Third-party cookies were until now the cornerstone of online advertising. Marketing campaigns were largely based on user data that cookies were offering, but from mid-2024, Google will deny advertisers the access to this data, meaning the digital industry must find how to adapt with new marketing strategies.
Third-party cookies are essentially filled with user data, or put it simply, a cookie is a small file that tracks user activity. Cookies can record if a user visits certain sections of a website more than others. Cookies can also give information about user behaviour, for example what advertising content are they more likely to click on? Third-party cookies are then collected by the websites the user visits to allow the websites to personalise the user experience and the advertising content specifically based on interests, or to serve advertising based on tactics such retargeting, frequency capping or sequential messaging.
The benefit of cookies is they allow online sellers, advertisers and publishers a very accurate and relatively reliable way to understand their audiences and segment them based on campaign requirements. However, under the Privacy Sandbox project, third-party cookies will disappear from Google’s Chrome browser in 2023.
The UK and the rest of the world, consumers are increasingly mindful of the use of their data, and consent management has become a real social discussion topic, particularly in the post-GDPR era. Now, data collected via a cookie solution is considered to be more vulnerable, and internet users quickly found ways to bypass cookies with ad-blocker solutions, which obviously means a potential revenue loss for publishers.
Aware of users’ mistrust of cookies, the major web browsers responded, first Safari, then Firefox. But what shook the digital ecosystem was Google’s announcement. As from 2023, Chrome will no longer support third-party, and with Google’s browser accounting for over 64% of global internet traffic, that’s rather a big deal.
Online marketing actors must adapt to the new “cookieless” world.
So, why is the disappearance of third-party cookies so important for digital advertising?
The disappearance of cookies worries advertisers so much because digital marketing cannot effectively exist without targeting, and certainly not in the manner marketers have come to expect. A non-targeted advertising strategy rarely meets its goals, and its performance rate is also very low.
Tired of being drowned under endless advertising campaigns, the internet user of today doesn’t want to have ads forced down their throat. However, if the experience is right and adds something to their overall online experience, they will give their consent more easily to personalised advertising content. Indeed, 61% of internet users in the UK say they feel positive about personalised advertising, as long as the experience is right.
We have a paradoxical situation whereby cookies can provide a relevant personalised ad experience, however browsers have reduced the ability that allows advertisers to achieve this.
But there aren’t many solutions that can obtain accurate information about users. The online advertising industry was built based on cookies, and has been using third-party cookies for over 20 years. With cookies now on their way out, it requires them to find and implement an innovative, quick and efficient solution.
Targeting solutions in place for a cookieless web ecosystem
Fortunately, solutions aiming to replace third-party cookies are already starting to appear, and whilst some of them are promising and relatively quick to implement, those within the advertising ecosystem don’t have a moment to lose. Rather than endure that last minute scramble, the industry has to test their targeted advertising solutions before the disappearance of third-party cookies, thereby troubleshooting issues in advance and experiencing a much calmer transition without putting revenue and campaign performance at risk.
Retail Media: targeted advertising throughout the buyer journey
In a cookieless world, e-commerce platforms will continue to collect specific customer data, simply because to complete a purchase specific details must be disclosed in order to fulfil the order. At checkout, most ecommerce providers give customers the option of either checking out as a guest, or to create a personal account that records details for ease of purchase in the future.
This brings a new(ish) player to the forefront; Retail Media.
Retail media is when a retailer offers advertisers the ability to use their data within retailer sites and apps. It is primarily used by brands who don’t normally have a direct relationship with the customer, CPG being the prime example of this.
But retail media isn’t just for ecommerce retailers. Whilst the retail media concept has been around for many years for bricks-and-mortar retailers with in-store promotions, point-of-sale collaterals and discounts in printed loyalty card marketing, it is increasingly omnichannel. What is unique about retail media is it offers brands targeted advertising campaigns from start (awareness) to end (purchase and loyalty) of the buyer journey, in many cases whether that is online or instore. Such is the potential of retail media, marketing expert Colin Lewis describes it as the ‘third-revolution of digital marketing’ (after search and social).
Through retail media platforms, advertisers are able to utilise a retailer’s first-party data, which can be used to offer very specific audiences to advertisers. This will help guide offers to certain segments of customers, such as new vs existing, similar purchases etc.
First party data
Marketers will have to turn to first party data to guide their offers as core capabilities leveraged today through cookies will disappear. First-party is the data any website or publisher collects data in a user-declared manner, and this was already important because the information third-party cookies provide is less reliable than first-party data.
That said, many website and publisher audiences are limited, and therefore they rely heavily on programmatic ad revenue to stay afloat. For this, where user consent is obtained, privacy-first authenticated identifiers can be used to drive addressability across all browsers so that revenues are maximised, advertisers are able to execute the personalised experiences and performance metrics needed to determine success.
Contextual targeting: returning to an old marketing approach
Contextual targeting is the old way of online advertising. By analysing the URL and content keywords, appropriate advertising campaigns are placed. Currently, existing advanced sentiment analysis tools allow for decent targeting, but contextual targeting does not allow the same level of precision for third-party data.
That said, it does have its value as it can be applied to the publisher’s full inventory, and is a cheaper online targeting solution.
Google solution: Privacy Sandbox
To follow the disappearance of third-party cookies from Chrome, Google announced that it wanted to develop its targeting solution and has called for proposals under the name of Privacy Sandbox. This solution is said to help to target Internet users in the same way as third-party cookies do, however exactly how this alternative would work is still unclear at the moment.
What we are aware of is it would be group-based targeting rather than personal targeting, and it would also give Google even more control over the web marketing market.
SSO to replace third-party cookies: a connection common to the entire ecosystem
SSO (Single sign-on) already exists on many websites, and once the Internet user has filled their ID and password on a platform, they can automatically log in to all other platforms. An example of this is Facebook Connect, which allows users to connect with many platforms with a single click.
In France, there exists a solution to log in to various government websites: FranceConnect, which is a single sign-on for internet users to enable persistent data collection and was set up as an interoperable ID to replace third-party cookies. Although the creation of a common ID for the web ecosystem would be the best solution, as such IDs could be used outside a browser and be applied to connected TV. However this does imply that internet users actually do log in, and in reality this is fairly unlikely to apply to the majority. Setting up an interoperable ID is also a considerable challenge for both publishers and advertisers.
It will be here sooner than you think
Digital advertising is about to experience a major upheaval, and the whole marketing world must be reorganised.
Those in the online advertising ecosystem need to implement solutions now to anticipate the shock waves of the cookieless revolution, and not wait until it’s too late.