Marketing After the Death of the Third-Party Cookie

Do you trust your data and its relevance to your campaign? For marketers, the most crucial point is to have the correct and specific data for well-defined targeting with high accuracy. What will happen if you can no longer target with such precision?

Every once in awhile Google tends to drop a bomb with its announcements. It was a grave situation for the advertising world when Google startled everyone by stating that they will be eliminating the third-party cookies in their Chrome web browser.

I can see that your face is changing its color, don't panic just yet, this will occur progressively over the next two years.

What Exactly Are Cookies?

As you are browsing the internet, you have most certainly seen a question asking you if you are okay with the website's usage of cookies to improve your overall user experience.

What cookies are doing is that they are retaining the website's configuration. This includes login details, language, and products added to the cart. The information is stored even after the user leaves the site.

These cookie files are popularly used to collect certain pieces of information. They are also used for advertising processes like behavioral profiling and retargeting. Understanding the role of cookies in advertising technology is crucial to getting a better hold on online advertising and privacy.

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Over the years, cookies have become the livelihood of the internet. They are currently the most common method of recognizing users online. This helps with the provision of the personalized browsing experience.

With growing awareness of privacy issues comes a stronger need to educate users about what cookie files can contain, and what types of cookies exist. The main difference between the first and third-party cookies is their setting.

  • First-party cookies are set by the publisher's web server. These cookies collect the data about your customers or audience, and this data is owned and managed by you. The information comes from your website or app, purchases or any other data given with the consent of the user.

  • Third-party cookies are set by a third-party server, such as an AdTech vendor, via code, loaded on the publisher’s website. These cookies are generally aggregated from many different sources and provide a plethora of data. The information that comes from third-party cookies is based on past user behavior and not on data provided explicitly by the user.

Third-party cookies have been a tracking method used by advertisers and advertising platforms for decades. This data has behavioral profiles of users such as interests, patterns of browsing activities, hobbies or preferences which allows incredible reach.

The Elimination of Third-Party Cookies Means Advertisers Will No Longer Be Able to Track Consumers in the Same Way

First-party cookies are supported by all browsers and can be blocked or deleted by the user. Third-party cookies are supported by all browsers, but many are blocking the creation of third-party cookies by default. Users are also taking matters into their own hands and deleting third-party cookies on their own.

How Will Google’s Decision Affect the Advertising World?

As the death of the third-party cookie is right around the corner, publishers and marketers are plotting different ways of identifying users to target and serve ads to.

After the decision, Google has asked for the advertising and publishing industries’ feedback. This created a cookie conundrum. After all, Google's decision affects how digital advertising will look in the future.

Some sides are saying that they have stopped "crunching" this third-party cookie a few years ago because the data they were getting was quite inaccurate. So, they focused on their first-party "cookie batch" to grow their business.

Even though some businesses have opted out, a lot of them are still relying on the third-party cookie to get the necessary data for advertising. This means that third-party data business is no joke.

Moreover, according to Ryan Pauley, Vox Media’s chief revenue officer, they have built a $19 billion industry by inserting themselves between publishers and advertisers. That's one big slice of the pie! A slice you as a publisher won't be getting.

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The third-party cookies are already blocked on Safari and Firefox browsers. This stops companies from monitoring user behavior across the web. So, what will happen if this occurs on Google Chrome?

Google already made an experiment and shared their results. They ran a randomized controlled experiment on publishers who use the programmatic arm of Google Ad Manager’s serving system, in which a Google service places ads on non-Google sites across the web.

They disabled access to cookies for a small fraction of randomly selected users and observed. The targeted users saw only non-personalized ads that did not rely on the presence of third-party cookies.

revenue

From the results, we can see that only a handful of publishers had a small revenue loss (<10%). The majority of publishers have losses of 50% or more, with some losing over 75% of their revenue.

In addition to this, users expressed greater dissatisfaction with non-personalized ads because they were not interested in what the ads were showing them. Google's experiment saw a 21% increase in user clicks to close an ad. When prompted with a list of reasons why they wanted to stop seeing the ad, there was a 21% increase in user clicks on the reason “Not interested in this ad” and a 29% increase in user clicks on the reason “Seen this ad multiple times”.

So does this mean that removing third-party cookies could lead to decreased ad spend on personalized ads and moving budgets to different channels? And will publishers have to adapt their business models when third-party cookies are disabled?

Accurately answering these questions is not possible. All that's left is for each business to individually think about how this will affect their success in the future.

Life After the Cookie

If you want to monetize your inventory sufficiently even after the death of cookies, what exactly should you do?

Let's say that you own an eCommerce site that sells socks. First of all, you need to conduct a scrupulous audit of your audience. This will help you get the bigger picture of who your consumers are. Keep in mind some of the following things when conducting your audit:

  • How are users reacting to the content you provide?
  • Are you producing valuable information for your users? (e.g. Gift guide for buying socks, Different types of socks for winter/summer)
  • Are they loyal visitors, regular buyers, or rather one-time guests?
  • Is your website dedicated to a tight group, or does it have scope for everyone's feet? (e.g. children's socks, socks for sports, socks for men and women, funny designed socks)

It is only on this basis that you can decide which adaptation strategy will result in the highest revenue retention, and in the long run, a wide range of customers whose feet are well taken care of.

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Contextual Advertising

Industry experts are advising to consider solutions such as contextual advertising, which should compensate for the possible loss of advertising results.

Contextual advertising is the placement of ad campaigns on websites or site pages that are directly relevant to the product's ad you are running. If you’re selling socks, for example, you might try to have the ad placed on sites about casual outfit, or footwear.

The idea is that people who are interested in getting advice for their style or buying new shoes are more likely to want to buy a pair of socks to match their new Converse than someone on a site about home remodeling. An interested audience usually means more conversions, so contextual advertising can be a great start!

In other words, using data that is connected with personal browsing history, location history, and personal interests to track users will top. The focus will be on the type of content a user is currently consuming.

Overview

There’s no running from the fact that third-party cookies have finally been given an expiration date.

Aren't we all always in search of something better? In my opinion, this is far from being the end of advertising in the digital world. It's just an advancement that will give us a chance to make more robust choices.

Through implementing secure data management approaches, publishers can meet addressable ads and become profoundly competitive players in the industry.

It's selfish to think only about conversion rates without stopping to think about how the internet user feels. What about the type of data that's being collected? There are many different bells and whistles involved, but the general idea is that privacy and protection of personal data is something that all ad platforms now need to take seriously.

It's a Wrap!

To sum up, after Safari and Firefox led the way, it is now Google Chrome's turn to take the next step and protect users’ data from questionable players in the ad tech ecosystem.

Oh, and one thing's certain, the GDPR (General Data Protection Regulation) will most definitely hit thumbs up on this idea.