The future of digital advertising in the cookieless world and the importance of 1st party data

We all love cookies, sometimes we can find them with chocolate, butter or even with ginger. From a digital point of view, cookies do not have such a good reputation. Cookies are small files of data that a web server generates and sends to a browser which, afterwards, inform websites about the user, allowing the websites to personalize the user experience. We can differentiate 2 types of cookies:

1st party cookies: Are created by the website a user visits and collects information about that user, such as username, passwords, language preference, payment method and items in a shopping cart. Thanks to this, the website does not have to ask the user to enter his information every time he returns, it can also make product suggestions based on his preferences and offer a better browsing experience.

3rd Party cookies: Are created by a domain other than the one the user is visiting, and it is usually related with digital advertising. Main functions of these cookies are cross-site targeting, retargeting, ad serving or reach and frequency measurement.

The use of cookies has been crucial for digital marketers during these past years. We use them to improve user experience, to collect data, to track what visitors are doing on our website, etc. Cookies help us to target the perfect advertisement to the right audience and personalize user experience across all digital channels. It also plays a key role in assigning conversions to the channel that drove them which is essential for good campaign optimization. Nowadays, competing in the open market for a position in the search page results is difficult but if you cannot track your performance, it is almost impossible to make it work.

3rd party cookies will “soon” be removed from the digital marketing landscape. At least, this is the plan. Some of Google’s main competitors, Safari and Mozilla Firefox, have already removed them and Google was planning to do so sometime this year. However, they have postponed it till 2023. Seems that they need more time to adapt to all these advertising ecosystems to not harm themselves too much. This makes total sense considering that a big percentage of Google’s revenue comes from advertising. Vinay Goel (privacy engineering director of Chrome), confirms it: “While there’s considerable progress with this initiative, it’s become clear that more time is needed across the ecosystem to get this right.”

As an alternative to what we advertisers would call a “cookieless world”, what Google proposes is the Privacy Sandbox. Privacy Sandbox is a group of standards that ensure protection of the privacy of all users, but at the same time guarantees the personalization of their ads. One of its more interesting ideas is the “Floc” (Federated Learning of Cohorts). What it does is collect information about browsing habits to assign each user into a specific group/flock considering their browsing histories and habits. Doing this we are not using the users as individuals that we can identify but as part of a group.

With all these changes going on, it is still uncertain how it will affect our marketing strategies. Therefore 1st party cookies become even more important. With first-party cookies we discover what users are doing while visiting our website. We are talking about returning users, which makes them extremely valuable due to the fact they are likely to know and like our brand. Therefore, we can use all this information to create relevant marketing campaigns for every user.

Since October 2019, Europe’s top court has forced all the websites to have explicit consent of the users before storing or accessing non-essential 1st party cookies, such as tracking cookies for advertising or analytical purposes. If we have a look back, it has been a long path from where we started to where we are now. (Data from gdpr.eu).

• In 1994 the first banner ad appeared online.
• In 1995 it passed the European Data Protection Directive, establishing minimum data privacy and security standards, upon which each member state based its own implementing law.
• In 2012 the proposal for the GDPR was released.
• In 2016 the GDPR entered into force in 2016 after passing the European Parliament.
• In 2018 all organizations were required to be compliant.
• In 2019 Organizations are forced to have explicit consent before storing non-essential 1st party cookies.

Seems like a lot of legal and technical information that should not affect us at all, you would think. However, have you noticed that all web browsing is constantly interrupted by huge pop-up banners that ask your explicit permission for tracking your activities on the websites? This is how the 2019 resolution directly and indirectly affects all of us, as users decide the level of privacy that they want to concede to each website. This of course is a huge accomplishment to restoring our online privacy, but at the same time, it makes it a lot more difficult for us marketers to analyze the performance of marketing channels when users decline consent because we lose track of all their actions on our web. While we are counting the cost and clicks from google ads, we still may lose crucial information on website conversions. Therefore, we have less information and relevant signals to nurture machine learning algorithms for bidding and optimization.

To solve that problem, google has developed a tool called “google consent mode.” This allows you to adjust how your Google tags (Google Tags are tags that we implement in the website source code, whose objective is to send information to the measurement platforms) behave based on the consent status of your users. The data will be observed as normal if the user gives consent. When users do not give their explicit consent for tracking and storing their information, the relevant Google tags will adjust their functions and model user behavior, which will then show the most accurate data in your Google Ads account adding the extra conversions not tracked to enable better reporting and optimization for marketing purposes.

In Tui Musement, with the support of our Google account managers, we were able to implement Google Consent Mode in April 2021 with the help of our IT team. They adjusted and updated tags behavior in Google Tag Manager adding javascript codes, so that the users of Musement websites were split into two groups: those who accepted cookies and those who did not. Extra parameters were then also added to the tags, so that they could report aggregated data to our tracking platforms as opposed to no data at all (without using the feature) of people who opted out of cookies.

By setting up Consent Mode in our accounts we achieved an increase in measured conversions of 5,3% in IT, +3,9% in DE, +3,4% in FR, +25% in ES, +9,1% in GB, resulting in a decrease of the lost data impact on *smart bidding algorithms. Our campaigns were able to receive more relevant signals from Google and website conversions and the impact of each campaign was much more visible. Being this quite a substantial uplift in campaigns metrics reporting, Google also drew up a case study to showcase our success and inspire more companies like Musement to achieve better results in their campaign performance.

*Smart bidding are automated strategies that uses machine learning to optimize the advertising bidding considering historical data and then optimizing it accordingly in each auction.