Digital advertising is undergoing a seismic shift with the impending deprecation of third-party cookies.
This phasing out has been primarily driven by rising concerns over user privacy and data security and major web browsers like Safari and Firefox have already gone cookie-free.
While this change aims to create a safer, more privacy-centric web environment, it also poses significant challenges for advertisers who have long relied on third-party cookies for targeting, measurement, and personalisation.
Google Chrome – the world’s most widely used browser – was due to follow suit. However, Google has recently announced a swift U-turn on its decision made six years ago and will continue to allow third party cookies for the foreseeable. This change of heart has been driven by difficulties in creating effective privacy-focused alternatives, strong resistance from the advertising industry, and increased regulatory oversight.
Browsers such as Safari and Firefox who have committed to the change are shifting to privacy-friendly alternatives like first-party data, contextual advertising, and new technologies like Google’s Privacy Sandbox (e.g., Topics API, FLEDGE). The goal is to keep ads relevant without compromising user privacy.
How do advertisers currently use third-party cookies?
Third-party cookies are pieces of data stored on users’ devices by advertising and analytics platforms to track behaviour across multiple websites, in addition to the one they are currently visiting.
This is unlike first-party cookies, which are created and used by the platform itself for essential functions like remembering user preferences.
These third-party cookies allow advertisers to build detailed user profiles, enabling personalised advertising and improved ad targeting. However, their misuse has led to mounting privacy concerns, prompting regulators and tech companies to take action.
Why are third-party cookies being phased out?
The shift away from third-party cookies is largely rooted in privacy concerns. Users are increasingly aware of how their data is being collected, shared, and monetised, and regulators around the world are responding with stricter privacy laws, such as GDPR in Europe and CCPA in California.
Additionally, browser developers have taken the lead to enhance user privacy:
- Safari (Apple): Introduced Intelligent Tracking Prevention (ITP) to limit tracking by third-party cookies as early as 2017.
- Firefox (Mozilla): Implemented Enhanced Tracking Protection (ETP) to block tracking cookies by default since 2019.
- Chrome (Google): Announced plans to eliminate third-party cookies by 2024, offering more time for advertisers to transition to alternative solutions.
What does this mean for advertisers?
Removing third-party cookies will significantly impact advertisers, in terms of:
- Audience Targeting: Without third-party cookies, advertisers will find it harder to track users across multiple websites, reducing their ability to deliver personalised ads.
- Measurement and Attribution: Understanding the effectiveness of campaigns becomes more challenging without cross-site tracking, making it difficult to attribute conversions accurately.
- Retargeting: Advertisers will lose a common mechanism for re-engaging potential customers who previously interacted with their websites.
So, what are the alternatives?
To adapt to the loss of third-party cookies, advertisers are exploring various alternatives:
- First-Party Data: Gathering data directly from customers through subscriptions, purchases, or interactions on owned platforms.
- Contextual Advertising: Displaying ads based on the content of the webpage, rather than user behaviour.
- Privacy Sandbox (Google): A set of technologies aimed at enabling targeted advertising without compromising user privacy, including Topics API and FLEDGE.
- Unified ID Solutions: Industry initiatives that aim to provide privacy-compliant tracking alternatives.
Advertisers must start prioritising privacy-first strategies to maintain their marketing effectiveness. This includes enhancing their first-party data collection methods, investing in contextual targeting, and staying informed about emerging technologies such as Google’s Privacy Sandbox.
Collaboration between advertisers, tech companies, and regulators will be key to ensures that advertising remains relevant and effective without compromising user privacy.
The last bite: final thoughts on life after cookies
The phasing out of third-party cookies marks a turning point for the advertising industry. While the transition may be challenging, it also presents an opportunity to build more transparent, privacy-centric advertising solutions. Those advertisers who adapt early and embrace innovative approaches will be in the sweetest position to thrive in the cookieless future.
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