Google’s third-party cookies delay is a gift companies can’t afford to ignore
With Google’s recent announcement that it’s extending the testing window for its Privacy Sandbox before it disables third-party cookies in Chrome, some brands may be tempted to use this delay to double down on third-party cookie strategies. But research suggests this would be a mistake. While brands can (and will) continue to leverage third-party cookies to target consumers across the web, those that focus too heavily on third-party cookie strategies are leaving money on the table today — and saying “no” to the chance to gain a competitive advantage in the future.
A shrinking opportunity
Over the last 25 years, digital advertising and various personalization strategies were built on third-party cookies and mobile identifiers. Nearly all advertising use cases that involved personalization relied on these technologies. Over the past five years, however, the number of places that allow third-party cookies has shrunk significantly. Today, nearly 40% of the internet (via browsers) is cookie-free, and this doesn’t include walled gardens like Apple’s operating system environments like Facebook where third-party cookies do not work.
While it’s hard to quantify what’s not available, you don’t need fancy math to see just how many prospects and customers are out of reach for brands that rely too heavily on third-party cookies.
Overcoming the “if it isn’t broken...” mentality
For brands, the transition to a cookieless world can be intimidating. In 2020, Adobe conducted research that found only 37% of marketers and advertisers felt they could be successful in a cookieless world. In 2021 — after the first time Google announced it would delay the sunsetting of third-party cookies — we ran the research again. This time we found just 33% of marketers felt prepared.
The data might reflect the increased anxiety people often feel when we procrastinate. It’s also likely that marketers who are not evolving their strategies are starting to feel the real pain and missed opportunities of a shrinking market.
Companies are heavily invested in strategies and technologies dependent on third-party cookies. Marketers and their leaders know how to measure, report, and — most importantly — value the outcomes. And the benefits of change can feel abstract and far away.
Pair these very real obstacles of stagnant or shrinking budgets and the ongoing uncertainties brewing in the macro environment and there is a good, “if it isn’t broken, don’t fix it” argument for the status quo.
Advertising vs. experiences
While the third-party cookie narrative centers around advertisers and how they will reach customers outside of their owned domains, there is a larger story that goes far beyond digital ads: the cataclysmic shift already taking place in how brands engage with customers.
Today’s digitally astute customers know brands have their data and expect them to use it to make all brand experiences great. Whether they are searching for the first time, visiting a website for the 100th time, asking about their account balance, or cashing in on a loyalty offer, customers want brands to provide meaningful value at every step of their journey. A strategy confined to third-party cookies simply cannot do that.
Change is good
Alexander Graham Bell said that “The only difference between success and failure is the ability to take action.” Fortunately, every brand can take action. And there is a clear path to evolving your data strategy that will bring both short- and long-term benefits.
- First-party first
Brands that want to succeed in a cookieless world must make a deliberate choice to shift away from strategies centered on third-party cookies and toward a first-party data strategy. First-party data strategies prioritize customer consent and choice and focus on earning customers’ trust by delivering value early and often.
First-party data is owned by the brand, not rented or purchased from a third party, which gives companies a direct relationship with their customers and control over their own data destiny.
“All of the above” instead of “either/or”
While a first-party data mindset is critical, third-party cookies still have value. It is impractical and unwise to take an “either/or” approach. Brands can continue to leverage third-party data to introduce themselves to future customers through smart targeting while at the same time using the intelligence that comes from those activities to enrich their understanding of customers with whom they already have relationships. Brands that are not doing both are leaving behind untapped information.
Collaborate, collaborate, collaborate
A key part of an “all of the above” strategy should include data collaboration. Most vendors and consultancies continue to push and test first-party data strategies, but not all industries have the luxury of accessing a trove of durable identifiers. Collaborating with other brands within a consent-based environment can help build more compressive customer understanding than any one brand can do on its own.
Test and learn
During this in-between time, brands should develop new muscles by trying a variety of tactics — both those that have been around for years as well as innovative solutions that continue to emerge. Google’s Privacy Sandbox is a good example of how companies can work together to develop new practices that are good for their customers and their bottom lines.
No single company can successfully shift their data strategy alone. Engaging the right technology partner is a critical part of that journey. Look for vendors that can support de-siloing your data and help create a unified customer record that is actionable, and which will serve as the real-time source of truth for your customers and the cornerstone of successful personalization.
By giving brands more time before the last major third-party cookie environment shuts down for good, Google is offering a profound gift: the chance for companies to get it right. Brands that act now to build out a strong first-party data strategy based on consented data and a clear value exchange for their customers will significantly expand their opportunities to reach new prospects today and create a foundation for strong customer relationships based on trust and loyalty — setting them up for a successful future in times of both economic bounty and bust.