First-party Data Strategies Are Here To Stay, Despite The Google Gaffe

First Party data strategies have been emerging throughout the industry for many years, as a response to the challenge of acquiring meaningful customer data in light of changing privacy landscapes. These new strategies will continue to evolve and grow. I believe First Party data experiences and product-led growth motions are the natural evolution of personalizing and tailoring user web experiences, and Google’s decision to continue with third-party cookies is a moot point. Third-party cookies are already history. After years of pushing back the timeline to deprecate third-party cookies on Chrome, Google announced that it actually will not abandon third-party cookies after all. To understand the significance (and lack thereof) of this moment, we must first look at the origins of the third-party cookie storyline.

The first data cookie was baked in 1994

Cookies were created in 1994 by Netscape as a way to track users visiting a website.  In quick succession, adtech firm DoubleClick realized they could use third-party cookies to track users all over the web, and Google bought DoubleClickin 2008. This spurred an expansion of third-party cookies into every day user web journeys. Google essentially combined its global reach and connections to most brands’ digital properties, alongside a technology offering that allowed those brands to leverage the information they were gathering. Importantly, this approach inextricably tied every marketer to a tight reliance on Google’s platform, because without Google’s technology reconciling the identity and clickstreams of users, brands were unable to gain insight to their customers behaviors, affinities, and intent signals across the open internet.

When the data rights of users surfaced via European GDPR regional laws in May of 2018, the impact on Google was profound. The concept of requiring user consent prior to tracking them had been established. This coincided with Apple’s device restrictions, which immediately resulted in marketers being unable to rely on third-party tracking in general. The entire industry was forced to re-examine the means in which they acquired identity, unified behavior into a trusted profile, and interacted with their prospects and clients. In response to growing public demand and the obvious movement towards a more secure, trusted internet, Google vowed to eliminate their third-party cookie strategy. This was appropriate, as the momentum of awareness was growing, and lawsuits related to violations of user privacy plagued Google for many years. The third-party cookie strategy run by a single technology company had finally been exposed as a threat vector, and Google wisely made the commitment (three times) to deliver a more palatable solution to the industry that would satisfy both everyday people and the privacy regulators that were calling for change. However, this commitment has been reneged. Google in July 2024 has announced via this blog post that third-party cookies will continue to exist in Chrome.

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Google’s Privacy Sandbox blog post raises questions for the industry

In this blog post, Anthony Chavez, VP of Google’s Privacy Sandbox left much to be explained for the advertising industry. In explaining how Google would not deprecate third-party cookies, they propose offering consumers an informed choice for enabling cross-site tracking or not as they browse the web. User choice is critical and must not be understated. That said, the blog post then called out that the company will be consulting with privacy regulators to discuss the feasibility of offering users this informed choice. This leaves the industry to ponder this decision, as most consumers at this point are used to asking apps to not track their data. When presented with the choice, they more often than not will opt out of tracking. So why would that change now, just because we’re talking about a browser instead of an app? In essence, third-party cookies were only effective because they did not give users a choice. By doing so now, the same desire for no tracking will take place,  turning brands towards First Party strategies more than ever.

First-party data strategies have become the new industry standard

Organizations have been investing heavily in First Party data strategies for many years. They’ve configured new APIs to help alleviate previous cookie-dependent methods for measurement, attribution and data processing. They’ve also poured capital into data stewardship responsibilities to ensure compliance on the company’s end and validation of privacy for the consumer. Although the First Party data tranche is growing slowly, it is already beginning to bear fruit. As time moves on and the tranche grows, third-party approaches will disappear into the annals of history. I believe First Party data strategies will only continue to strengthen as more and more technology vendors line up to provide new, compliant features and Privacy Enhancing Technologies (PETs). It appears impractical to count on third-party cookies making a comeback, after all of this investment and innovation steering brands away from Google’s approach. I don’t foresee them wanting to abandon the last five years of groundwork they’ve laid and going back to buying data from brokers. First Party cookies have transformed the industry, and marketers aren’t going to look back.

Data is backing up the power of first-party data strategies for marketers

For the first time in 10 years, the combined spend for Google and Meta slipped beneath 50% on the average across the industry (eMarketer source). This means that First Party data marketing is likely gaining a lot of traction and winning a larger share of marketing budgets. This signals to me that marketers are leaving third-party cookies behind. Even if a brand decides to re-tool their technology environment to accommodate a third-party cookie motion, it’s not guaranteed that the overall market will support that.

If most people opt out of them, the third-party data currency is weak. I can’t see a marketing team investing their time and effort on using this technique. Regardless of the latest Privacy Sandbox announcement, even if Google doesn’t deprecate them, third-party cookies are already history. First Party data strategies are the future.

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