Someone took all the cookies!
Well, sort of.
In 2020, Google announced that it will block third-party cookies from Chrome by 2023.
What’s the impact to marketers and advertisers?
For starters, some of the most effective digital advertising targeting methods won’t survive limitations across third-party cookies, or at the very least, will be greatly impacted. Advertisers will lose the ability to use third-party cookies to track users’ activities across the web. Behavioral targeting will arguably be the biggest casualty. Conversion tracking will be limited as well. Overall, limiting access to third-party cookies will ripple out to many forms of digital marketing, including programmatic advertising, the automated practice of buying and selling ad space, which will likely become more difficult and expensive.
Marketing and advertising professionals will have to reimagine their targeting strategies. With impending limitations across third-party data, advertisers will need to leverage CRM (Customer Relationship Management) platforms and other first-party data sources to gain insights into audience preferences, interests and habits. First-party data is widely underutilized, but offers valuable information that can be effectively applied to campaign strategy.
Why is Google’s Chrome cookie-blocking update significant?
As of December 2021, Chrome holds roughly 64% of the browser market share globally and has been the most popular browser in the United States since 2013.
Why would the leading browser make the decision to block third-party cookies? It comes down to trust. David Temkin, Google’s Director of Product Management, Ads Privacy and Trust, reasons that “if digital advertising doesn’t evolve to address the growing concerns people have about their privacy and how their personal identity is being used, it risks the future of the free and open web.” 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits, according to a study by Pew Research Center. Looking ahead, Google’s web products will be powered by “privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers.”
Google acknowledges that blocking cookies without a way to deliver relevant ads significantly reduces publishers’ primary means of funding which jeopardizes the future of the vibrant web. To combat this, Google is testing a privacy sandbox – a secure environment for personalization that protects user privacy by aggregating user information into groups rather than the individual. This would protect anonymity while still delivering results for advertisers and publishers.
The privacy sandbox has three goals, 1) build new technology to keep your information private, 2) enable publishers and developers to keep online content free, 3) collaborate with the industry to build new internet privacy standards. Google also aims to prevent techniques like fingerprinting, which uses tiny bits of information that vary between users, such as what device they have or what fonts they have installed to generate a unique identifier which can then be used to match a user across websites. The concern here is that (unlike cookies) users can’t clear the fingerprint and therefore can’t control how their information is collected.
What about second-party data and programmatic?
Second-party data from ad partners like Facebook (page likes, interest-based, etc.) and LinkedIn (industry, job title, etc.) are still available. The impacts of Apple’s iOS updates, which prompt all iPhone users to expressly provide apps with permission to track their data (opt-in vs. opt-out) should be acknowledged. Although there are some constraints marketers should consider, the available data can be applied directly and used to build lookalike audiences.
Programmatic – Response Labs’ partner, The Trade Desk, is focusing on striking a balance between consumer privacy and relevant advertising by launching Solimar. One of Solimar’s capabilities is the ability to securely onboard advertiser first-party data. Other major first-party data owners are increasingly making their data available to advertisers in the Solimar marketplace.
How can marketers market in a cookieless world?
First-party data is more important than ever. Marketers and advertisers will need to evaluate just how reliant they are on third-party data. Developing a more disciplined CRM strategy will be critical to growing and nurturing first-party data. Marketers must ask themselves:
- What strategies do we have to grow our first-party data?
- Is my targeting strategy reaching a relevant audience?
- Are we yielding strong conversion rates?
Marketers don’t need third-party cookies to grow their first-party data
Yes, third-party cookies have been deliciously effective. But first-party data can be even more effective. Advertisers will still be able to build lookalike audiences from CRMs and first-party data, which will allow them to maintain impactful scale and reach with their campaigns. Lookalike audiences are arguably more qualified, as the data used to identify lookalike audiences comes from the customers themselves. The more first-party data you have, the larger the lookalike audience can be built.
With limitations on third-party data, marketers can support the growth of first-party data by using second-party data, programmatic advertising and lookalike audiences from all three. Lookalike audiences from first-party, second-party and programmatic data will support top-of-the-funnel efforts, ensuring that you’re able to cast a wide enough net and successfully generate awareness of your brand.
Pixel-based retargeting, which relies on first-party cookies, can also generate high volumes of traffic to your website, and creates a robust audience from which advertisers can retarget.
So, a “cookieless” world isn’t as scary as it might seem.
As long as marketers continue to use their data in smart ways, they can effectively mitigate limitations on third-party cookies and run successful paid media campaigns. There are lots of ways we can ensure we get the most value from our marketing campaign dollars, but to start, let’s focus on three strategic pillars:
1) Employ a diversified media mix with a cross-funnel and cross-channel approach.
2) Enhance analytics and attribution capabilities.
3) Emphasize testing for progressive profiling and a customer-centric approach.
There you have it: the cookieless future isn’t so bleak. It’s ripe with opportunities to become better data stewards and digital marketers.