Technology is finally becoming more security centric. Google is planning to stop the use of third-party cookies in Chrome by the end of next year. Safari and Firefox, already block them by default.
But what are cookies? How do they affect your privacy? And how will their decommissioning change advertising?
Know your cookies
Let’s start with why they are actually called cookies. The term “cookie” was coined by a web-browser programmer called Lou Montulli. This was derived from the term “magic cookie” which is a packet of unchanged data sent and received by a Unix program.
Now let’s take a look at what cookies actually are. A first-party cookie is placed on a website by the owner of that website to collect information about visitors to the site. They are frequently used to improve user experience, but also to allow the site to save information about the user for a later date.
A third-party cookie is placed on a website by someone other than the website owner (i.e. a third-party) and collects data for that third-party. As with standard cookies, they are used to remember information about visitors to the site, but are mostly used by advertising networks to monitor online activity, by tracking consumers around the web, used for behavioural targeting.
For instance, a user visits a website called localsports.com. Cookies placed on the website by the owners of the site are first-party cookies. Cookies placed on the site by a company advertising trainers, who want to target visitors to sports websites, are third-party cookies.
Third-party cookies can pose a significant security risk and some users consider them as infringing on their privacy. This is because, whilst they are not dangerous in themselves, they can be hijacked to gain a user’s information.
What are the implications of a cookie free world?
There are many issues facing advertisers without third-party cookie data.
One of the biggest problems advertisers will face, is how to measure the performance of ad campaigns.
Understanding buyer intent is another main reason advertisers use third-party cookies. Without these cookies delivering a personalised experience will be much more difficult to achieve.
Another issue, is that cookies prevent users from seeing the same ads repeatedly, these changes will make it more difficult to monitor how often an ad was served.
How to make the most of a cookie free market
There are three possible marketing scenarios that are likely to emerge from a cookie free market:
1. Walled Gardens
First-party cookies will continue to play a key role for big corporate social media platforms, allowing them to gather vast amounts of data, and forming “walled gardens”, leaving smaller independents to struggle.
To counter this, companies should start to grow their own first-party data strategy. For example, you can gather information from your users via your website, collected via surveys, or collected via an ad agency.
It will also be worth monitoring announcements by big providers such as Privacy Sandbox by Google, for new “post-cookie” advertising solutions.
2. Consent Economy
In this scenario, legal centres will keep checks on the larger platforms ability to utilise customer data. This will result in a strong consent economy that favours trusted publishers. To cope with this scenario, partner your business with large, trusted publishers that collect first-party data.
3. Identity Innovation
In this final possible scenario, further improved data governance will lead to new types of digital identity powered by new technologies such as virtual personal assistants (VPAs) and blockchain. This will remove the need for site level consent.
To equip your business for this possibility, try contextual advertising that focuses on a particular webpage instead of the user. This means that marketers can position ads based on the content of the page, rather than who visits. Which still creates personalised marketing without the need for consent.
Undoubtedly the loss of third-party cookie data will shake up the marketing world. Advertisers will have to rethink and reconstruct their marketing strategies from the ground up, which will ultimately produce a better user experience.