The disappearance of third-party cookies from digital marketing has been a long time coming. The first warning sign was the tightening of consumer privacy through legislation such as GDPR and CCPA. The next warning sounded when Apple declared an end to Facebook tracking across its operating systems and browsers in 2021.
“We will place more and more restrictions on the use of third-party cookies, which are the most common mechanism for cross-site tracking today,” the Google team announced in The Privacy Sandbox.
Although the move was not entirely surprising, the marketing industry saw the sky falling. Without tracking cookies, entire empires would crumble. An all-out Cookiepocalypse! The end of marketing as we know it?
Not so fast. In this handy guide, we’re providing perspective on the (long-overdue) discontinuation of (creepy) third-party cookies. And ways to prepare your relationship marketing infrastructure without being left out in the cold.
The Case Against Third-Party Cookies
It’s a sign of the times that 78% of consumers are concerned about protecting their personal data. And one of the biggest concerns is the resale and sharing of customer data between data marts and advertising vendors. Which is exactly what third-party cookies are built for.
As a quick reminder, the definition of third-party cookies differs significantly from other pieces of tracking code: While first-party cookies are issued and accessible only on a specific domain, third-party cookies are placed by external vendors to track and identify users on many different sites. As a result, consumers are followed by advertising based on their browsing history as they navigate the web, which many find creepy and annoying.
Behind the scenes, third-party cookies are big business. Advertising networks use them to deliver targeted ads to consumers, with ad buyers paying a premium for this tailored service. Facebook Pixel works in the same way, although not connected to users’ ad network profiles but the social network’s registry.
Much of this will go away. Putting an end to external audience tracking, Google announced a shift to “privacy-preserving technologies”. These technologies aim to deliver personalized engagement without exposing users to resale and exploitation of their private data.
While more privacy and data protection practices are long overdue, the disruptive impact on digital marketing will be significant. Now is a good time to prepare for these Three Likely Consequences of the Cookiepocalypse:
1. Shift towards owned consumer data
As the first response to the disappearance of third-party cookies, 60.4% of data professionals announced that they will increase spending on first-party data. This is the type of data collected by brands across their owned websites, often via first-party cookies. Data sets include customer behavior, name, email ID, and purchase history.
The focus will also shift to zero-party data. This is the data provided by users themselves, handed over willingly and with consent. Often collected in return for discounts or promotional perks, zero-party data includes detailed information such as street address, age, and social media activity.
While both types of owned data are strictly not for resale, they offer rich opportunities for personalized engagement, if brands possess the right technology to add identification and meaning, that is. Brands and marketers should look at this shift away from third-party cookies as more than simply complying to data privacy regulations. It’s an opportunity to leverage your owned data and strengthen the bond you have with your customers; not only by protecting their privacy, but by offering them more relevant and meaningful customer experiences.
2. Adding identification and meaning to owned data
When companies can no longer install ad network codes to collect user data on a third-party website, one fundamental feature is under threat: identity resolution, meaning the ability to match consumer identities to tracking codes and profiles.
As a direct response, 35.9% of professionals are willing to develop in-house identity resolution solutions to make what they can out of first-party data. Another 34% of marketers wants to increase contextual advertising to match intent and interest with ad delivery.
On the backend, this kind of contextual, intent-based targeting will require significant computing power. It will further increase the relevance of marketing-specific AI engines, trained to automatically create journeys and offers for identified and unidentified users based on the content they consume and their navigation across the web.
3. Rise of monopolies?
Make no mistake, the end of third-party cookies is not the end of behavioral tracking across the web. Although Google announced that it will refrain from building “alternative identifiers” to track individual data, experts see some kind of tracking on the horizon.
In reality, purging third-party code may also strengthen Google’s monopoly. The company owns a huge sandbox on the web, and with third-party tracking out the window, marketers looking to serve personalized engagement have to pay to play in it.
The same goes for Facebook, which will take a major hit by losing Pixel tracking on external sites, but still analyzes – and monetizes – every move on its owned apps and websites. Other players are moving into the advertising space with massive vaults of first-party data, most notably Amazon and Apple.
The latter already banned third-party cookies from Safari browsers two years ago, but owns some of the world’s most complete user profiles, including biometric and fitness data from Apple Watch. So Apple’s move into advertising is not an if, but a when.
Marketing in a Post-Cookie World
With that said, digital marketing is headed for seismic shifts. The major players will keep tracking consumers on their properties. Meanwhile, advertising networks and especially mid-to-small-sized players are headed for disruption of their business models over the coming months.
As a first step, now is the time to analyze which advertising partners will still offer viable business models after the shift.
Another segment headed for disruption is conversion tracking. With external tracking cookies going the way of the dodo, the focus will shift to purchase tracking solutions based on first-party data, such as S2S (server-to-server) postbacks.
But no need to rush!
Experts predict the end of third-party cookies in Google Chrome for the middle of 2022. So there is still time for new technologies to emerge. With that said, 32.1% of professionals will increase their investment in new solutions, whatever these may look like.
Watch this space for updates on the Cookiepocalypse – and strategies to make the most of your first-party data – as we learn more about how the cookie crumbles...