Breaking Up With Third-Party Cookies
How to Prepare For A Cookie-Less Future
ABMonday is a blog series that aims to generate awareness and educate on Account Based Marketing best practices and related topics. We are kicking off the series with a topic that is currently on everyone's mind - the end of third-party cookies. This blog is the first in our ABMonday series. Read on for an in-depth explanation on what cookies are, why third-party cookies are being phased out, and how digital marketers can adapt to this major change.
What are cookies?
Cookies, or web cookies (also known as HTTP cookies) are small blocks of data generated by a web server while a user is browsing a website and placed on the device by the user’s web browser. Cookies can be differentiated by party (first- or third-party) depending from which server cookies are being dropped into the user’s browser and how they have been created.
A first-party cookie is a code that is created and archived on a website visitor’s device automatically by visiting that website. The primary purpose of these cookies is for UX, since their main responsibilities include data gathering, storing passwords and remembering other preferences.
Have you ever wondered how the websites where you have previously registered can always remember your login information? Or how certain sites recall previous choices and behaviors, from your preferred language to items in your cart? This happens when websites use first-party cookies to remember basic details, and as a result, your experience improves with every returning visit.
With a first-party cookie, you can learn about what a user did while visiting your website, see how often they visit it, and obtain other basic analytics that can help you develop or automate an effective marketing strategy. Nevertheless, first-party cookies do not provide any data about your visitor’s behavior on other websites that are not connected to your domain.
A third-party cookie is a tracking code which is placed on a visitor’s device after being created by an external website (one other than your own). When a web visitor visits your site and others, the third-party cookie tracks this information and sends it to the third party who created the cookie (for example, an advertiser).
This third-party cookie data enables ad producers to learn about your website visitor's overall online behaviors, such as websites they frequently visit, interests, and purchases. With all the detailed data that is collected, you can build robust visitor profiles. You can then leverage that data to create a retargeting list that can be used to deliver ads to your past visitors or people with similar web profiles.
The following is an example of how first- and third-party cookies work:
You search on Amazon for a Smart TV but navigate away from the site without buying anything. Later on, you open a new browser window, and suddenly an Amazon ad pops up displaying a promotion for the exact same model of Smart TV you were viewing earlier.
“What do marketers and Sesame Street monsters have in common? They LOVE cookies,” a HubSpot blog wrote.
In an effort to protect users’ privacy, many web browsers have stopped allowing third-party cookies over the past several years. Google has announced its intention to phase out third-party cookies on Chrome browsers by the end of 2022. To put this into a larger perspective, Chrome is the last web browser to block third-party cookies due to privacy concerns. Chrome also accounts for two-thirds of the global search market.
So, time is quickly running out - by later this year, marketers will no longer be able to rely on third-party cookies for effective PPC advertising.
How Marketers and Advertisers are Reacting to Google's Phase-Out
While numerous advertising agencies have criticized Google's pivot, companies like GetApp have begun to research the potential impact the change will have on marketing. In a recent survey, GetApp, which provided HubSpot with exclusive data, discovered that:
41% of marketers believe their biggest challenge will be their inability to track the right data
44% of marketers predict a need to increase their spending by 5-25% in order to reach the same goals as 2021
23% of markers plan on investing in email marketing software due to Google’s new policy
Once third-party cookies become extinct, most PPC advertising agencies will be forced to innovate by developing new tracking methods and creating new strategies to optimize their digital marketing efforts.
Things to Know About Google's Cookie Phase-Out and Privacy Pivots
1. Google isn't banning all cookies
Don’t think Google will immediately ban all your cookie-fueled marketing strategies. Thus far, Google says it's only planning to eliminate the third-party cookies on its browsers. First-party cookies will still be allowed, and those are the ones that track data about your own website's visitors.
2.Many marketers saw the cookie phase-out coming
While the "death of the third-party cookie" might seem shocking, it certainly wasn't a surprise.
Lately, some governments around the world have been investigating and legislating on data privacy issues. For example, in an October 2019 shakeup, Europe's highest court ruled that users in the EU must actively consent to all analytics cookies when they log on to a website. Without express consent, the website cannot drop web or analytics cookies on the user’s browser.
3. Marketers aren't just concerned about data
Although the move to eliminate third-party cookies on Chrome will be troublesome for some, marketers are also distressed about the reasoning behind Google's decision.
Without Chrome-based third-party cookie data, you'll still be able to leverage and target Google Ads, which will be powered by Google Chrome's first-party cookies and its Privacy Sandbox tools. However, some ad software and platforms that require third-party data will take a huge hit without support from Chrome, which may actually strengthen Google’s position.
"This move, while good for consumer privacy (in theory) is likely going to hurt most of the third-party ad platforms that utilize these cookies to generate revenue," says Matthew Howells-Barby, HubSpot's Director of Acquisition.
4. This move opens the door for innovation in advertising
While things look harsh for one type of cookie, this might not be a bad thing for proficient and flexible brands.
Although this move does cause concern, Google and other browsers have still taken a stand for user privacy. As privacy laws continue to tighten, this could be a great opportunity to start considering other less-vulnerable advertising alternatives, just in case another governance renders one of your go-to marketing tactics or processes obsolete.
Why? Most marketers strive to be innovative and think outside the box. Staying at the vanguard means continuously be questioning our tactics - are they too reliant on certain technologies or too susceptible to government regulations? Are we using them because it’s the best way, or because it’s the way we’ve always done things? Using our creative minds, we can come up with effective alternatives and create ads that resonate even better with our end customers.
What Will Replace Third-Party Cookies?
As the third-party cookie elimination deadline approaches, there are some alternatives already in place to ensure advertising agencies can handle PPC effectively. And as time continues to tick away, you can anticipate that many other inventive options will become available in the near future.
Here are some of trends that are currently being explored:
Google’s Browser-Based Model
Instead of collecting individual data, this model collects data from accounts or users and groups them into similar interest segments which later can be used by online advertisers to target ads.
These privacy-preserving alternatives for reaching relevant audiences are updated every week to keep ad targeting relevant, but they make it harder to identify individual group members.
First-Party Data Tracking
If you are an advertiser or company, then any information collected on customers/users is owned and can be used for PPC management, including segmenting audiences to offer them targeted ad placements on a site. This information includes content viewed, interested topics, and responses from surveys about demographics and interests.
In B2B marketing and advertising, you can rework your strategy at an account level, rather than a personal level. Learn more about this in our ABM ebook.
Saying goodbye doesn't have to be painful
Big changes are coming as we approach the dawn of the cookie-less era, but that doesn’t mean that your online advertising strategy is in jeopardy. Many viable alternatives are already available. Plus, the marketing technology landscape is constantly changing and evolving to adapt to the needs of digital marketers. With a bit of time, we can expect to find even better ways to reach our online audiences.
Feeling lost without third-party cookies? LeadFabric can help! If you'd like to chat with us about how to navigate the issue click here.