The Death of Third-Party Cookies: Challenges & Opportunities for Marketers
The end of third-party cookies is one of the biggest changes to happen in marketing – and to the internet – ever.
Even though the death of third-party cookies has been common knowledge for years, many still find it confusing or are unsure about how to proceed. Cookies have defined marketing for years, and are an integral part of how marketers work.
So, how can a world without cookies function and how can marketers and brands still succeed? At Code3, we see opportunities for better data, stronger metrics, and better campaigns.
Keep reading to find out more about the future of a world without cookies, the solutions we see for marketers and brands, and how to prepare for what’s next.
Why Are Cookies Going Away?
In 2020, Google announced the intention to slowly phase out third-party cookies. Today, internet browsers are increasingly removing the ability to use third-party cookies for marketing, Safari has Intelligent Tracking Prevention (ITP), and Firefox quickly followed suit with Enhanced Tracking Protection (ETP). Chrome is phasing out the use of third-party cookies by 2024.
With heightened concern about consumer privacy, brands, tech firms, and the government have been looking at cookies as one way to increase privacy for individuals.
91% of consumers globally are concerned about the amount of data companies can collect on them, and 42% have taken steps to remove the amount of data they share online. These fears change how people interact with the internet, and the steps regulators are willing to take to confront their concerns.
Make no mistake, this change is enormous – possibly one of the biggest changes to happen in digital marketing since the dawn of social media. But we at Code3 are prepared for these changes and see this as an opportunity to use better systems, better data, and provide better results.
How Cookies Work
Cookies are small files of information that are sent to your browser through a website you visit. Cookies are meant to help a website remember information about you and your visit. In marketing, cookies collect data about users, and marketers use that information to serve ads and content that’s appropriate for those users.
There are two main classifications of cookies – first-party and third-party. The difference between first and third-party cookies boils down to what domain the cookie originated from. First-party cookies are set in the same domain of the website where the user navigated.
In contrast, third-party cookies are created on a different domain of the website where the user visited.
Tying cookies to individuals got even more complex as the world became more mobile with the introduction and proliferation of smartphones, and it became difficult for consumers to control their privacy.
What This Means for Marketers
The advertising ecosystem primarily relies on third-party cookies to target and measure users. The entire ad ecosystem has long depended on cookies, and ad technology has evolved to meet those needs.
We want to be clear, the deprecation of the third-party cookie and mobile identity changes doesn’t mean the death of digital advertising. It just means the industry needs to find an alternative way to identify people in a privacy-safe and controlled manner.
Marketers need to recognize the limits of cookies and the benefits of looking toward the future – the world of first-party data.
Turning off third-party cookies means brands need to seek different first-party data solutions to be able to continue offering services like audience profiling and targeting, frequency capping, bidding, and measurement and attribution.
Identity solutions are a viable alternative to third-party cookies. Identities are better than cookies because identities are:
- Transparent: Consumers have insight & input on how data is collected and used
- People-Based: Identities represent actual individuals, not a device or piece of software
- Interoperable: Can be leveraged across platforms consistently without a need for syncing
- Persistent: Profiles can be added in real-time to round out and keep current
- Abundant: Can be used in all channels, even in-app and CTV
Marketers who put identity at the center of the enterprise will win. Brands must prioritize first-party data because it provides meaningful insights into customers and can better inform marketing plans while enabling them to deliver more personalized experiences.
Advertising identifiers, e.g. IDFA, CTV IFA, Google Ad ID, etc. are aimed at being reliable holistic representations of users and their digital touchpoints but face similar scrutiny as third-party cookies. When users provide personally identifiable information (PII) like an e-mail or a phone number to identify themselves on a website, this information can be used as a deterministic identifier by all the websites that have collected it.
This system can tailor experiences along the customer journey and get a more complete picture of their customers, as well as improve marketing efficiency, enhance bid price optimization, and gain access to more accurate measurements and post-campaign analytics.
Buying Into First Party Data Solutions
Some of the biggest names in advertising from brands to ad tech to trade bodies are banding together to influence a universal solution. The new alliance named "Partnership for Responsible Addressable Media” (PRAM) is the latest group hoping to solve the industry’s identity crisis.
As part of PRAM, the IAB Tech Lab’s Project Rearc will be responsible for much of the technical framework for these new standards. Additionally, players like IBM are leveraging AI’s cookie-less data processing and machine learning capabilities to create solutions that achieve faster, more impressive results based on consumer intent.
A Path Forward
So what’s next for you? Marketers need to:
- Understand the various public working groups and private solutions being developed to power authentication for identifying consumers.
- Read an overview of Chrome’s Privacy Sandbox and how cohorts play a role in understanding demographic info and behavioral interests.
- Learn why data clean rooms are one of the most important initiatives providing customized analysis with user privacy and high data security at the core.
And most importantly, don’t be afraid that cookies are going away, and don’t be afraid to talk about it to other marketers, your brands, or technology companies. First-party data solutions are the way of the future and promise to create even better atmospheres for marketers to do their jobs better than ever, and get brands results.
Want to learn more about how we can work together to help your brand meet your goals? Contact us now.
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