Death of the Cookie: Future of Online Marketing

By Miguel Guerreiro On May 7, 2020

In January 2020, Google announced that its Chrome browser would begin phasing out support for third-party cookies. They were not the first to announce such a move as Apple introduced Intelligent Tracking Prevention (ITP) 1.0, a privacy feature that came with Safari 11, in September 2017.

This new feature blocked third-party cookies by default in Safari and was more of a subtle jab at Google and other AdTech companies than it was a stand on user privacy. Of course, Apple does not depend on advertising solely, so they can be stricter on user privacy. With the release of ITP 2.0 and ITP 2.2, Apple’s stance against third-party cookies continues to strengthen. Firefox also has blocked third-party cookies by default.

What Is Different About Google’s Announcement?

While Safari and Firefox both block third-party cookies by default, the user can turn them on. Google will not have such a feature. Third-party cookies will be blocked with no method of allowing users to turn this feature on.

In addition to the elimination of third-party cookies, factor in that Google Chrome is by far the most popular web browser with an estimated global market share of 62.8%. The closest competitor is Apple’s Safari with a mere 15.8%.

The Distinction Between First-Party and Third-Party Cookies

Before we go much further, let’s first discuss what the difference between first-party and third-party cookies is.

First-party cookies

First-party cookies are cookies set by the domain that you are visiting with their primary focus being on delivering optimal user experience. Examples of a first-party cookie are remembering that you are logged into a system or setting language preferences for that site.

Third-party cookies

Third-party cookies are cookies set by a domain that is not the one that you are visiting right now. These cookies are typically used for advertising purposes. An example of a third-party cookie is how you are now seeing ads for fishing rods after looking at fishing rods online the day before.

We Saw This Coming

For nearly a decade, there has been a lot of talk about the cookie crumbling and that the end is nigh for third-party cookies. While third-party cookies have been essential to advertisers, these little bits of code were only meant as temporary storage and were instantly transformed into a cross-site tracking tool that became the spine of most online advertising models. While Google’s announcement raises a lot of eyebrows and causes a lot of uncertainty, we have seen this coming for a long time.

A Technical View of How Marketing Will Change

Marketers have two options: change the way they market or ignore targeting of ads. The former is risky, but the rewards are well worth the risk. The latter means throwing ads in front of consumers with little to no context of what the consumer is interested in. What sounds like the wild west is actually the way things were years ago where consumers in Alaska would be shown ads for beach umbrellas. While this example is extreme, it portrays what a marketer with no information about their visitors could do.

Companies like Shopify have long flourished on information that cookies can provide, but Shopify saw the writing on the wall and are using web analytics to dictate how consumers are shown personalized ads. Companies have the option to analyze their site traffic to target based on data collected.

Google has provided a Privacy Sandbox billed as being able to “create a thriving web ecosystem that is respectful of users and private by default.” This project feels very theoretical currently, but it hints at only scratching the surface of the privacy problem. They have admitted that third-party cookies are only part of the problem.

Since Google’s announcement on third-party cookies, they have also announced that they plan to ultimately hide the user agent string rendered as part of every web request. The user agent string displays information about the visitor’s browser and operating system allowing marketers to see this information in addition to desktop or mobile platforms being used.

Long has there been talk of Contextual Advertising where the ads on the page actually relate to the content on the page. Contextual advertising scans keywords in the text of the page and renders related ads to that content. When ads are based on the content on the page, that is indeed targeted. If the user is reading a blog post on fishing rods and sees ads for fishing rods, that is relevant.

Contextual ads are cost-effective and have been proved to get the visitor to engage more often. Visitors are also more satisfied seeing ads related to what they are reading. Many personal blogs have been using this method for years already.

Brands also need to start building a first-party data strategy now, if not yesterday. Admittedly, many companies are more challenged than others in figuring out how to build their first-party data strategy. Google’s changes will force a radical change in the core business model for brands.

How Consumers Will Feel in This New World of Marketing

At the end of the day, consumers have been concerned about privacy and how their data is being used. Personalized ads are not the immediate concern that consumers have with privacy. Concerns are around how hackers can steal this data and how the government can use the data for surveillance purposes. There is no guarantee that either of these concerns will be solved in the long term by these changes.

While consumers can enjoy a small win, the ultimate winner is Google. This is an example of the keeper of all of the data is keeping the data to themselves. Google can see what everyone does at all times.

The immediate win that consumers can get out of these changes is that it forces brands to communicate with consumers in a more direct manner which is a win for both sides.

At the end of the day, Google’s announcement to block third-party cookies has marketers reeling. For marketers who cannot keep up, these changes could present large problems. Google at least gave us a two-year warning where Safari and Firefox did not give close to as long when they turned off third-party cookies by default. A lot can change in two years, but that does not mean that we should sit around and wait.

How Can Marketing Professionals Pivot?

Marketers can tap into behavioral data sets to connect what consumers want and drive better engagement. The process involves continuous testing and implementing different data models to ultimately find the data mix that works best

Data-as-a-service (DaaS) vendors can deliver these unique insights, which provides a wider view of shopping behaviors. These insights enable smarter and safer engagements to the right consumer with the right message at the right time.

DaaS organizations analyze and transform the data to deliver solutions that help brands answer questions about their prospects and customers. Access to this type of behavioral data insight can help marketers pivot and remain strong as online marketing changes.