Introduction
By now, it's no shock to anyone that third-party cookies are on their way out. In fact, 60% of global web traffic will go cookieless by 2023 and Google will phase out third-party cookies from Chrome in 2024. Now, advertisers' heavy reliance on cookie data: search history, product purchases, IP addresses, geographic locations just won't cut it anymore.
While cookies in themselves are not inherently harmful, the sheer volume of unregulated cookies on millions and millions of websites means that they can access sensitive data collected such as medical history, sexual orientation and gender identity - which is a grave and looming threat to people's fundamental right to privacy.
In fact, in the last decade alone, massive customer data breaches from LinkedIn, Facebook, Experian and Yahoo have exposed troves of personal and protected information, much of it collected and stored via cookies. People are sick and tired of being tracked. Consumers are becoming more savvy, user privacy regulations are tightening, third-party cookies are declining and marketers are in a pinch. It's high time they began to rethink their digital playbook before the curtain comes down on third party cookies.
In this blog post, we will discuss how marketers can best equip themselves to tackle a cookieless future.
What is a Cookie?
By definition, cookies are small files or pieces of information that websites send to your device by which to monitor and remember you - such as the items in your shopping cart, your login information, your website preferences, etc. [Vox] For example, if you visit a website to check the weather and enter your zip code, the next time you visit that same website, it will remember your zip code because of cookies. Broadly, there are two types of cookies in digital marketing:
First-Party Cookies
When you visit any website, it will store at least one cookie — a first-party cookie — on your browser. This cookie remembers your basic activity on the site and doesn't track your information when you visit other sites.
Third-Party Cookies
Many sites, though, store third-party cookies on your browser, too. These cookies allow social media companies, advertisers, and other website operators to track your browsing and online activity at other sites.
Action Plan for a Cookieless Future
STEPS
Step 1: Know where you stand
Marketers use third-party data in many ways. You might be leveraging cookie data for ad retargeting, on-site personalization or to build and segment audiences for your next campaign. Take stock of all your data sources and your entire marketing tech stack. Look for tools and tactics that are likely to be compromised by loss of cookie data and device IDs. You can't start preparing until you know what you need to replace and how big the impact on your results will be.
Step 2: Test and test again
Review your current campaigns and try to determine how much of the revenue you're currently generating depends on third-party cookies so you can put an appropriate price on replacements. You may want to consider running test campaigns with and without third-party cookie data to get a sense of which KPIs are likely to suffer the most without them. This will help you to identify target areas such as personalization and audience targeting where you'll need to develop viable alternatives and find new tactics that can produce similar results.
Step 3: Double down on what works
Most marketers aren't relying on a single tactic to power all their results. Once you know which holes you need to fill to meet your KPIs look for opportunities to double down on other things that you already do well. If you can no longer rely on behavioral targeting strategies, can you make up some of the difference by expanding your email campaigns, or doubling the size of your contextual ad buys?
While third-party cookies cookies form a significant chunk of the digital advertising bedrock, there are other tactics that aren't cookie dependent. It may be more advantageous to shift some of your spend into tactics you're already executing effectively than to look for net-new solutions that will require you to purchase and integrate new tools.
Step 4: Review your budget
There's no easy way to say it, but seismic changes in the digital advertising ecosystem might lead to new costs. Advertisers that try to keep budgets flat, or fail to account for the big changes coming when cookies finally crumble may not have the resources they need to adapt. Once you understand how the loss of cookies will impact your KPIs it's a good chance to start the conversation about adjusting budgets to match the new realities to come.
Step 5: Explore new solutions
While you may be able to close some of the gaps left by third-party cookies simply by shifting resources to other tactics, it's likely you'll need to invest in new solutions as well. If your cookie-based strategy relies on on-site content personalization, the next 27 months would be well spent building out a first-party data strategy to learn more about consumers from their behavior on your site rather than tracking them across the open web. Gathering email addresses, device IDs, and on-site browsing habits can help to create custom experiences that mimic those that cookies currently power. Likewise, if your business relies primarily on driving traffic and users from the web by aligning with their browsing history, contextual targeting may offer a solution. By targeting users with ads adjacent to content they're already consuming you can model the same types of audiences without surveilling them first.
Step 6: Implement and test
Most marketing teams have years of customer data to support their current strategies and decisions. New tactics will require similar testing and optimization to succeed. Don't get caught unawares by waiting until cookies are no longer an option to implement new tools. Starting early and shifting budget to new solutions now will leave your organization in a better position to transition successfully and seamlessly to the post-cookie era.
