Get ready for the cookieless future and the end of third-party cookies

Following Google’s 2020 announcement that it intended to ban third-party cookies, many marketers and sales professionals felt a sense of panic. They wondered how they would succeed in a cookieless world, especially since entire marketing and sales funnels were built around the use of third-party data.

The impending phase-out of third-party cookies will require a shift in online advertising and marketing strategies. While Google has pushed back the elimination several times since that web-shaking announcement, the end of cookies is a foregone conclusion.

As such, it’s vital to know how the change will affect your online advertising and marketing efforts, so you can adapt and adopt new methods of tracking users and collecting analytics data.

This article will lay out what a cookieless future could look like, discuss the impacts of doing away with cookies, and explain how you can prepare to succeed in the new digital environment. We’ll explore:

• What third-party cookies are
• Our cookieless future
• Phasing out third-party cookies
• The impact of the cookieless future
• How you can prepare for the end of third-party cookies

What are third-party cookies?

Third-party cookies are text files with small pieces of data used to identify a user’s computer and track behavior across websites.

Whereas first-party cookies are placed by the website a user is visiting, third-party cookies are placed and used by other sites the user isn’t currently on. Third-party cookies are used for cross-site tracking, retargeting, and serving curated ads to users based on previous browsing history and other online behavior.

Our cookieless future

Despite their usefulness for marketing and ad targeting, many major web browsers no longer support third-party cookies. Others, like Google Chrome, intend to ban cookies in the near future.

Google was the last major company to announce that they were ending support for third-party cookies. Safari, Firefox, and many others preceded Google by a year or more as part of ongoing efforts to support consumer privacy.

In the very near future, online marketers’ success will hinge on their readiness to go cookieless. Far from being left in the dark about consumers’ browsing and buying habits, they can use other methods and workarounds, such as device IDs or IP addresses, to engage in cross-site tracking and ad targeting.

Phasing out third-party cookies

A number of factors prompted Google to commit to going cookieless.

While Safari and Firefox’s decision to do away with third-party cookies certainly put pressure on Google, this wasn’t the underlying cause of the ban. Rather, third-party cookies are being phased out for the following reasons:

• Internet users want more privacy. While third-party cookies help advertisers target users with curated ads that are often timely and relevant, many consumers have concerns that these retargeting efforts are an invasion of their privacy. In fact, 86% of US consumers say data privacy is a growing concern. The same study found that 68% of respondents are concerned about the amount of data businesses collect, and 40% don’t trust companies to use their data in an ethical way.
• Users want more control over how their data is used. People aren’t just concerned about privacy — they also want more control over how and when their data is collected and used. When Apple began allowing users to prevent app tracking across other apps and websites, an overwhelming 96% of them opted out.
• Third-party cookies can pose a security risk. On their own, third-party cookies don’t pose a security risk to users. However, cybercriminals can use cookies to impersonate users, gather financial data, steal passwords, and engage in other nefarious online activities. Third-party cookies can also be used to spread malware.
• Regulators are cracking down on data collectors. Landmark pieces of legislation like the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) were among the first laws designed to protect consumer privacy. These laws and many others like them include stringent penalties and fine schedules. Google has paid hundreds of millions in fines for data privacy violations, which undoubtedly influenced its decision to ban third-party cookies.

Understanding these and other factors will help businesses adapt to the cookieless future.

The impact of the cookieless future

In the cookieless future, businesses will rely heavily on first-party data that they’ll gather through direct interactions with consumers on their apps and websites. They’ll also use durable identifiers like device IDs and email addresses to support cross-site tracking and ad retargeting efforts.

Here are some of the other likely impacts of phasing out third-party cookies:

Increased privacy for consumers

While marketers will bemoan the cookieless future, the third-party cookie ban is a win for consumer privacy.

Internet users will no longer have to worry about businesses tracking cross-site behavior without their knowledge or consent. Ultimately, they’ll have more control over what data is collected, how it’s used, and what sort of browsing experience they have.

Brands can capitalize on consumers’ sentiments toward data privacy by adopting more transparent data management practices. They can voluntarily phase out third-party cookies before Google’s ban takes effect and provide other information about their data usage policies.

For instance, businesses that don’t sell consumer data can relay this fact to site visitors, thereby demonstrating that they’re trustworthy stewards of the information they collect.

Personalized and targeted ads will be more limited

Personalized ads are a highly effective marketing tool, as they allow brands to target users with curated content based on their browsing history.

Personalized and targeted ads are particularly effective for ecommerce retailers, as they can use these tools to make product recommendations, increase average order value, and generate more profits.

The third-party cookie ban will significantly limit the scope and scale of personalized ads. Since brands will largely be relying on first-party data, they won’t have as many insights into consumers’ browsing and purchasing histories. This means that marketers will have to fill the void in their strategies with other ad-targeting techniques.

Less effective analytics based on third-party cookies

Third-party cookie-based analytics have already become markedly less effective since several browsers went cookieless. However, Google is by far the most widely used web browser, meaning its ban will have a tremendous impact on the efficacy of third-party cookie analytics.

To fill the gap, marketers must build new analytics strategies based on email marketing and other techniques. Businesses that aggregate and sell advertising data will also need to develop new ways of collecting user information.

While forward-thinking businesses are already exploring workarounds to support more efficient first-party data collection, there are no easy answers. As such, business leaders will need to adopt a multifaceted approach when rebuilding their analytics strategies.

