Marketing in a Cookie-Less World – Are You Ready?

Digital marketing has been completely data-dependent and a lot of this data that marketers have been greedily gorging on comes from third-party cookies today. But as we move into 2022, it is time we take stock of our marketing readiness for a cookie-less world.

Awareness and concern about privacy have been steadily increasing and users are actively taking steps to reduce the amount of data they share online. In light of this, most major tech players have also announced/implemented steps to restrict third-party cookies thereby restricting data collections and user tracking on their platforms.

1. Towards a third-party cookie-less world
2. Not entirely a cookie-less world
3. The impact of losing third party cookies
4. What can marketers do in a cookie-less world
5. Will Google Analytics work without cookies?
6. Privacy Sandbox – Google’s response to cookie-less future

Towards a Third Party Cookie-Less World

• Safari and Firefox have been working towards blocking 3rd party cookies since 2013. In 2019, Firefox started blocking all known tracking cookies. In 2021, with the launch of Firefox 86, they brought in Total Cookie Protection that confines cookies to the site where they were created, which prevents tracking companies from using these cookies to track your browsing from site to site.
• In 2020, Safari started fully blocking 3rd party cookies
• Early 2020, Google announced that within 2 years they will stop support for third-party cookies
• iOS 14.5 and later, will prompt iPhone and iPad users to choose if they would like to share their data with apps that monitor their behavior and share that data with third parties. This necessarily means that iPhone users can now stop advertisers from following their digital lives.

Not Entirely a Cookie-Less World

It is only the third-party cookies that are going to get depreciated – that is cookies that do not belong to the website’s domain you are surfing but the ones that are dropped in your machine by ad servers, trackers, etc. For example, if a user is browsing website example.com – a cookie from that domain is considered a first-party cookie but the Facebook tracking cookie that is dropped on the user’s browser by example.com is considered a third-party cookie.

First-party cookies will still work and with third-party cookies gone, advertisers will have to be more dependent on first-party data. Businesses will now need to have a first-party data strategy that allows them to gather as much information from their own domain as possible and to leverage that data to provide a customized user journey.

I believe businesses are still going to buy or share data from trusted partners but there will be a lot more focus and effort to ensure customer consent is being honored.

The Impact of Losing Third Party Cookies

The impact from the loss of third-party cookies will be felt across the digital marketing ecosystem – the consumers, the advertisers, the ad tech players, all of them. There are two key areas that will be impacted by the loss of third-party cookies – ad targeting and measurement.

For Consumers

• Consumers will have more control over the data they share with businesses
• They are likely to see more irrelevant ads, as advertisers will not be able to personalize ( except for the ones who have first-party data)

For Ad Tech Players

• Ad Tech players will need to change their standard tactics of collecting user data on advertiser’s websites for performance tracking and targeting. In their current state, these functionalities are third-party cookie-dependent
• Ad tech players will lose their ability to target people at an individual level
• DSPs will now need to rethink their positioning which typically emphasizes the availability of differentiated use of third-party data for targeting, against the huge first-party audience data that Google or FB has

For Advertisers

• The end of third-party cookies will lead to fewer opportunities for ad personalization
• Behavioral targeting and Ad retargeting will have a serious impact
• The loss of cross-platform frequency capping could result in ad fatigue/oversaturation for the audience.
• Most third-party audiences (data collected via third-party cookies) will diminish in size due to cookie expiry, and eventually be too small to use.

Analytics & Measurement

• Marketing KPI’s will be severely affected, for example, with third-party cookies gone, most view-through conversion data will disappear for your display campaigns
• Cross channel attribution, Multi-touch attribution, Audience reporting will get impacted

What Can Marketers Do in a Cookie-Less World

1. Improve First-Party Data Collection

Now that third-party cookies are no longer going to be available, as an advertiser, you will be primarily dependent on first-party data. Establish proper and thorough data capturing mechanisms that are compliant and get data about users who have already engaged with your brand. Building up first-party data takes time, and to use the data effectively across most platforms you will need a certain volume – so get started!

2. Recheck and Refine Cookie Consent Management

With GDPR and CCPA in play, most websites today already have some sort of cookie consent management system. It’s time you take a closer look at that and if you are one of the very few who don’t have a cookie consent management system, you should get one in place right away. This is important to make sure your first-party data is fully compliant with regulations and future-proof. Make this an opportunity to increase trust with your website visitors, clearly communicating to them about how you process and protect their data

3. Leverage Second Party Data from Media Giants and Publishers

Media giants like Google and Facebook will continue to provide aggregated audience data on their advertising/media buying platforms. While losing third-party cookie data will hurt them a bit in terms of tracking, targeting, and ability to retarget, they will still continue to have a lot of audience data through all the logged-in users across their platforms and products. This is rich audience data available for free – don’t undermine it.

Most of the major publishers also have their own first-party data that you as an advertiser can use in case of direct buys or private auctions on programmatic platforms.

