3rd-party cookies, which usually come from Google, Facebook and Twitter, too.

Following the announcement, many publishers and advertisers have been preparing for a “cookieless” world. 

What some of you may not know is that 3rd-party cookies have already been phased out from Safari, Firefox and other browsers. Chrome browser is the last bastion that will be stormed, but it presents a big challenge since it holds about 65% of the browser market share. 

But after postponing the deadline, Google eventually announced that it will not implement alternative user-level identifiers to replace 3rd-party cookies. That’s great news, in so far as the individual is concerned. The announcement said not only will Google not build alternate identifiers to track individuals as they browse across the web, but would also not use them in its products. 

3rd-party Cookie Alternatives That Google Is Working On

The company recently decided to delay its decision to block 3rd-party cookies ostensibly to give itself more time to develop privacy-friendly alternatives to 3rd-party cookies, as well as to allow websites to adapt.

Clearly, 3rd-party cookies are a thing of the past. Blocking of 3rd-party cookies is a good move by Google, but will it be enough? For example, Google is now providing an option for blocking 3rd-party cookies on JavaScript-enabled sites with Chrome 54. The ‘Disable 3rd-party Cookies’ option will be available from the “Security” tab of the “Settings” menu in Chrome. 

The deadline may be a couple of years away, and it’s too early in the day to comment on the alternates Google itself is working on, but here are initial introductions to some of them:

Google Privacy Sandbox: Although the company may have caused this 3rd-party cookie problem, it is now developing remedies. Google’s Privacy Sandbox is an umbrella initiative for a wide range of experimental APIs and open-source tracking solutions. 

The Privacy Sandbox is a project of the Google Advanced Technology and Projects (ATAP) group. ATP helps Google foster innovation through taking risks and failing, and accelerates the development of technology projects that push the boundaries of what’s possible.

It is a development framework for experimenting with new kinds of data collection, targeted advertising, and audience development. The “Privacy Sandbox” builds upon the valuable work that was already underway in some Google products (such as Gmail and YouTube) by combining that experience with leading-edge security engineering, user research, and advertising technology.

FLoC: By using browser data, the FLoC API creates large cohorts composed of people who share similar behaviors, such as visiting similar websites. In this way, an individual’s data is protected and they are guaranteed a greater degree of privacy.

The Application Programming Interface (API) is a set of tools and subroutines for building application programs. The FLoC API is a web service that is accessed via a client, and it comes with Java or PHP examples, both of which are platforms that provide application programming interfaces (APIs).

Rather than segmenting users based on their behaviors, they store what devices each user visits and how his devices change over time. It can be very useful for the acquisition of new users and for understanding what pages are visited by certain groups. 

Data can be stored in the sample database, as well as categorized according to a number of parameters. These parameters include the audience who is accessing the website, the type of page, etc.

Data can be sent to the API using the HTTPS protocol, which is an application level protocol used for data transfer. This is done via an API Key, which is a cryptographic key to the API and it must be treated as confidential and it’s important that it not be disclosed or shared with any third party.

For advertisers, all this is bad news though, for the FLoC API only allows access to data about the user’s browser. But that’s the way the cookie may eventually crumble.

So How Will The Post 3rd-party Cookie World Be?

It’s too early to envisage how things will eventually turn out, but one thing is clear – the future of advertising and marketing is moving away from 3rd-party cookies, perhaps to directly analyze identity graphs. Instead of using 3rd-party cookies, all ad platforms will migrate toward “cookieless” audiences. And don’t forget, it will be possible to continue to retarget audiences on your website with 1st-party data, as we mentioned earlier in this post.

Efforts are now on to create suitable alternatives to third-party cookie tracking by: (a) Google (b) other industry players

Google itself is rooting for the use of 1st-party data. In early March 2021, it announced that the replacement of 3rd-party cookies is first-party data. 

For Google, this is no problem, since it already has a vast amount of 1st-party data collected directly from users for ad targeting. Within Google’s walled gardens this may work well, but some other publishers may find themselves left high and dry by this. 

But on the face of it at least, Google has indicated it will not leave such publishers hanging. The search engine will provide support for all publishers to succeed in their efforts at finding alternatives, saying it would continue to support first-party relationships on Google’s own ad platforms for partners, in which they have direct connections with their own customers. 

It is not just tracking that will be affected by the death of the 3rd-party cookie, but numerous aspects of how marketers and publishers advertise. 

Writing in Forbes, Jeff Kupietzky, CEO at Jeeng, a company into the creation of of automated & personalized messaging, says: 

 It will have a major impact on:

Targeting, identity and addressability, and content monetization, to name a few There will be new ways for businesses to track and identify their audiences on the web. 

Cookie death could affect publishers’ monetization of content and brand advertising. But with the right strategies, the revenue channels and mix of revenue may shift and hopefully grow.

There’s no one-size-fits-all solution, and only time will tell which solutions will eventually find industry (and Google) acceptance. 

With that in mind, here are some of the identity solutions that have already thrown their hat in the ring.

What Options Are Marketing And Advertising Considering?