Advertisers will need to find new ways to reach customers

The bottom line is advertisers that rely on third-party cookies will need to find new ways to reach customers within their target audience.

First-party data will be foundational to customer targeting in the cookieless future, as will social media platforms. The latter have evolved into mainstream marketing and sales tools that can help fill the gap created by the cookie ban.

Top platforms like TikTok, Instagram, Facebook, and Twitter include built-in activity tracking tools. Marketers can use insights gleaned from their social media pages to guide some customer outreach efforts.

Social media channels are also a great first-party data collection tool. Once this data is gathered on social media, marketers can apply it to other channels, including email.

How you can prepare for the end of third-party cookies

Despite the probable effects of the cookieless future, there are things your business can do to prepare and adapt. Here are a few strategies you should consider exploring.

Enhance conversion for web

Enhanced conversions is a Google Ads feature that helps you more accurately measure conversion rates. You can use these insights to guide bidding strategies by sending hashed first-party conversion data to Google in a privacy-friendly way.

When a customer converts on your site, you’ll likely receive first-party data like their name, address, phone number, and email address. This data is sent to Google in a hashed form and used to improve the measurement of online conversion from paid ads.

In addition to enhanced conversion for the web, Google also offers enhanced conversions for leads. This feature functions in a similar way but can assist with offline lead measurement as opposed to conversion tracking.

Engage in contextual advertising

Contextual advertising involves placing ads on a webpage based on its content. For instance, if you sell workout attire, you could place your ads on an article about the health benefits of regular exercise. Contextual advertising is performed by segmenting and targeting ad space based on website topic, keyword, or similar parameters.

While contextual advertising is similar to behavioral targeting, they aren’t one and the same.

When marketers target user behavior, they display ads according to actions the consumer has taken on other websites. With this method, you can target consumers with ads that aren’t remotely related to the content they’re actively browsing. Although effective, behavioral targeting involves cross-site tracking, which requires third-party cookies.

When you target context, you choose where to display your ads based on the consumer’s browsing environment. The topic and keyword targeting focuses on the webpage and its content, not the user’s browsing activity.

The downside to contextual advertising is that it isn’t as precise as behavioral targeting. On the bright side, it also doesn’t require third-party cookies, which makes it a viable replacement in the cookieless future of digital marketing.

Create cohorts

The third-party cookie ban will limit your ability to target specific audience members. However, you can use first-party data and other digital insights to target entire audience segments. To do that, you must first create cohorts. A cohort is a set of users who have been grouped together based on a shared attribute or identifier.

You can create cohorts based on virtually any criteria — including users’ geographic locations and when they last made a purchase. For instance, you could form a cohort entirely of users who live in New York City. Alternatively, you might create one composed of customers who all purchased the same product over the last month.

Once you’ve divided users into cohorts, you can target them with marketing content and more importantly, gauge the efficacy of your efforts. By doing so, you can get a holistic view of which actions are yielding desirable results and which channels are delivering a strong return on investment.

Since the cohort-based approach to user behavior tracking is less precise than third-party cookie methods, mastering this technique will require some trial and error. However, it can help fill the void in your analytics strategy and provide actionable insights about consumers.

Use alternative tracking methods

To reiterate, first-party cookies aren’t being sunsetted. When a user visits your site, you can deploy first-party cookies to monitor your behavior, gather analytics data, and power retargeting efforts.

First-party cookies represent the most useful tracking method in the cookieless future due to their versatility. That said, they aren’t the only tool you can deploy to gather data on your user base.

Along with first-party cookies, it’s wise to consider other alternative tracking tools, such as:

• IP addresses. You can use IP addresses to track users and gather information on households. By tracking IP addresses, you can determine how many unique devices are present within a home, gather browsing data, and obtain valuable insights about audience members.
• MAC addresses. A media access control (MAC) address is a 12-digit number that’s assigned to every device connected to a network. Since MAC addresses are usually assigned by manufacturers, they’re permanent identifiers that are unique to each device.
• Advertising ID. An advertising ID is a tool for identifying mobile devices and gathering user data. It can be shared with other third parties or sold to advertisers. Advertising IDs are a viable replacement for third-party cookies because of their shareability and tracking capabilities.
• Device fingerprints. Device fingerprints are created using a combination of attributes, including how the device is used and its particular configuration. A few attributes that may be included in a device fingerprint are IP addresses, time zone settings, language settings, and operating system.

When combined as part of a multi-pronged approach, these alternative tracking methods can serve as viable replacements for third-party cookies. Use them shrewdly, and your marketing efforts won’t suffer when third-party cookies finally go away for good.

Make sure you’re ready for the cookieless future

Preparing for the end of third-party cookies is vital to maintaining your online marketing efforts.

When you’re ready to begin the transition away from third-party cookies, check your analytics for any possible alternative identifiers you’re already collecting. These identifiers will give you a foundation to adapt away from third-party cookies while ensuring that you can provide your target audience with curated, engaging content.

Need to elevate your data collection and analysis capabilities to prepare for the cookieless future? Adobe Analytics helps you gather and analyze data from every point in the customer journey. Analytics allows you to segment your audience and uses machine learning to identify patterns in customer behavior.

Watch the overview video on Adobe Analytics or request a product demo to learn more about how Analytics can help your business thrive, even without the convenience of third-party cookies.