The phasing out of cookies has been a major shift in the marketing world, causing significant changes. Find out more
In the fast-paced world of digital media and advertising, keeping up with trends and major changes is necessary to stay ahead of competition. One significant change that's been creating a seismic shift across the marketing landscape for some time is the deprecation of cookies. This article will explore the reasons behind this transformation, its implications for marketers, and strategies to help you navigate these changes.
Before diving into the intricacies of third-party cookie changes, it's essential to understand the distinction between first and third-party cookies.
It's all about website domains. Cookies are tied to a specific website, or domain, and won't work on a different website.
First-party cookies are tied to the website that you are currently browsing, they are set in a first-party context. So, if you visit "loophorizon.com", it can give you first-party cookies that are only meant to be used when you go back to "loophorizon.com" later.
Third-party cookies are tied to a domain different to the website you are currently browsing‚ they are set in a third-party context. Imagine you're on "loophorizon.com", and it sets a cookie from "anotherwebsite.com" (because we have set a script from a third-party advertiser on our website). As you visit other websites, if they also have scripts that can set and read cookies from "anotherwebsite.com" you can be tracked and targeted as you navigate around the web.
This is the principle of how third-party cookie-based advertising works; maintaining a large network of tags deployed all over the web to allow behavioural data to be tracked and advertising to be targeted to users who fit specific profiles.
The gradual decline of cookies is a response to a complex interplay of factors. From privacy regulations to shifts in tech giants' approaches, the marketing landscape is undergoing a profound transformation:
Concerns regarding user privacy have resulted in the implementation of strict privacy regulations like the General Data Protection Regulation (GDPR) and ePrivacy Directive in Europe, and the California Consumer Privacy Act (CCPA) in the USA. As a result, users now have greater control over their personal data and a much better understanding of the technologies at play, which affects the use and coverage of cookies.
Major tech companies have recognised and started prioritising user privacy. For instance, browsers like Safari and Firefox have already blocked third-party cookies and heavily restrict the use of first-party cookies. These browsers (particularly Safari) have sufficient market share to drive the overall direction of browser development, culminating in Google Chrome (the most utilised browser globally) phasing out third-party cookies starting midway through 2024.
Many users are dissatisfied with intrusive ads, as seen with the increasing popularity of ad-blocking software. Such software often blocks third-party cookies, restricts first-party cookies, and impacts technologies which rely on first and third-party cookies. As a result, cookies are becoming less and less effective, and less reliable as a result.
With third-party cookies on the way out, and first-party cookies heavily impacted, any marketing strategies which rely heavily upon third-party cookies for delivering targeted ads will become increasingly ineffective. The pace of this trend will only increase as third-party cookies are phased out in Google Chrome.
Tools which rely on first-party cookies will also become less effective as the life-span of these cookies is increasingly restricted, and as the ability to pass these cookie identifiers from one owned platform to the next is reduced. For example, the ability to understand behaviour from a single a user over time in Google Analytics, or to maintain a user within the same AB test group from one visit to the next, will be reduced as first-party cookies become more restricted and less reliable.
We conducted an audit of FTSE250 companies and discovered that over 50% are heavily dependent on technologies that rely on cookies, with 25% loading more than thirty separate tagging technologies. Furthermore, the majority of companies surveyed did not adhere to regulatory standards, many seemingly in error, but with others apparently trying to bypass or ignore the regulations; we can only assume because of reliance on cookies for revenue generation.
Marketers must adapt to the new cookieless environment as cookies are phased out. It's crucial to adopt new strategies proactively. So, how do you steer your organisation in the right direction?
Shifting towards a first-party data strategy will be crucial. Start with an ID resolution program to collect user identifiers against your first-party digital behavioural data and maintain consistent user identifiers in your offline data sets; enabling the ability to join multiple data sets together and model the data to find high-value groups; and the ability to import these models into the various demand-side platforms for orchestration. This is a fundamentally different approach to digital marketing, one that does not rely on third-party cookies at all.
To support your first-party data strategy, you can enhance the persistence of your first-party cookies to allow a greater proportion of your digital behavioural data to be utilised. The situation is constantly changing, but at present for Safari, HTTPOnly first-party cookies which are set from the same IP range as the main website domain will retain their desired persistence.
While third-party cookies may be fading, third-party data purchase and data clean rooms are emerging as potential alternatives. Collaborating with trusted partners to share data in secure environments can help maintain effective targeting while respecting user privacy.
Looking ahead, initiatives like Google's Privacy Sandbox aim to provide privacy-conscious alternatives for digital advertising.
Technologies such as AI can be used to create virtual sessions and user profiles based on anonymised event-level data without the need for cookies or create aggregated segments for marketers to target against that do not require identifying individual users.
Instead of relying on cookies, marketers may shift towards contextual advertising; placing ads along-side content that matches the context of the ad, regardless of the individual user's history.
Obtaining explicit user consent for data collection and personalised advertising, using data which a customer intentionally and proactively shares with a brand. It can include preference centre data, purchase intentions, personal context, and how the individual wants the brand to recognise them.
In today's digital landscape, adapting to change is not just a choice; it's a necessity. The phase-out of cookies presents both challenges and opportunities for marketers.
For any of the above recommendations, the aim is not to get around regulations or circumvent user consent choices. The aim is to be able to advertise effectively while meeting regulatory requirements and honouring user consent choices.
We firmly believe that proactively embracing privacy and getting ahead of the curve is a competitive advantage. Businesses can navigate these changes by migrating to first-party strategies, embracing emerging technologies, and respecting user privacy.
Are you ready to dive deeper into the world of cookieless advertising? Watch our webinar, where industry experts will delve into the strategies and tactics essential for thriving in the digital marketing era. Take advantage of this opportunity to gain valuable insights and stay ahead of the curve. Watch Now.