4. Third-Party Cookies Are Gone – Third-Party Data Might Still Be There

As we get used to not having third-party cookies, it doesn’t necessarily mean that third-party data is lost forever. There are cleaner ways to collect third-party data – there are already firms like Experian, VisualDNA, etc who collect and build third-party audience data without the use of cookies. I strongly believe we will see a lot of innovative offerings in that space.

5. Rethink your web analytics/measurement setup

In a cookie-less world, ad performance measurement is going to get far more complicated than where it is – even in the current setup it is not perfect. The loss of third-party cookies will add to the problem in several ways including cross-device tracking and attribution. Refer to the section below on how Google Analytics is getting ready for the cookie-less world.

6. Take a closer look at your MarTech stack

Your current Martech stack might have several tools that are reliant on third-party cookies – figure out what happens when the cookies are gone, how are your Martech partners getting ready for the cookie-less world?

Recheck on your data ownership, ensure you have full control of your data, not just in terms of usage but also in terms of access and portability, so if you happen to change any of your tools or agency, you are not losing your hard-earned first-party data.

Will Google Analytics Work Without Cookies?

Google Analytics is the most widely-used web analytics application across the world with almost 70% market share and I thought this is probably one of the basic questions most marketers would have in mind.

Today Google Analytics works by setting cookies on a user’s browser when they visit a website that uses the platform. The loss of third-party cookies definitely poses a challenge to Google Analytics, but Google has already addressed this.

GA4 was introduced as a completely new solution focussed on privacy, that can work with or without cookies. Google plans to fill in data gaps in GA4 using machine learning and statistical modeling as the world becomes more and more cookie-less.

While GA4 is the default option offered by Google today, Universal Analytics is still available and Google recommends running both in parallel. GA4 might fill in some gaps in user behavior that are caused by users not accepting cookies.

Also, another way to keep using Universal Analytics is to do a server-side implementation of Google Analytics, where the analytics cookies are served from your own domain (subdomain), thereby making them first-party cookies.

In a server-side setup, you necessarily create an endpoint in a server environment that you own, which acts as a sort of a proxy between the hits sent from browsers and devices and the actual endpoints to which the hits are collected. For the ones more technically inclined, please review this article by the amazing Simo Ahava.

Privacy Sandbox – Google’s Response to Cookieless Future

Google has now created the Privacy Sandbox and pitching it as a solution for ad targeting and tracking as it goes on to kill the third-party cookies on Chrome. In a cookieless world, Google’s Privacy Sandbox will replace cookies with web browser APIs and these will set the standards for ad targeting and measurement while also helping with ad fraud prevention. The APIs will provide aggregate data on attribution and conversion that could be valuable. Google’s Privacy Sandbox will rely on anonymized signals within a person’s Chrome browser. While the world is still waiting to get access to Privacy Sandbox and get a feel of it, here are a few APIs that are likely to have the most impact in the ad tech world –

FLoC or Federated Learning of Cohorts

This definitely piqued the interest of the advertisers. FLoC will rely on the browsing habits of groups of similar people (cohorts) which will then be used in Google’s ad platforms for advertisers to use for Interest-based targeting. The idea of FLoC relies on placing individuals in large groups of users with similar browsing histories so the advertisers are able to target based on the interest, without compromising on the individual’s privacy.

Topics

While it started with FLoC, Google has now stopped FLoC and has declared that it is the Topics API that will enable interest-based ad serving. The topics API does three things – maps websites to the topic of interest, calculates the top topics for a user based on their recent browsing history, provides an API to share topics currently of interest to the user, so they can be shown ads as per their interest You can find more here.

Attribution Reporting / Conversion Measurement

The conversion measurement API would allow advertisers to measure ad click conversion and ad performance without third-party cookies. However, it is to be seen how it pans out for more complex situations like multi-touch attribution or if an advertiser is working with multiple reporting partners.

Trust Tokens

This API could be extremely powerful in preventing ad fraud. The Trust Token API allows a website to pass on a limited amount of information about the user without breaching the user’s privacy, which is then used by other websites to validate if the user is a real one or a bot. Simply put, once a website identifies a user to be trustworthy based on their activity (completion of a transaction, long-term account usage, etc), they issue a token to the user’s web browser. When the user accesses another website, it can then check the web browser for tokens from an issuer it trusts, and then redeem tokens as necessary.

While the Privacy Sandbox looks like an exciting and promising solution, it is not until the end of this year or early 2023 that it will be available for users. Here you can see a full timeline for the project. With the involvement of the WWW Consortium, this Privacy Sandbox could lead to open web standards that could be adopted by other browsers. It would also be interesting to see if Google would restrict its own ad products to the same aggregated user data in the Privacy Sandbox or if Google platforms get privileged access to more granular user data.

The loss of third-party cookies is sure to bring in major disruption to the current digital marketing/advertising ecosystem. It is going to take its own time for the turmoil to settle and for the ecosystem to stabilize considering all the changes that are going to come across ad products, targeting, and measurement. As marketers, let’s get ready to adjust our strategies, rethink our playbooks, reevaluate our channels and measurement as we get used to emerging standards of consumer privacy norms.

Here’s to a new beginning in the cookieless world!