Step 7: Stay Alert
The road to a cookieless future has been more winding than some expected. The next two years are likely to be the same. For most, the best way to cope will be to stay focused on what you know works and explore new opportunities along the way. Some of the solutions that looked like they would dominate the post-cookie world, like Google's proposed FLoC framework, have changed dramatically over time while reliable formats like contextual targeting have remained more stable. Keeping an eye on the changing landscape ahead will leave you more prepared to deliver consistent results despite any major changes to come.
Considerations for a Cookieless Future
ExchangeWire rounded up all what top industry leaders think marketers should consider when they develop their strategies for a cookieless future:
- User Privacy Concerns Should be Fundamental to a Cookieless Future
- Industry Should Add Value to How Consumer Consent is Obtained
- Agencies Should Prepare for Increased Scrutiny
- Advancements in AI Technology Should be Considered
Alternatives to Third-Party Cookies
While the majority of marketers use third-party cookies, that ability will soon disappear. To combat this, there has been meaningful investment in finding alternatives. Several possible solutions have hit the market, but each has its own drawbacks. Some can't deliver the same punch of accuracy that made third-party cookies a digital marketing hit, while others are likely to spark that same sense of consumer creepiness. Here are some of the best alternatives to third-party data to power your digital campaigns:
First-Party Data
The first option is to collect first-party data. This option allows for similar targeting because it's still using cookies. First-party data strategies, however, only track a consumer's moves across the website that's implemented them. When Consumer A goes back to Wayfair.com, the site will remember what couches they browsed last time, but those couches won't follow them to other sites.
First-party data allows marketers to more effectively target ads to consumers on their own websites without following them outside of their platforms. Some shoppers will appreciate the personal touch, however, collecting first-party data can still feel intrusive for consumers who are merely browsing and don't like the feeling of being followed.
PII-Based Identifiers
Using a personal identifiers such as an email address or phone numbers, marketers can track users across different devices (cookies don't generally hop between desktop and mobile). Instead of a piece of data that follows a user's actions, these PII-based identifiers can tell a site when a previous user has returned because they recognize an ID generated from a login or other site action. That ID doesn't get tied to any personally identifying information, just the user's online behavior.
In most cases, these alternative identifiers are an even more effective way to accurately track user behavior, without violating the letter of any user privacy regulations or the third-party cookies policies of various internet giants. However, it's so effective that it may feel just as intrusive to user privacy as methods powered by third-party cookies, leaving consumers just as likely to reject it if they don't have a clear sense of what they've opted into.
Browser Fingerprinting
Unlike PII-based identifiers, which attach to a specific user, browser fingerprinting assesses various attributes of a device through your browser (browser type, operating system, active plugins, timezone, language, screen resolution, and settings) to paint a fairly accurate picture of that device and user. Though it can pretty confidently identify the same user across interactions, it's not 100% certain.
Since browser fingerprinting relies on information like IP addresses and operating systems, average consumers often aren't aware of or readily able to change it and it can be harder for consumers to control than cookie-based tracking. As a result, consumers may still feel like they're being spied on even if the tracking is probabilistic instead of deterministic.
Google Privacy Sandbox
Still in the early development stages, Google's Privacy Sandbox will use five application programming interfaces (API) in Chrome's browser instead of cookies. These will offer anonymized information to advertisers, allowing them to know more about user cohorts but without providing a user identifier. This allows individual users to remain anonymous and will limit the amount of information available to marketers.
Contextual Advertising
The only option here that doesn't entail surveillance is contextual advertising. Rather than relying on consumer identity, contextual advertising simply places advertisements near content that's relevant to those ads. Consumer A is reading an article on Good Housekeeping about decorating a living room? That's where a couch ad might pop up, not because of Consumer A's past couch-seeking behaviors.
By targeting interests rather than individuals, contextual advertising may be the smartest option for advertisers to target consumers in the fast approaching cookieless future.
With advancements in contextual technologies, ad tech companies like GumGum are leading the movement towards a more privacy-forward and cookieless future.
GumGum Will Prepare You for a Cookieless Future
As third-party cookies go out, privacy regulations are on the rise, ad fatigue is growing and consumers are fed up with irrelevant ads on their screens every day.
In the wake of this rapid shift in our digital advertising ecosystem, GumGum's contextual-first, cookieless targeting solutions are quickly gaining traction. GumGum’s contextual solutions can help you reach the people you want to target without the use of personal data now - and as the digital advertising industry continues to evolve.
For more on GumGum's cookieless solutions, please click here.
Summary
The fact is that third-party cookies are going away. And while this may seem daunting, it is a golden opportunity for marketers to take advantage of alternatives and tools that already exist to reach customers in a more future proof and privacy-forward way. [Forbes] To succeed in a cookieless world, while protecting consumer privacy, marketers should thoughtfully leverage their best resources, capitalize on their data and build strong relationships whenever possible. With such preparation, there is no doubt that marketers, advertisers and publishers will succeed in a world without behavioral data.
