fbpx The Death of the Third-Party Cookies: What Do You Need to Know?

Industry Update

The Death of the Third-Party Cookies: What Do You Need to Know?

Though the death of third-party cookies was inevitable, Google’s decision to phase it out by 2023 shocked marketers and advertisers. Cookies facilitate the growth and success of marketing and sales strategies on the internet.   

Tim Absalikov

Guest writer

Though the death of third-party cookies was inevitable, Google’s decision to phase it out by 2023 shocked marketers and advertisers. Cookies facilitate the growth and success of marketing and sales strategies on the internet. 

With traditional marketing in the physical world, marketers rarely know how many people have interacted with their ads. Internet cookies allowed marketers to gain insight into online user behavior, including when they visited a site and their interests.

Therefore, marketers can deliver relevant and targeted ads to users instead of displaying generic ads. With targeted ads, conversion rates are better. Do you see why marketers and advertisers wouldn’t want third parties gone? 

First and third-party cookies explained

Cookies are small files containing information like usernames and passwords. Cookie data is created when a server connection is established and contains a unique ID to your computer and network. On your subsequent internet use, the server reads the ID and determines the information to display. 

There are two types of cookies marketers use:

  • First-party cookies
  • Third-party cookies

First-party cookies are generated and stored by default within the website you visit. The cookie is used to offer a better user experience and is stores passwords, basic user data, and preferences. Using the first-party cookie, marketers learn about your behavior on their site and develop marketing strategies around this information. However, they can’t see user behavior on websites besides their own.

Because of first-party cookies, e-commerce platforms remember login information, user-preferred languages, items in user carts, and more.

Third-party cookies are simply tracking codes created by a third party to track user behavior across the internet. With this data, they can create visitor profiles for retargeting. 

Why are third-party cookies being phased out?

Although third-party cookies are important in marketing and law firm advertising, internet users have raised concerns regarding privacy violations. In 2019, Pew Research Center reported that 72% of Americans felt that technology firms, advertisers, and most businesses track their online activities. Their anxiety around data privacy led lawmakers and big tech companies to act. 

Even before a complete third-party phase-out, lawmakers already effected new privacy regulations. EU’s GDPR (General Data Protection Regulation) states that internet users should consent to site cookies. These prevent automatic opt-ins to site cookies during their visit. 

Also, California Consumer Privacy Act (CCPA) protects California residents’ personal information, including cookie collection. Under these regulations, California residents can reject having their online information sold to third-party companies. They can also request the disclosure of data third parties have already collected and even request deletion of some data.

Who gains and loses from the death of cookies?

When Google announced its intention to phase out third-party cookies, it introduced the Privacy Sandbox. Privacy Sandbox will include a set of tools that’ll allow advertisers to create targeted ads without direct access to user data.

Because of this, Google stands to gain the most from the death of cookies. Without third-party cookies on Chrome, advertisers will be forced to use first-party data on Google under defined parameters. Eventually, Google will cement its position in the digital marketing space.

Also, large marketing and advertising companies that already have ad targeting created from first-party data will benefit. With the data, they can cut direct ad deals with different brands. 

Overall, brands without access to first-party data or a direct relationship with clients will lose the most. However, there’s still time to prepare for the coming shift. 

How the death of cookies will impact a business’ relationship with its consumers

Some businesses heavily dependent on digital marketing condemn the privacy changes. Small players with minimal targeting knowledge and access to data will have a harder time adjusting. Although the death of cookies was postponed to 2023, a more transparent digital marketing ecosystem is inevitable. 

Consumer tracking and intrusive consumer ads aren’t good for business as they undermine trust and deliver irrelevant content. In the long run, marketers and advertisers deliver inefficient ads that provide personalized advertising. 

To improve marketing efficiency, brands shouldn’t get complacent following the delayed third-party cookie death. The days of uncontrolled ad targeting and tracking are over, so sticking to your old ways of marketing will be a major disservice to your business. 

 

Death cookies: What can advertisers and publishers do now?

A forward-thinking publisher and advertiser will shift their ad strategies from relying on cookies to implementing alternative solutions. The options in the cookieless future include using first-party data. Basing your ad strategy on first-party data will require you to request your audience for information. 

As you request this information, give them a way of learning and understanding why you ask to collect their data. 

Aside from this, brands can get into contextual advertising as a complement or alternative to third-party advertising strategies. Through contextual ads, brands will reach their target customers in the context of online experiences.

Publishers can jump onto contextual advertising by categorizing their content into broad categories like travel and sports. They can then expose these categories to brands within their respective niches for retargeting without cookies.

Alternatives to third party cookies

The death of third-party cookies is inevitable, but there are alternatives to help. So far, we’ve mentioned a couple, including: 

  • Google’s Privacy Sandbox
  • Contextual advertising
  • First-party data collection

Instead of using third-party cookies to collect user information, Google’s Privacy Sandbox used the Federated Learning of Cohorts (FLoC). FLoC analyses a user’s online activity within the Chrome browser. But at the start of 2022, Google did away with FLoC and leveraged Google Topics instead. Topics is still cohort-based, but it leverages a few hundred instead of several hundred categories. 

One we haven’t touched on is the Universal ID. Unified ID 2.0 promotes the establishment of a unique ID for each user. This solution preserves a marketer’s ability to run relevant and targeted ads while offering the user more control. 

The technology uses sign-on to collect email addresses when users visit an app or site with UID 2.0. it addresses third party cookie concerns by:

  • Offering anonymity – the emails are anonymized and can’t be mapped back to their respective emails
  • Gives users control – users can monitor and adjust ID use and the advertisers it’s shared with
  • Offers more transparency – publishers openly explain data exchange to users

Despite the industry backing this alternative, universal IDs require users to provide their emails, which isn’t always easy. 

Conclusion

Like it or not, third-party cookies are going – this isn’t something you should fear. Instead, publishers and advertisers should prepare for the shift by moving away from behavioral targeting and embracing alternatives. 

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