A Cookieless Future: Why Marketers Should Find New Ways to Personalize without Compromise

Answer me this. Let’s say you spent a whole day browsing through a couple of websites to prepare for your upcoming vacation to Bali. In subsequent days, have you ever noticed Bali vacation ads randomly popping up all over your browser?

Well, this is an example of the use of third-party cookies.

Now, imagine that those not-so-random ads start disappearing and you no longer see such relevant messages. That’s what may happen at the end of 2024 when search engine powerhouse, Google, plans to ban such cookies.

Google Planning to Ban Third-Party Cookies by the End of 2024 (Source: AdAge)

Before we dive deeper, let’s start with formal definitions:

• Cookies: Small text files containing unique data, typically including an identifier and site name, that identify your computer to the network. If you’ve provided additional information to the site (e.g., your name, address, email, etc.), they may include such personally identifiable information as well.
• Third-Party Cookies: Cookies set by a website other than the one you are currently on. They are mostly used to track users and display more relevant ads between websites.

Though cookies are useful tools for creating a smooth internet experience, they raise a rising concern for privacy due to how they track browsing activity and collect personal data. Nowadays, with the introduction of more privacy regulations, marketers are finding it increasingly difficult to track users and personalize marketing messages.

To better understand the implications of a cookieless future, the below outlines some potential positives and negatives that both users and marketers may experience.

For Users…

The Positives

1. Privacy Protection & Data Security
   When users browse the internet, cookie-enabled sites track and record their online activity, storing the data as text files. As such information can be easily accessed by any third party, hackers may potentially view and steal user data for fraudulent purposes. With 81% of Americans believing that the potential risks of data collection by companies outweigh its benefits, the end of cookie tracking may provide them with a greater sense of security.
2. Potentially Faster Browser Activity
   As users surf the web, more and more cookies will be accumulated. Unless deleted, such cookies will become part of their hard drive space, eventually lagging browser activity. A cookieless world would hence be beneficial to search engine speeds.
3. Potential for a More Trustworthy Future of Digital Ads
   As cookies are not transparent, users often don’t know what information is being shared and how it’s being used. A cookieless future then presents an opportunity for advertisers to develop a better, more transparent, foundation for digital ads that consumers can trust better.

The Negatives

1. Less Convenience
   In today’s fast-paced world, consumers strive for convenience in every aspect of their lives. Auto-fill options on websites are only made possible by cookies, which remember data from users’ previous visit(s). Should they disappear, such convenience would no longer be available.
2. Less Relevant Ads
   One of the main reasons why consumers dislike ads is due to common irrelevance. Currently, even with cookies still available, 44% of users find the ads they receive to be irrelevant to their wants and needs. Without cookies, this number is sure to heighten.
3. Less Personalization
   According to a 2021 McKinsey report, 71% of consumers expect personalization, and 76% get frustrated when it doesn’t happen. Should cookies disappear, the frustration numbers would rise as such personalization would be more difficult to achieve.

For Marketers…

The Positives

1. Alternatives May Provide Higher Data Visibility
   Cookie tracking platforms have various drawbacks when it comes to showing the right data needed for marketing use. As cookies can duplicate visitors but show them as unique users, valuable data is often lost. Consequently, such platforms are only able to provide about 60% of visitor data. Alternatively, cookieless tracking channels, such as those utilizing artificial intelligence, have the ability to provide firms with 100% of their visitor data. This cookieless future might hence be an opportunity for more reliable data collection solutions.
2. Potential Gains in Consumer Trust
   In a cookieless future, an alternate method of collecting data would be directly requesting consumers for it. As firms would have to give consumers more control and offer them more transparency around data collection, it might aid in building trust, allowing for a stronger overall relationship.
3. Potential Cost Savings
   With third-party cookies, many times, marketers are misled to believe that more targeting directly equals better sales. However, according to Forbes, when big brands paused their digital ad spend, nothing much changed. For example, Chase found that showing ads on 400,000 websites yielded no better outcomes for them than showing ads on 5,000 sites. The reality is that in today’s highly tech-savvy world, a lot of site “users” are bots, meaning that Chase had probably been purchasing much of their traffic all along. A cookieless world would force firms to more comprehensively reallocate their resources, potentially allowing for lower costs.

The Negatives

1. Potentially Lower Profitability
   With the threat of a cookieless world, 44% of marketers predict a need to increase spending by 5% to reach the same goals as they did in 2021. Increased spending and stagnant revenues could hence likely lead to lower profitability.
2. Many Might be Left Behind
   Currently, 75% of marketers still rely heavily on third-party cookies. As it might take a lot of time and money for firms to figure out another method of effectively collecting consumer data, there is a high risk that many may be left behind, unprepared to face the new reality.
3. Potentially Higher Customer Turnover Rate
   Without cookies, marketers may find it more difficult to collect consumer data, making it unlikely that they will be able to offer the same level of convenience, relevance, and personalization as they used to. This may potentially lead to frustrated users and a higher customer turnover rate.

The Verdict…

While seemingly scary now, this cookieless future could ultimately result in a better, more dependable digital ecosystem that will benefit both users and marketers. Though it may pose challenges to marketers at first, it also pushes them to find new ways of enhancing personalization without compromising user privacy and data security. As such, with this potentially brighter future, I am personally for this cookieless world.

Do you agree? Let me know your thoughts.