The End of Third-Party Cookies
What does it mean for marketers in the world of cookieless Chrome?
My career starts with an ad tech company.
The company is a Demand-Side Platform (DSP) specialized in display advertising (yes, we’re the one who targets you with pop-up banner ads and stalks you from site to site).
“Targeting the right people at the right time and place with the right message” was the sentence I always used to describe the business with my non-advertising background friends and potential clients at the trade shows.
“Okay.. so how do you do that?” was the most frequent question I got from those who were keen to know more.
“Cookies. We use these small snippets of code to track you as you browse around the internet and build a profile of you, including gender, interest, and purchase behavior, etc. Then display relevant ads based on your individual audience profile.” — that was my go-to explanation back then.
In particular, third-party cookies allow the ad tech companies (like my previous employer) to gain some market share and enable the revenue stream to flow. I thought it was the foundation for ad targeting and didn’t question if the method would change.
But it wasn’t the case…
I was so surprised when Google announced earlier this month that Google Chrome is eliminating third-party cookies and won’t be building “alternative identifiers to track individuals as they browse across the web, nor will we use them in our products”.
As the public is becoming more aware of privacy issues and regulators are passing more privacy laws, Google believes this move would be a step forward for the privacy-first world. The hope is to block all third-party cookies from Chrome by 2022.
Why does it matter?
Although Chrome is not the first browser to phrase out third-party cookies, it’s the biggest. In 2020, Chrome accounts for 68% of desktop web browser traffic share worldwide, according to eMarketer. Chrome also made up more than 61% of mobile browser traffic share worldwide.
With the scale of Chrome’s market share, the change is going to impact the current ad tech ecosystem. The move will risk the smaller advertising firms rely on third-party cookies out of the business and could harm publishers that rely on display ads to generate revenue.
Sounds scary, right?
It will force ad companies that rely on third-party cookies to seek alternative ways to target users (I hope my previous employer has already found a way out). Those companies will need to develop alternative tools that more heavily leverage first-party cookies and create visitor profiles into more anonymous “segments”, which is similar to what Google’s Privacy Sandbox is predicted to do.
Privacy Sandbox for interest-based advertising (FLoC) is the alternative plan that Google is pitching in the cookieless future. It’s an initiative to personalize ads based on the “cohort” that the users in while still preserving user privacy.
Some questions the motivation of Google to phrase third-party cookies out — whether it’s to improve privacy or to “gain a further grip on the market by forcing the adoption of Chrome’s own first-party cookie”. No matter what, it’s true that the biggest ad tech platforms are the biggest winner after all. Such change very likely leads more advertising money to spend on platforms such as Facebook, TikTok, and YouTube, where “targeting within a closed system will be easier”.
What should marketers do?
Besides leveraging first-party cookies, marketers will need to develop new strategies for prospecting and rely more heavily on other tactics. We could revitalize older strategies, like contextual advertising. This allows advertisers to “circulate PPC ads on websites that rank for similar keywords as your ad”.
Additionally, publishers might consider content commerce, or better connecting audiences to sales through content. As an article from AdExchanger points out — “The absence of cookie means that content is king again”.
The advertising industry is actively looking for solutions to determine what will happen next. As a marketer, the best thing we could do now is staying up-to-date about the news relating to third-party cookies and other privacy issues.
Being “agile” and “innovative” are the key characteristics of a successful marketer — we need to constantly ask ourself “Are we too reliant on this technology?” and “Do we have alternatives to prepare for the change?”
Five years ago, who would expect that third-party cookies will soon come to an end?
