It is no secret that internet users are growing increasingly uneasy about how advertisers track their data on the web: 40% of UK respondents stated they were concerned about how companies use their data. In light of these growing concerns, tech giant Google recently announced a plan for a third-party cookie phase out on its browser, Google Chrome.
The digital marketing industry thrives by delivering relevant target ads to web users. It does this with the help of a massive database of individual data gathered by thousands of companies, primarily through third-party cookies.
Google Chrome accounts for 64.34% of the global market share (as of April 2022), making it the most widely used browser to use first and third-party cookies. According to Google’s current plan, it will have a third-party cookie phase out by 2023. This shift away from third-party cookies has caused major concern amongst marketers and raises questions about how the decision will impact the effectiveness of digital advertising.
This article will cover the following topics:
- What are cookies?
- Why is Google phasing out cookies?
- How will this impact digital marketing?
- How can marketers prepare?
What are cookies?
Cookies are small files sent to your browser by a website you visit. The website uses these files to track personal information about your visit. This data includes the items you click on, the products in your online shopping cart, or even your username and password.
Different kinds of cookies are used for different purposes. For example, session cookies are used when you navigate a website; these cookies disappear once you exit the website. On the other hand, tracking cookies create long-term records of multiple visits to the same site.
While there are many types of cookies, here we’ll focus on first-party and third-party cookies.
First-party cookies
First-party cookies are created and stored directly by the website or domain. These cookies allow brands to deliver a better and more personalised user experience by collecting data such as language settings and login credentials. First-party cookies essentially store all user data from the user’s interaction with your website but can’t access data from other domains.
Third-party cookies
Third-party cookies are created by external domains, i.e., websites other than those you are visiting directly. These domains include advertising and tracking providers. Third-party cookies allow brands to track user behaviour and habits and help marketers make predictions based on this data. These cookies are also used for retargeting and cross-site tracking.
Why is Google phasing out cookies?
Google lists user privacy as the primary reason for third-party cookies to phase out. The firm believes that “People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising.“ With growing global concern on data privacy, Google faced public and regulatory pressure to enhance its commitment to protecting individuals’ data.
In response to rumours about Google developing a new tracking system, Google stated they would not be building "alternate identifiers to track individuals as they browse across the web, nor will we use them in our products."
While Google Chrome isn’t the first web browser to phase out third-party cookies, it is the largest. Apple blocked these cookies from Safari back in 2020, while Mozilla’s Firefox began to phase them out in 2019.
How will this impact digital marketing?
While eliminating third-party cookies will require marketers to rework parts of their advertising strategy, everything will not change. This section will highlight the areas that are likely to be unaffected by Google’s decision.
Conversion Tracking
Paid social conversion and search tags use only first-party cookies. Google will continue to use these first-party cookies, citing them as ‘vital’ in the new privacy-first world. As a result, you will not experience any disruption while tracking standard-click through conversions.
Google Analytics
Google Analytics is a popular tool to capture data about your website’s visitors: it is used by 55.6% of all websites. It uses first-party cookies set via a piece of JavaScript code that you must add to every page that you want to track. Google Analytics sets four cookies automatically and a fifth via opt-in, which relates to sharing data about your web traffic with Google. With Google Analytics, you can track and generate reports for the number of users, session duration, bounce rate, page views and more.
Retargeting
Retargeting using first-party cookies will continue undisrupted. Ads displayed on Google’s search engine results page are targeted using the individuals’ search queries, thus using a Google or first-party cookie.
Similarly, remarketing on Facebook and Instagram will be unaffected as it is based on user data tracked with Meta cookies and doesn’t involve third-party cookies.
How can marketers prepare?
The death of the third-party cookie has generated a lot of nervousness in the marketing community: 41% of marketers feel that the biggest challenge will be tracking the right data.
If your marketing and advertising strategies rely heavily on third-party cookies, you should consider alternative plans that capitalise on first-party data. Ingrid Burton, CMO of Quantcast, said, "Using solutions that utilise first-party data with AI and machine learning will help communicators reach the right person at the right moment.”
What strategies can be implemented?
With every advancement or change in technology, there emerge new solutions. Marketers, advertisers, and data engineers have been actively searching for alternatives to third-party cookies. Google itself advocates its Privacy Sandbox as a replacement for ad targeting.
Google's Privacy Sandbox
Google will not create technology that tracks users at an individual level; however, it will still be investing in alternatives that focus on group behaviour. Its Privacy Sandbox aims to “create a thriving web ecosystem that is respectful of users and private by default.”
The Privacy Sandbox technology works on interest-based advertising using Federated Learning of Cohorts (FLoC): the idea that groups of users with common interests could replace individual identifiers. This data has proven to be nearly as effective as that from third-party cookies. The FLoC approach hides individual data in the crowd and uses on-device processing to keep a user’s web history private on their browser.
By combining functionality with privacy protection, the Privacy Sandbox will not hamper the user experience but instead, make users more confident that their browser is working to safeguard their privacy. At the same time, it will provide an effective solution for advertisers and marketers to generate leads and increase revenue.
What tools can be used?
Optimising your marketing strategy for the post-third-party cookie world can be challenging, but Clear Click is here to help. Clear Click offers a range of services to help your business maximise its interactions with prospective customers using multi-channel insights and strategic consultancy. Our Web Analysts interpret data to calculate the performance of marketing campaigns. This data can help your organic and paid search teams strengthen your advertising efforts.
In the evolving tech space, it’s essential to adapt your advertising strategies, and Clear Click makes this process stress-free! Book a free consultation today to learn more.
