How will you target success when the cookie jar's empty?
Are you planning for a post-cookie world? Does the end of third-party cookies really matter for your business?
Google has announced a delay to its plans, but the end of third-party cookies is inevitable.
The potential impact can be seen in the shares of adtech companies like Criteo which saw its value drop from a 2017 peak of $3.5bn to less than $1bn in 2020.<sup>1</sup> Criteo’s shares fell by a quarter in January 2020 when Google first announced that its Chrome browser would stop using third-party cookies within two years.<sup>2</sup> In June 2021, when Google announced a delay, Criteo’s shares bounced back by 11%.<sup>3</sup> Other companies, like Trade Desk, saw similar leaps on news of the temporary reprieve.
But what does the news mean for marketers? And what are the alternatives?
The effect on your brand will depend on how much you currently rely on tracking customers’ behaviour across the web.
Third-party cookies are placed on a web user’s device when they visit a site. The cookies then track the user’s activity as they visit other sites and send that information back to the cookie’s creator (often an advertiser). As a result, the cookie creator can gather a huge amount of information about an individual’s online behaviour and interests including the sites they visit, the searches they make and the products they buy. When you’ve browsed for a jumper online and then found ads for that very product popping up on other sites you visit, that’s the work of a third-party cookie.
However, not all cookies are the same. First-party cookies are relatively benign, and they are staying. They operate only with the site for which they are created and are most commonly used to enhance the user experience by saving basic data. When Amazon remembers your login information and what you have in your basket, that’s the first-party cookie.
In 2020, Google announced it would phase out support for third-party cookies on its Chrome browser. Apple’s Safari, Mozilla’s Firefox and Microsoft’s Edge browsers have already done this, so Google is lagging in fact. But with Chrome’s 64% market share (63% on mobile and 67% on desktop),<sup>4</sup> Google has the biggest impact.
Change was coming, anyway. Customers are increasingly concerned about online privacy and third-party cookies enable the “creepy” behaviour that most concerns users. Their response can be seen in the growing use of ad blockers (around one in four internet users<sup>5</sup>), privacy-oriented search engines (DuckDuckGo grew by 46% in 2021<sup>6</sup>) and privacy-focused browsers (Brave now claims 50 million users<sup>7</sup>).
Legislation like the EU’s GDPR, California’s CCPA or Brazil’s LGPD are a direct consequence of privacy worries.
Third-party cookies are a rich source of personal data that will no longer be available. If you built your marketing on this tracking ability – for targeted online ads or pinpoint profiling – you need new plans.
The combination of regulation, consumer privacy technology and the actions of other browsers has meant that cookie-driven data was already being diluted in value. Some marketers have abandoned the approach because of quality concerns so, whatever Google decided, the writing was on the wall for “creepy cookies”.
As with Apple’s ad privacy changes, many see a competitive angle to Google’s change. Phasing out third-party cookies makes Google’s own first-party data more valuable. Since announcing the change, Google was working on its own alternative, Federated Learning of Cohorts (FLoC), which it reckoned was at least 95% as effective as cookie-based advertising.<sup>8</sup>
Floc is now dead, however.<sup>9</sup> Concern over both privacy and competition has killed the project. Publishers, advertisers and rivals were concerned that FLoC’s black box approach would leave Google with too much control. Privacy advocates felt that FLoC’s method of collating individuals into anonymised groups with similar interests would still leave individuals identifiable. Google is now working on a new tool, Topics, which it says uses much broader, simpler categories.
Other major web destinations are leveraging their rich and valuable data. Many marketers who rely on data-heavy targeting will be evaluating these new offerings along with the second-party data offered by Amazon and Facebook. They’ll also be keeping an eye on Google’s Topics to see if it succeeds in balancing competition and privacy concerns to provide a viable tool for targeting.
