ON THE END OF THIRD-PARTY COOKIES — TAKE TWO
4 February 2022|Advertising, AI and Machine Learning, Audience, First-party data, Programmatic, Targeting
Preservation of personal privacy and security, and how personal data is used by third parties, is an ongoing issue that concerns most internet users. It resulted in the EU’s GDPR regulation in 2018 and California’s CCPA in 2020. In 2017, Apple’s Safari became the first major browser to block third-party cookies by default, followed by Mozilla’s Firefox in 2019. Since announcing their Privacy Sandbox initiative in 2019, Google has been planning the removal of third-party cookies from Chrome, now expected by the end of 2023.
THE END OF THIRD-PARTY COOKIES
Third-party cookies do not belong to the owner of the site that a user visits. They are widely used by ad tech providers for cross-site tracking of individuals, and they play a big role in how ads are targeted and served on the internet. Removing third-party cookies without a suitable replacement runs the risk of reducing ad revenues for online publishers. A 2019 Google study into publisher web sites found that cookie-less traffic resulted in 52% less revenue for the publishers than traffic where a cookie was present.
Google’s original plan was to replace the use of third-party cookies in Chrome with FLoC (Federated Learning of Cohorts), allowing advertisers to target ads based on user ‘cohorts’ based on browsing habits. Targeting would be based on interest groups of people who visited similar sites to each other. Machine learned algorithms would allocate users to FLoC groups as they browsed. This approach has now been abandoned following ongoing privacy concerns and issues relating to algorithm bias, discrimination, and fairness. In January 2022 Google announced that FLoC has been replaced by Topics, a new proposed alternative to cookies.
Topics allows advertisers to target ads based on user interests as follows:
- The browser determines “a handful of” interest-based topics each week, for example “Fitness” or “Travel & Transportation,” that represent each users’ top interests for the week based on their browsing history.
- Topics are curated by Google to “exclude sensitive categories such as gender or race”. The browser will use a set of topics selected from this human-curated, publicly visible list. The proposed Topics list currently contains around 350 topics to reduce the risk of fingerprinting.
- Topics are kept for three weeks, old topics are deleted.
- When a user visits a participating site, Topics picks three topics, one from each of the past three weeks, to share with the site and its advertising partners.
- There are two main parts to Topics: i) Each website is labelled with a high-level topic. For example, the browser would match a sports website with the topic “Sports”. ii) The browser collects most frequent topics associated with websites visited. These topics are then shared (one new topic per week) with the sites visited.
- Specific sites visited by a user will no longer be shared across the web, like they might have been with third-party cookies.
- Users can see assigned topics, remove topics, or disable the feature completely.
THE RISE OF FIRST-PARTY DATA
The end of third-party cookies is likely to result in greater use of first-party data for targeting advertising. First-party data, including first-party cookies, belong to the owner of the site that a user visits. For publishers, first-party data is all data associated with user log-ins (subscriber/user registrations and subscriptions) and user profiles and all first-party cookies that can be used to capture what people visit and do on their owned sites. Publishers can use their own first-party data to target advertising for visitors to their sites based on the content that they view and the actions they take on the site.
The rise of first-party data may deliver benefits for publishers and advertisers. Some of these could be:
- Less fraud, greater transparency and accountability.
- Greater user privacy and personal control over privacy.
- Greater brand safety.
- Less spam for users.
- Greater/easier compliance with regulation.
- Content improvement, a growing focus on premium content, a better and safer context for ads.
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