The digital advertising industry is undergoing a huge shift right now. Before we know it, the deprecation of third-party cookies will be completed.
To deliver success in 2022 and beyond, we need to start thinking about targeting and measurement without third-party cookies. Before we get there, it’s best to understand what is going on. We’ve gathered all the details about third-party cookies here so you can know what they are, what’s happening to them, and what to do.
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What are third-party cookies?
Third-party cookies are tracking codes or pixels that are placed on a website visitor’s browser. When a website visitor comes to your site and others, the third-party cookie tracks information and sends it to the creator of the cookie—which might be you as a marketer through your demand-side platform or data management platform.
As a marketer, the third-party cookie data allows you to better understand your website’s visitors and their behaviors, such as websites they visit, recent purchases, and interests shown through browsing, which enables data targeting and visitor insights.
With third-party cookies being placed in a visitor’s browser automatically, there has been a push to change industry standards and grant more privacy and control over consumer data.
What is happening to third-party cookies?
If you’ve followed any advertising industry news, the topic of the end of third-party cookies isn’t new.
In February of 2020, Google announced the phase-out of third-party cookies and gave initial reasoning for the pivot. Google explained that this move helps protect users who asked for more privacy. It’s also important to note that Firefox and Safari had already phased out the third-party cookie months before as well. Google’s statement said that these changes would happen over several years, allowing the industry to prepare and ensure that this pivot didn’t destroy the online advertising business overnight. The phase-out of third-party cookies for Chrome is currently planned to take place over the second half of 2023.
This timeline is a big deal. Even though other browsers have already blocked third-party cookies, Google Chrome makes up 56% of the web browser market in the United States and accounts for more than half of all global web traffic.
Cookieless targeting alternatives
Having a plan of action for changes means having options and diverse sources of targeting capabilities. Alternatives to third-party cookies enable advertisers and publishers to target users with ID solutions and contextual targeting rather than data provided by third-party cookies.
Within the advertising landscape, there can be a huge disadvantage for smaller publishers who don’t collect enough data to make their ad inventory valuable compared to other larger publishers. Third-party cookies have helped these smaller sites access more user data which they can then pass on to advertisers to create more value. Cookieless solutions, in addition to Google’s Privacy Sandbox, largely aim to replicate targeting capabilities without using cookies, while rethinking the position of user privacy.
Here are some immediate options for highly targeted and cookieless campaigns:
Connected TV (CTV)
Connected TV has never relied on cookies and is poised to reap the benefits of the current state of digital uncertainty. With 82% of households in the US streaming CTV, a media option capable of delivering effective ad targeting—without cookies—has become more valuable than ever. Personalization in the CTV landscape is still possible with device IDs based on proprietary or first-party data. Viewers trust TV as a medium, making CTV both rich in data and a source of premium inventory.
Amazon and contextual targeting
Buying ads with Amazon provides a direct buying path into exclusive inventory and data. When buying directly from an exclusive source, like Amazon, there will be fewer supply fees and intermediary brokers, which means faster results with more money in your pocket. Access Amazon’s supply of ultra-detailed global audience data exclusively through their platform.
First-party data
First-party cookies can be used to track users in the same way third-party cookies can, in specific contexts. Using your own data makes it easier for you to serve your campaigns to precise audiences multiple times. Data also shows that brands with more digital touchpoints are more likely to create conversions with customers.
Upcoming cookieless solutions
The announcement of Google depreciating third-party cookies on their browser has prompted a wide variety of solutions that could “replace” third-party cookies from industry leaders. These include:
Universal IDs: Universal IDs: Universal and Unified IDs are solutions provided by LiveRamp and The Trade Desk, they provide a common identifier for users on desktop and mobile web. This identifier, most likely to be an email address, can be used by any vendor in the ad tech industry in a privacy-safe way. Learn more about Unified IDs here.
Publisher first-party data:Since digital advertising powers many publishers, we should see that publishers’ first-party data will become increasingly more valuable as third-party cookies phase-out. Publishers able to activate first-party data, like email lists, on their inventory will leverage this information to help advertisers target their audiences. Learn more about publisher first-party data here.
The Privacy Sandbox: The Privacy Sandbox is a Google-backed project with the focus of “creating a thriving web ecosystem that is respectful of users and private by default.” As of now, there isn’t a concrete solution for replacing third-party cookies. Google plans to do global testing for the Topics API. They are focused on making Topics easier to recognize and manage for users. Learn more about the Topics API for the Privacy Sandbox here.
Project Rearc: Spearheaded by the IAB, IAB Tech Lab, governmental, and other industry and consumer focused organizations, Project Rearc aims to re-architect digital marketing in a way that balances privacy and personalization. Learn more about Project Rearc here.
So why are third-party cookies going away?
With the passage of GDPR, CCPA, and more attention on privacy protection, it shouldn’t come as a surprise that consumers want better understanding and transparency into data collection methods.
Also, these changes are planned to happen soon as third-party data was already weakened by Safari and Firefox’s deprecation of cookies. As the industry continues to grow, marketers are increasingly focused on building trust with consumers.
The hope is that by ending the support of third-party cookies the industry will be ushered forward toward solutions that will provide users with greater transparency and privacy management tools.
What is the impact of third-party cookies on digital advertising?
First things first, don’t panic.
At this point, marketers, advertisers, and data engineers alike are actively looking for solutions to determine what will happen next. Right now, the best thing to do as a marketer is to continue to stay up-to-date with news related to third-party cookies and other data privacy moves that could impact your marketing strategy.
Checklist on what to do about third-party cookies
So, now what? The disappearance of third-party cookies doesn’t mean an end to targeting and measurement; it just means what and how we target and measure will change. And that’s okay.
Here are a few things you can do now to prepare:
- Own your own data. Now more than ever, it is increasingly important to invest in ownership and mastery of your first-party customer data. Getting there means you need to build processes to collect customer data and consent from your customers and prospects.
- Contextual targeting. Just because third-party cookies are going away doesn’t mean you can throw out your targeting strategy. Contextual targeting like keyword, site, or category targeting can ensure you’re reaching users who are actively engaging with content tied to your brand.
- Alignment to partners. Now is the time to start asking questions from your partners to ensure you are in the best position moving forward. A few questions to ask are: how are they preparing for the end of third-party cookies, what types of targeting tactics are available, do they use AI or data science to collect targeting data, and how do they handle data privacy.
It’s a lot to navigate, but the phase-out of third-party cookies will eventually be a boon to the digital advertising industry. We’re well prepared already—now we just need to evolve our marketing tech stack to reflect the opportunities of this new era!