With the 3rd-party cookie about to go stale, advertisers and marketers are actively looking for new ways to track people. The time has come to put an end to 3rd-party data once and for all, and focus on developing relationships with your customers. For decades, marketing has been addicted to 3rd-party data, but not because it was the most effective strategy for reaching their target customer. It was because the data was so easy to access and to execute short-term campaigns. As a result of Google’s announcement, marketers should reconsider their reliance on 3rd-party data and instead review the data strategies within their organizations.

Even without Chrome’s 3rd-party cookie data, you’ll still be able to leverage and target Google Ads, which will be powered by Chrome’s 1st-party cookies and the Privacy Sandbox tools. 

One point to note here is: 3rd-party cookies might go away but 3rd-party data will not. Membership cards, loyalty programs, email subscribers, social media insights, and more will be other ways for businesses to continue to access this information.  

Most advertising solutions will use it to ensure that you have all of the identifying data you need to continue to target the right people. For example, you will be able to target ads across the web based on an email list. It requires the user to be logged in to the website we are targeting, ensuring near 100 percent accuracy in “cookieless” advertising.

Here are the options that the industry is working on:

1. Unified ID for identity

To take the place of 3rd-party cookies, advertising technology companies are developing universal ID solutions. The latter offer a standardized ID that all participating companies can use to target consumers across the web. 

These will be used to establish the identity of the user. In the past, cookies were used to do this, but now Unified ID 2.0 may become the new standard. An example is the one originally developed by the TradeDesk, which is now open source.  

Unified ID is an open, “consent-first” framework, meaning advertisers will get this data from users who have given their consent for data collection on a publishing site.

2. Contextual data

An individual’s contextual data is related to the specific topics he or she is reading about. Having this information gives you a better sense of a person’s propensity to buy, their interests, etc. 

Marketers may start using contextual data for developing a 360° view of who a user is, and his/her interests. All this will enable one-on-one targeting. So, instead of sending ads out to a large group of people, you can use contextual ads to target a single person. 

Rather than displaying ads based on a prospect’s overall behavior profile, contextual targeting displays ads based on the content they are viewing. So, when you will be visiting a travel blog, you will see contextual ads for hotel discounts.

In contextual targeting, the ads you see are tailored to the content you are currently viewing rather than to your browsing history.

Content creation and distribution will once again be key to contextual targeting. In the future, content will be the cookie.

3. First-party data use

Advertisers and publishers can rely on 1st-party data to replace 3rd-party data by using channels where there is a plethora of it. When it comes to improving campaign performance, 1st-party, privacy-friendly datasets are more valuable. In addition to that, they strengthen the relationship between customer and business, and who wouldn’t want that? 

What are the different types of first-party data?

Includes online and offline data:

-CRM data

-business data

-demographic data

-behavioral data

-location data

-social media data

-voice data

-survey data

In the absence of 3rd-party cookies, obtaining 1st-party data will be of paramount importance.

4. People-based targeting

People-based targeting is a method of advertising that targets users based on the data they provide about themselves when signing up for an account on a website.

It uses a set of criteria such as geographical location, age, marital status, or other demographic variables. The idea is that users who are most likely to engage with your ads have provided this information to you when they signed up. 

  • You need to set up a list of people who should be targeted with this campaign.
  • Then, you need to figure out who is paying attention to your ads that you have assigned to these people. 
  • You then need to determine how much time they spend on your site.
  • You also need to understand what kinds of things they do with your website that is different from the rest of your audience. 

People-based targeting works because you can advertise to people who are interested in the topics you are promoting. Advertising that targets certain demographics and interests of people is called people-based targeting.

For example, if an advertiser is into women’s fashion, they would target their ads to females aged 18-30 who are interested in ladies’ shoes, too. This increases the likelihood of getting clicks.

People-based targeting is largely the handiwork of Facebook. It relies on a unique identifier that is related to the user and not the device. People-based marketing is defined as a system that revolves around customers and their behavior in real-time. Combining this data with 1st-party brand data enables brands to target customers in real-time across devices and channels.

Clearly, this method does not rely on 3rd-party cookies. The focus is more on observing the behavior of identified individuals and meeting them in the places and at times when they are actually willing to participate. 

How Will Email Marketing Be Different Going Forward?

As far as we can estimate, the going away of 3rd-party cookies is not going to majorly impact email marketing. That’s because email marketing does rely more on 1st-hand data. 

Long-time email marketers have understood the need for long-term strategies for building customer profiles and using data more effectively. 

As email is an opt-in channel, data is provided freely by consumers, resulting in a more transparent and privacy-friendly experience. It has a direct-to-consumer model, which means companies can use it to nurture customer relations and deliver customized messaging – a crucial feature in an age without cookies.

Consumers and brands can connect through email. Using your most precious first-party data asset: email, you can do everything from promotions to educational content to retargeting.

In Conclusion: The writing is on the wall. Because of increasing pressures of maintaining an individual’s privacy, the 3rd-party cookie will die, sooner or later. 

If your advertising and marketing strategies rely on such cookies, you might as well start considering alternatives. One of them could be developing your in-house solution to help you better transit from 3rd-party cookies. 

Both Google and the industry are working out alternatives. Till these are finalized, the best thing to do perhaps is to monitor the market developments on this front. 

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