How to Prepare for a Cookieless Future: Everything You Need to Know
Google’s announcement that it will remove third-party cookies from its Chrome browser has sent both marketers, and the wider advertising industry, into a state of flux.
But what does the change really mean on the ground? And how do you successfully navigate the disruption and set yourself up for marketing success in a cookieless future?
Here we take a look at everything you need to know including:
- What’s the difference between first-party cookies and third-party cookies?
- How are cookies being used right now?
- Why are cookies going away?
- How will the removal of cookies impact marketing?
- Updated timeline from Google on removal of third-party cookies
- Overview of Google’s proposed replacement solutions
- 6 steps to get prepared for the cookieless future
First-party cookies vs. third-party cookies. What‘s the difference?
Before we dive into a look at the difference between first and third-party cookies let’s start with a definition of cookies themselves.
What is a cookie?
Cookies are small text files that are placed on your computer by websites that you visit. That are used to track user behaviour and store small pieces of data about you that enable your web browsing experience to be personalised in some way.
The difference between first and third-party cookies
First and third-party cookies have broadly the same purpose but they function in slightly different ways as shown below:
- First-party cookies – this type of cookie is directly stored by the website you are visiting and track you on that site only. The key focus of this type of cookie is generating first-party data and remembering your basic activity on the site. Like recording sessions and remembering preferences like language settings or preferred locations etc.
- Third-party cookies – are different in that they are created by domains that are not the website that you are visiting. And this type of cookie is accessible on any website that loads the 3rd party servers’ code (the mechanism that enables advertising channel networks to gather behavioural data to provide targeted advertising opportunities).
This second type of cookie has fuelled concerns around privacy and security which have both been contributing factors to its impending demise. And hastened the arrival of a cookieless future.
How are cookies used in marketing?
Cookies have been the tracks that digital marketing has run on for almost as long as the internet has been around. Particularly in a commercial sense.
They have been used to track and personalise customer journeys in a number of ways including:
- Profiling individuals – for example, identifying if you are the right profile of person to see an ad
- Retargeting of adverts – based on behaviours identified from user journey data that give an indication of your propensity to buy and product interests
- Audience development – developing ‘look-alike audiences’ for better targeted marketing activity
At face value then, cookies have a number of positive uses in marketing terms.
So, why are cookies going away?
While much of the current noise around the end of third-party cookies centres around Google’s recent high-profile decision to call time on cookies, the story of their demise is part of a broader trend towards increased user privacy.
As far back as 2017 Apple introduced Intelligent Tracking prevention (ITP) 1.0 to help protect online privacy in their Safari web browser. From there it has been death by a thousand cuts for tracking and third-party cookies, in particular, as shown in the diagram below:
The reasons behind these decisions are manifold but some of the main ones include:
- Privacy worries – the concerns of consumers and privacy activists who have been calling for more transparency around tracking and data use have certainly contributed. In fact, the Pew institute report that 81% of consumers now think the potential issues of personal data collection now outweigh the benefits.
- Security concerns – the reality is that cookies also present security risks that range from the potential for data breaches to possible hijacking of log-in credentials
- Legal changes – legislation including GDPR, the ePrivacy Directive and CCPA have targeted how brands and advertisers can gain consent via cookies and process data for marketing purposes
- High profile investigations – there is little doubt that investigations like the one by the Irish Data Protection Commission (IDPC) into Google’s online advertising approach are a also potentially a factor
How will the removal of cookies impact marketing?
QueryClick’s Performance Marketing Trends report uncovered that 34% of marketers thought that the removal of third-party cookies would have a negative impact on their business (for the record, we are firmly in the camp of the 44% of marketers who think that the change will have a positive impact on their business!).
And joint research by GetApp and Hubspot reported that 44% of marketers said they would have to increase marketing spend by a factor of 5 to achieve the same goals in 2022 as they did in 2021.
The flip side of this, however, is data from LiveRamp and Censuswide that suggests that as many as 78% of UK Senior Marketers believe removing cookies will have a positive impact on advertising strategies.
So, opinions differ. But what is a cookieless future going to mean for marketers? We think it will have a number of impacts for marketers including:
- Dwindling access to third-party audiences – it is inevitable that the size of 3rd party audiences which rely on cookies for data collection will decline
- Targeting will be affected – the ability to deliver personalised advertising experiences will be hampered, with remarketing significantly affected
- An increased focus on first-party data – the changes will place an even bigger premium on having access to high quality first-party data
- Forcing a review of analytics solutions – the situation is only adding momentum to the quest by many marketers to find an analytics solution suited to the post-cookie landscape
Updated timeline from Google on removal of third-party cookies
So where are we in terms of the timeline for cookies disappearing from the marketing landscape?
