Do you know that in 2020, Apple’s web browser Safari started blocking third-party cookies by default? Did you feel the effect? Did your conversion rates drop, and did remarketing become less effective? According to data.gov.au/site-usage, Safari owns 9.7% of Australia’s browser market so you should have felt some rumblings.
In March 2021, Google announced its plans to stop using tracking cookies on its Chrome browser by 2022. What’s made this so interesting is that, despite the fact that we’ve been here before with Safari and survived the rumblings, because Chrome owns 71% of Australia’s browser market, advertisers are bracing for a full-on earthquake.
What are third-party cookies?
Wikipedia, “A cookie is a small piece of data stored on the user’s computer by the web browser while browsing a website. Cookies were designed to be a reliable mechanism for websites to remember stateful information or to record the user’s browsing activity.”
In short, a third-party cookie is one that’s placed on your computer from a website that isn’t the one you are visiting.
I bet you use Facebook and Google Ads to advertise your products and services. If you are, you are likely using their tags to track the effectiveness of your advertising and initiate remarketing on these platforms. I bet you also understand the effectiveness of remarketing, whether that be display or in search. Third-party cookies are the technology that currently makes this possible, and they’re the ones being retired.
Why is marketing moving away from third-party cookies?
According to a study by Pew Research Center, 72% of consumers feel that almost all they do online is being tracked by advertisers, technology firms or other companies. 81% say the potential risks of misusing data outweigh the benefits. According to Google, searches for ‘online privacy’ increased by over 50% YOY globally in 2020.
This kind of negative sentiment has been brewing worldwide, leading to pressure from Internet users and regulators to reign in the use of third-party cookies. In 2019, Europe’s highest court dusted off their lasso. It ruled that, rather than letting visitors know that they were accepting cookies as they’d done before, sites had to allow visitors to actively consent to it.
What will replace third-party cookies?
While measures are being taken by the industry at large to create third-party cookie alternatives, in a statement made in March of this year, David Temkin, Direct of Product Management, Ads Privacy and Trust for Google, said,
“Today, we’re making explicit that once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products”.
Instead, the Privacy Sandbox has come into play. It’s a space where advertisers and the broader industry can experiment with Google’s advertising tools to develop new targeting techniques.
“One could argue that Apple’s move to drop third-party cookies is focused on privacy, but that Google’s focus is revenue,” says Peter Dimakidis, Indago’s Chief Technical and SEO Officer. “Removing third-party cookies means advertisers will be more reliant on first-party data, and who owns more first-party data than anyone? Google. They’ve developed yet another way to take control away from advertisers and place it into their own hands.”
Why should you care?
Consumers fear that they are being tracked at an individual level and that large publishers such as Google are listening to their conversations, which is unfounded. As I’m sure you know, outside of remarketing, there’s little advantage to tracking individuals across the internet. What’s useful for advertisers like yourself are cohorts – anonymous groups of people who behave the same and exhibit similar preferences. Google’s move to the ‘Privacy Sandbox’ and initiatives outside of Google to create unified IDs will provide improved opportunities for you to serve relevant, contextual ads to these cohort groups.
The impact to ad tech platforms that specialise in retargeting will be significant though. While the writing has been on the wall for some time and tech companies have been preparing for the changes, those with business models that rely on being able to provide personalised ads across their partner sites are going to find the task increasingly hard (if not impossible).
How will this affect your marketing?
It all depends on where you advertise. Marketing within the Google ecosphere will remain strikingly similar; we’ll simply rely more on Google to both serve and track our marketing. For most of Indago’s clients – who are conversion-focused, invest heavily in SEO and paid search (on Google) and use Google Analytics as their main source of truth – the negative effects will be minimal.
Relying on Google Analytics to model the effectiveness of my advertising activity gives me some cause for concern, but let’s wait and see. Says Vidhya Srinivasan, Vice President, Engineering, Google Ads said of GA4,
“…the new Analytics is designed to adapt to a future with or without cookies or identifiers. It uses a flexible approach to measurement and in the future, will include modelling to fill in the gaps where the data may be incomplete. This means that you can rely on Google Analytics to help you measure your marketing results and meet customer needs now as you navigate the recovery and as you face uncertainty in the future.”
For advertisers who are reliant on non-Google platforms, your preparation needs to be more aggressive than those reliant on Google.
Should I be Scared?
Digital marketers always have something to be scared over – it wasn’t long ago that we were all panicking about Google’s threat to withdraw from Australia. Not us at Indago, though, we were confident it wouldn’t happen.
You don’t need to be scared if you prepare using our recommendations below. Remember that digital advertising represents over half of all ad dollars spent in Australia and is a huge business globally. The ability to track consumers and report effectively on ad spend won’t disappear – it’ll morph, and you need to make sure your knowledge morphs with it.
How can you prepare for a third-party cookie-less future?
- Stay informed – that’s your main aim. If you are currently using ad tech that is reliant on third-party cookies, open up discussions with your vendors about how they plan to mitigate the impact of upcoming changes. If you work with an agency, again, quiz them on their strategy for your business. If they don’t have a plan, move your dollars where there is a plan. In an ‘attention economy’ that’s noisy, cluttered and all-too-often unimaginative, being up to date with new and emerging opportunities could also give you the chance to lead while those who are less informed play catch up.
- First-party cookies – get building. The loss of third-party cookies doesn’t leave the jar empty. First-party cookies – the ones that save your shopping cart, remember your password and learn about what you like so the site can offer you relevant offers and content that’s up your alley – are safe. They give marketers the ability to collect on-site data and plenty of innovative ways to put this information to use.
- First-party data – get collecting. All good B2B marketers know what I mean. Provide your customers (or potential customers) with reasons to provide you with their data: free products, discounts, competitions, or information they desire. The more you can collect on your customers, the more value your data has. Remember, as a customer gains more trust in your brand, the more data you can collect on them. It's great to get an e-mail address and name, but what about age, gender, location, dependents, marital status, DOB, etc. etc? The recently released ‘IAB State of Data 2021’ report found that only slightly over half of all surveyed brands, agencies, publishers, and data and ad tech companies collected basic first-party data and, of those that did, the majority (53%) didn’t leverage it for advertising and marketing purposes. This is a huge, untapped opportunity. Google & BCG’s, Responsible Marketing With First-Party Data looked at companies that did use this data to say, “APAC brands that used first-party data saw an increase of 11% annual incremental revenue and 18% increase in cost efficiency”.
Without the ability to continue targeting customers and prospects when they’ve left your site (as you currently can using third-party cookies), the future is bright for marketers who can harness first-party cookies in such a way that they can use identified trends and behaviours to build content and deliver experiences that maximise relevance for their audience.
Don’t panic, not yet, anyway. Above all, stay abreast of changes as they come. What we know from being in the digital marketing arena for a long time is that, while changes can be daunting, the challenges they pose instigate innovation and creativity, and that’s what ultimately makes the web evolve and prosper.
Adapt your website to collect more first-party data and get better at using first-party cookies. Also, ensure any marketing partners you work with that leverage third-party cookies have a solid action plan to outmanoeuvre the challenge.
Be prepared and you’ll be well placed to navigate the inevitable death of third-party cookies.
Written byGary Nissim