Other walled gardens will follow. In January, media giant NBCUniversal launched NBCUnified, its first-party data platform which claims to reach 230 million adults per month across its properties from news and sports to theme parks.<sup>10</sup>
In a recent survey, 41% of UK marketers felt that tracking the right data would be their biggest, post-cookie challenge.
Many marketers are turning to the information they do have. They’re focusing on data from their own, first-party cookies, creating perspectives and profiles from a swathe of internal sources – from sales to web analytics. And as one contributor to a Forbes Expert Panel put it, “We need to reignite the lost art of asking our customers who they are, what they want and how they like to be communicated with.”<sup>11</sup>
That means building customer relationships that are grounded in trust, multi-dimensional in nature and that provide a fair exchange of value. An example of this is brands’ use of contextual targeting in place of personal targeting.
New solutions will also emerge. Now is the time to experiment with different approaches and to measure the results.
The last point is key.
By bringing expertise in-house, brands can realise a “once-in-a-generation opportunity to deepen customer relationships and drive growth.”
As Deloitte observes, this is a chance to take back control of what has too often been a black-box, dark art. Hiring the best talent and selecting the best partners will give brands the transparency that is essential in the transition to a healthier, cookie-free, marketing diet.
10th Man works with some of the world’s biggest brands to provide deep and unbiased insight into marketing performance and organisational decision-making. If you’d like to discuss how we can help develop greater understanding of a more dynamic marketing landscape, please contact us at team@10thMan.media.
<sup id="copyref1">1</sup> Financial Times (2020), “Cookie apocalypse” forces profound changes in online advertising, https://www.ft.com/content/169079b2-3ba1-11ea-b84f-a62c46f39bc2
<sup id="copyref2">2</sup> Financial Times (2020), “Cookie apocalypse” forces profound changes in online advertising, https://www.ft.com/content/169079b2-3ba1-11ea-b84f-a62c46f39bc2
<sup id="copyref3">3</sup> Financial Times (2021), Google delays plans to phase out third-party cookies by 2 years, https://www.ft.com/content/b42db1db-8cfd-4247-90f5-3c6f934b5b3d
<sup id="copyref4">4</sup> Statcounter Global Stats (2022), Browser Market Share Worldwide, https://gs.statcounter.com/browser-market-share
<sup id="copyref5">5</sup> eMarketer (2021), Ad Blocking, https://www.emarketer.com/topics/topic/ad-blocking
<sup id="copyref6">6</sup> Bleeping Computer (2021), Privacy-focused search engine DuckDuckGo grew by 46% in 2021, https://www.bleepingcomputer.com/news/technology/privacy-focused-search-engine-duckduckgo-grew-by-46-percent-in-2021/
<sup id="copyref7">7</sup> Brave (2022), https://brave.com/
<sup id="copyref8">8</sup> Google Ads & Commerce Blog (2021), Building a privacy-first future for web advertising, https://blog.google/products/ads-commerce/2021-01-privacy-sandbox/
<sup id="copyref9">9</sup> Financial Times (2022), Google changes course on cookies plans following advertising industry backlash, https://www.ft.com/content/69b0fdac-1f26-4b10-be25-4efa1aadaf09
<sup id="copyref10">10</sup> DigiDay (2022), The Rundown: NBCUniversal’s first-party data platform keeps pace, https://digiday.com/media/the-rundown-nbcuniversals-first-party-data-platform-keeps-pace/
<sup id="copyref11">11</sup> Forbes (2021), 14 Key Steps Marketers Can Take To Prepare For A ‘Cookie-Less’ World, https://www.forbes.com/sites/forbescommunicationscouncil/2021/12/14/14-key-steps-marketers-can-take-to-prepare-for-a-cookie-less-world/
<sup id="copyref11">12</sup> Deloitte Digital (2020), What the end of third-party cookies means for advertisers, https://www.deloittedigital.com/us/en/blog-list/2020/what-the-end-of-third-party-cookies-means-for-advertisers.html