This has been something of a moveable feast and the timeline relies heavily on having alternative solutions in place before third-party cookies are finally switched off. And teething problems including the rejection by the industry of their initial FLoC (Federated Learning of Cohorts) proposals has delayed things.
The original plan from Google was to have a replacement solution in place for Q4 2022. However, last year the timeline was pushed out to 2023 and more recently this was extended to the second half of 2024.
The current timeline as we ‘go to press’ looks something like this:
There are a number of solutions in the area of Showing Relevant Content and Measurement in Origin Trials including:
- the Topics API – an interest-based advertising solution which replaces FLoC
- FLEDGE API – an on-device auction to serve remarketing and custom audiences
- Infrastructure APIs – including First-party Sets, Shared Storage, CHIPS and Fenced Frames
But it has been subject to change so check back regularly!
What solutions are there for the cookieless future?
So, what are the key solutions being proposed by Google as replacements for a cookieless future and how do they stack up?
- Topics API – Topics is a browser-based system designed for prospecting by allowing high-level targeting on an interest or topic basis. Initial thoughts are that a restriction of only 350 Topics, taken from a list of several thousands on the IAB content taxonomy, will limit targeting (see the example below where a specialist provider of Single Origin Coffee would be bidding against the broad category Food and Drink). There is also concern it could drive up ad costs due to greater competition for a limited inventory
- FLEDGE API – FLEDGE is the current proposal for retargeting (alongside the use of Google Signals). Based on browser-level interactions, users are able to join an ad interest group and advertisers are able to serve ads based on the interactions. A possible limitation is the fact that Chrome users are going to have to ‘opt-in’ for these ads and similar sign-up on Apple has been low
- Attribution API – the API currently offers event- level and aggregate reporting but neither app to web or cross device reporting is in trial. Data for event and aggregate reporting is also processed on the individual browser which means it is unable to attribute anything other than single browser conversion paths (which we know are less than 20% of all such paths)
6 steps to get prepared for the cookieless future
So how to prepare for a cookieless future – in a way not only takes account of the death of third-party cookies but the continuing knock-on effect of Apple’s iOS 14 update (and Google’s announcement that they are likely to follow suit within 2 years in the Android app ecosystem)?
We think there are 6 priorities:
- Maximise the value in your first-party data – ensure you focus in on releasing the potential in your first-party data which is actually preferable and can open up a wealth of personalisation opportunities.
- Cleanse and rebuild your broken data – while much of the debate has been around the fact that cookies are going away there has been less air-time for the bigger elephant in the room. Cookies actually to a pretty poor job (and that includes First-party Cookies too) of ‘stitching’ together the true picture behind increasingly complex customer journey. In fact, our own work with clients – using AI and Machine Learning techniques to effectively replace cookies – consistently shows that 80% of cookie generated data is wrongly attributed in the customer journey.
- Explore the power of context plus data – In a world with less Third-party cookies, context becomes even more important than before. Contextual targeting already exists but integrating it into your campaigns now is going to let you test and steal a march on the competition.
- Keep an eye on the emerging solutions at Google – despite early challenges with the solutions being proposed in the Privacy Sandbox Initiative, it is important to keep tabs on developments in the likes of the Topic, FLEDGE and REPORTING APIs in particular
- Do all of this in a compliant manner – the removal of Third-party cookies is only one side of the issue. It is equally important that you are on the right side of the compliance equation too. So, revisit all aspects of cookie opt-ins and opt-outs and make sure your data policies are onside
- Futureproof your analytics – this is a watershed moment in terms of how you measure the effectiveness of your marketing activity and preparing for a cookieless world. And you need to find a solution that provides you with cookieless attribution that is fit for a cookieless future
Is cookie-free attribution a myth?
As marketers, we’ve relied on cookies as the trusted foundation for our analytics for decades. So, how do we transition to a new method of measurement in a cookieless future – and can true cookie-free attribution really be achieved?
Download the eBook to discover:
- The main reason cookies are flawed
- How to fix your 80% broken data
- Our unique patented technology – and how it completely replaces the cookie
Is Cookie-Free Attribution a Myth?
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