In August 2019, Google announced an eventual phase-out of third-party cookies from its Chrome browser. That announcement sent shockwaves through the advertising sector. The panic subsided, perhaps because of long delays; the latest announced ETA is the end of 2024.

But it’s a matter of when, not if. A cookieless future is coming. Digital advertisers are – or should be – developing strategies and tactics to cope with that future.

Here’s how to get your hand out of the cookie jar and make a successful transition to a profitable future.

What Are Cookies?

Cookies are small text files that contain data about a user. That data is stored for future use.

• A first-party cookie is a bit of information that the visited website stores locally, on the user’s computer. These cookies typically perform functions that website visitors find useful. For example, without first-party cookies, you’d have to re-type your username and password every time you visit a website.
• Third-party cookies are created by domains other than the website you’re browsing. Digital advertisers use these cookies. Generally, they allow ads to be served on other websites. Say you’re browsing Amazon for a new kayak; hours or days later, ads for that very same kayak pop up within a news article you’re reading. Third-party cookies make this happen.

Cookies in Advertising

Both first and third-party cookies play vital roles in current online advertising. They allow marketers to suggest relevant ads, retarget users across the internet, and store key pieces of user information. Cookies drive ads, and ads pump up revenue. Cookies also influence analytic measurements, which will change when third-party cookies crumble.

Why Third-Party Cookies Are Going Away

Recent rulings in Europe and growing privacy concerns in the U.S. are driving the demise of third-party cookies. Users want more control over data collected about them. Apple and Mozilla (Firefox) have already cut cookies from their browsers, and now Google will join in.

And yet, all is not lost for digital advertisers.

The Future of Cookieless Advertising

Digital advertisers now rely heavily on third-party cookies to track users and effectively target ads. But an end to third-party cookies doesn’t mean an end to targeted advertising. Marketers must pivot to collect direct customer data and find alternative targeting methods.

Option 1: First-Party Cookies

Marketers/advertisers can continue to collect valuable consumer data directly from sites they control. First-party cookie data is pure because it comes direct from the user. Data from first-party cookies, also known as essential cookies, improve predictability and forecasting.

Option 2: Contextual Marketing

Contextual marketing delivers display ads that match the content, keywords, and topics on the page while the user views it. The beauty of it: No cookies are required, and the display ads always align with the user's current intent. A user reading about home furniture, for example, will see an ad for couches.

Option 2.5: Intent-Based Marketing

Intent-based marketing applies to search advertising. Instead of obtaining possibly irrelevant data from third-party cookies, this approach matches ads to searches. The ads delivered relate directly to what the user seeks in the market.

Say the user is searching for bikes – up pops an ad for Trek bikes. Third-party cookie data might deliver an ad for kitchen knives, based on week-old browsing history. Intent-based marketing is more likely to deliver actionable results.

Option 3: Email Marketing

Today, first-party data is the greatest marketing asset, and its importance will grow with time. Collect it through email sign-ups, which can be a valuable source for filling in your customer's data profile. A collected email address opens many avenues to additional information. You can implement profile pages, polls, and target users directly. You can add your email lists to Google Customer Match for better ad targeting.

Option 4: Google Developments

Google is developing ideas for creating a more privacy-focused ad experience.

Shortly after Google’s cookie announcement in 2019, the company rolled out an alternative, the Federated Learning of Cohorts. They developed it around an open-source technology to build clusters of people with similar browsing activities. Privacy issues blocked this technology; it could quickly lead back to hyper-targeting with the combination of personal identifiers.

Google’s next crack at a cookieless future was Topics. The long and short: The Topics API assigns five topic headings to a user for a week. Then, if a site’s content applies to any of those topics, an ad can be delivered. At present, 350 interest groups exist; the relatively small number has raised concerns over limitations on detailed targeting. But that 350 is likely a floor; that number should rise over time.

FLEDGE – First Locally-Executed Decision over Groups Experiment – is also in the works at Google. The concept: Deliver interest-based ads, as selected by the browser on the basis of previously visited websites. Like Topics, FLEDGE remains in the sandbox phase.

When Are Third-Party Cookies Going Away?

Google is now testing a new featured called Tracking Protection, which began in January 2024. This new Chrome feature is set by default to limit cross-site tracking, by restricting websites’ access to third-party cookies. This is limited to random users initally but could be extended to all Chrome users in the future. The important take away: This looks like a real step away from third party cookies.

Google is shooting for the second half of 2024 to end its use of third-party cookies. Though this deadline is open-ended and has been pushed back twice, it’s wise to prepare now.

For example, make sure to take advantage of the Optimized Targeting feature within Google Ads. Optimized Targeting can help you reach new and relevant audiences by looking at your Google Ads data (keywords, creative, landing pages, etc.).

Tracking & Data Measurement

Google Analytics will operate differently without third-party cookies. Machine learning will continue to replace data that cookies provided in the past. Google Analytics will continue to delve deeper into behavioral reporting. Google’s Consent Mode will pair with Google tags to honor user preferences regarding cookies. If users opt out of cookies, modeling will fill in the missing pieces.

The Big Picture

Advertisers mostly ignored the loss of third-party cookies on Apple and Mozilla platforms. They’ve been waiting for Google.

Chrome owns 65% of the browsing market share, and Google Ads account for 28.6%. That’s why the shift has been slow. But Google has launched recent tests that clearly show steps toward removing third-party cookies. The delays are ending. Change is imminent, as soon as late 2024.   

Advertisers have viable alternatives in first-party cookies, email, contextual marketing, and Google's Privacy Sandbox projects. (To keep up with Google’s initiatives, bookmark its Privacy Sandbox.)

Marketers and advertisers must be ready for the predictable period of adjustment to the loss of third-party cookies. But the future isn’t gloomy. It offers the potential of a better balance of marketing and customer privacy. A cookieless future can enhance user confidence in an industry that takes privacy seriously.

Our team is here to help you navigate and understand changes in the digital advertising space. If you have questions or need help with your digital advertising initiatives, don’t hesitate to contact us.

Marketers and advertisers must be ready for the predictable period of adjustment to the loss of third-party cookies. But the future isn’t gloomy. https://nwsdigital.me/3I5WNdK @northwoods #digitaladvertising #privacy #cookies