Demystifying the Impact of Cookie Deprecation
The deprecation of cookies has been anticipated for a long time, and it represents a significant challenge for some digital marketers more than others. Over the past few years, the space150 team has been exploring the anticipated impact on our client’s digital strategies. Dive in with us as we break down how to best navigate and prepare for the big shift.
What is Cookie Deprecation?
Since the inception of Internet marketing, many data targeting and measurement providers have relied on third-party cookies. But Google is planning to phase out third-party cookies by the end of 2024 and has already started rolling this out to 1% of users in Chrome.
However, the industry has anticipated the decline of third-party cookies at least since the implementation of GDPR in 2016. As a result, most sophisticated agencies and digital marketing offerings are now in a decent position.
What have we done so far to prepare clients?
For years building up to this, space150 has prepared our clients for the increase of privacy via the following:
- Prioritizing the Acquisition of Owned Data: We have encouraged clients to collect and utilize their data for onboarding and measurement since before GDPR. This approach involves using zero and first-party data, not relying on third-party data for remarketing, exclusion from targeting, and as seed audiences for lookalike models. For significant investments, it’s best practice to use a Customer Data Platform (CDP) like LiveRamp, Segment, or TransUnion, which can help target audiences online more effectively.
- Increased Use of Privacy-Safe Targeting: To complement first-party data, we are increasingly utilizing privacy-safe targeting methods. These include Unique IDs (UIDs) through key media partners, keyword/contextual targeting, a greater focus on programmatic supply strategy, and investment in walled gardens with strong machine-learning capabilities powered by conversions.
- More Walled Garden Investment: Walled gardens, such as Meta and TikTok, use their platform data, which is becoming increasingly compliant and safe from deprecation. They have prepared for this scenario by limiting predatory targeting and creating less granular targeting options. Additionally, implementing offerings they provide for privacy-safe data transfer, such as Google Enhanced Conversions, can help share data in ways that are both compliant and safe from deprecation. Targeting within these platforms has been re-engineered over the past four years to rely more on their owned data.
What are we doing now to ensure we are extraordinarily prepared?
- Media: Our media team has created an audit matrix that lists all current clients, targeting tactics, campaign management tactics (e.g., frequency capping), and campaign measurement that could potentially leverage third-party data. For each, we will ensure nothing is reliant on third-party cookies. Action plans are being created to address any areas of risk or non-compliance for implementation in Q1/Q2 2024.
- Engineering: Our engineering team has implemented cookie consent practices with best-in-class data privacy management solutions. This ensures greater transparency for consumers regarding the data being collected and by which platform. It also provides our clients with reliable regulatory compliance in an ever-changing landscape.
Who are the biggest losers when third-party cookies go away?
- The little guys: Small platforms, publishers, data providers, and marketers that don’t have enough scale or sophistication will see consolidation or fold.
- Increased costs for performance media channels: Driving performance will become more difficult and competitive as the number of available signals and parameters that feed algorithms are reduced.
- The programmatic ecosystem: This includes data sellers, DSPs, and websites reliant on programmatic revenue from behavioral targeting. The programmatic industry, which has heavily relied on third-party cookie targeting and measurement, has also been fraught with issues of fraud, inflated pricing, and questionable measurement. While the programmatic industry has responded to advertiser pressure for more transparency and third-party measurement of inventory and brand safety, the sophistication of these offerings varies. We recommend prioritizing transparency and third-party measurement, especially in preparation for cookie deprecation.
- Cross-platform tracking: Including the once-popular Multi-Touch Attribution sector. Many of these providers have moved more toward a hybrid Modeling approach that uses more aggregated data than real-time, and/or more pre/post or control/exposed testing.
In Conclusion
It’s clear that while challenges lie ahead, there are also plenty of opportunities to innovate and excel. By embracing first-party data, investing in privacy-friendly strategies, and leveraging the power of walled gardens, marketers can not only adapt but also thrive in this new era. The key is to stay informed, be agile, and never stop exploring new ways to connect with your audience. Together, we can turn the end of third-party cookies into the beginning of a more transparent, effective, and trust-based marketing future.
— Sarah Zielie (VP of Media), Bryan Feils (Associate Media Director), James Squires (Chief Technology Officer)
