Cookies are small files of information that are placed in your browser such as Google Chrome when you visit a website.
First-party cookies are cookies that are dropped, kept and owned by the website that the user visits.
Third-party cookies are generated and kept by 3rd parties/domains other than the one that the user is visiting. They allow cross-site ad tracking, broader audience profiling and targeting, and greater personalisation in advertising. Third-party cookies allow ads to be ‘hyper- targeted’ but data privacy is a problem. Users have no transparency about for what reason and which parties are using their data.
Internet users’ growing demand for data transparency and control over privacy resulted in new policies such as GDPR (General Data Protection Regulation) in Europe and CCPA (California Consumer Privacy Act) in the United States.
Compliance has been a struggle for many companies. Brands have started to integrate consent management platforms to their existing data management systems to comply with the new privacy regulations.
And as the inevitable data privacy era has arrived tech solution providers have started to adapt: Firefox started by blocking third-party cookies in 2019. Apple reacted in 2020 by disabling third-party cookies in Safari and ended its support for its IDFA (Identifier for Advertisers) in iOS 14. Finally, Google announced in 2020 that it would block all third-party cookies in Chrome by the end of 2023.
In this privacy first world brands and solution providers that figure out how to deal with the changes will lead their industries.
Solutions such as contextual targeting, use of first-party data, customized (location, time-based) messaging will still allow to interact in a personalized way via different digital channels like search and display.
Advertiser-property first party data, publisher-owned second party cookie data, server cookies and new generation non-cookie based third part data will allow audience-based targeting in a privacy compliant way.
A variety of audience data will continue to exist and data technologies such as DMP, CDPs will adapt to the new privacy compliant data era rules.
In the long run internet users will feel safer, their confidence towards user privacy will increase and as a result advertisers will benefit in an indirect way from this privacy first digital environment. But marketers will have to start to combine the use of different solutions such as Marketing Mix Modelling (MMM), sales & conversion lift and attribution modeling to achieve an accurate measurement & analytics set-up.
What will change?
- With the disappearance of third-party cookies, internet usage will become more privacy compliant, and consumers will gain greater control over personal data they share online.
- Instead of counting massively on 3rd party data providers, publishers will have to develop new strategies for revenue generation from the large audience data they generate.
- The hyper-personalization of web experience will be impacted.
- Tech giants such as Google will continue to work with worldwide online community to develop more private alternatives such as Privacy Sandbox & Federated Learning of Cohorts suitable for advertising purposes.
- To continue to provide effective targeted ads and accurate measurement, existing methodologies will need to evolve to a holistic use of MMM, attribution, sales & conversion lift
- Many adtech solution providers will need to rethink their strategy and products to adapt (first party IDs, identity resolution etc)
- In the short-term there will be a moderate impact on digital marketing (Chrome will phase out 3rd party cookies by the end of 2023) but parties should react from now on.
What to do?
- Implement a premium cookie consent management solution: a CMP is a technology for websites enabling them managing the data privacy requirements and be compliant with major data privacy laws such as GDPR, CCPA/CPRA and more.
- Re-evaluate your information technologies & data ownership: be sure that you are the owner of the strategic data you use and check IS & data technologies you benefit from and build a strategic plan to avoid a last-minute data crisis (technology or agency change etc)
- Develop your first part data pool: build a solid first party data collecting strategy and determine necessary mechanisms/tools to achieve it.
- Tap into second-party data from AdTech leaders: Google and Facebook’s walled gardens offer anonymized but granular audience data free of additional charge
- Collaborate with publishers to use 2nd party data: using private deals and new generation of anonymized data resolution/exchange solutions wider your audience reach.
- Explore new generation 3rd party cookie free data providers such as Dynata, Visual DNA, YouGov UK offering demographic data, interest data, and panel survey data
- Test and be ready to use new generation of contextual targeting in your digital advertising mix
- Adopt new measurement strategies: start to integrate MMM, attribution, sales & conversion lift methodologies to guarantee a smooth passage towards 3rd party cookie-less digital era