Rising consumer expectations are driving significant change in how we navigate privacy online – the death of third party cookies is a welcome beginning.
For many years, website owners have used third-party cookies to track users across the internet. These cookies allowed website owners to collect data about users’ online activity and target them with ads.
However, third-party cookies are now being phased out. Google announced that by 2023, its Chrome browser will no longer support third-party cookies sending ad agencies and ad tracking marketers reeling.
This is not the first time web browsers have attempted to get rid of third-party cookies to create a more free and open web. Mozilla Firefox started limiting third-party cookies in 2013. Apple’s Safari browser has also been blocking third-party cookies by default since 2017 which most recently sparked a public outrage from Facebook as this directly impacts advertising agencies’ ad revenue.
Controlling over 60% of the browser market, Google’s announcement to block third-party cookies is likely to be the final nail in the coffin for the use of third-party cookies to track users.
But will the death of third-party cookie data mean the end of targeted advertising? What will replace third-party cookies to generate ad revenue? This article explores these questions and more around the rapidly evolving regulatory restrictions debated by the interactive advertising bureau.
What Are Third-Party Cookies And How Do They Work?
Before we talk about the end of third-party cookies, it’s important to understand what a third-party cookie is and how they work.
Third-party cookies are basically pieces of code that are placed on your computer by a different website than the one you are visiting. This other website is the ‘third party.’ These cookies allow the website that placed them to track your online activity and social media platforms.
For example, if you are visiting website A, which has a banner ad from website B, website B will set a cookie on your browser. This is a third-party cookie.
Website B can use this cookie to track your activity as you move around the internet. They can see what other websites you visit and how long you spend on each website.
This is how third-party cookies work. When you visit a website, your web browser will send a request to the server for the website’s content.
The server will then send back the requested content, which includes any code for third-party cookies. Your web browser will then store the third-party cookie on your computer.
The next time you visit a website that has an online advertising banner ad from the same company, your web browser will send the cookie back to the server. This allows the company to track your online activity and collect important data such as demographics, interests, and even your location to target consumers.
First-Party Cookies Vs. Third-Party Cookies
First-party cookies are created by the website you visit. The website sends these cookies to your browser when you load the page.
Have you ever wondered how a website remembered your preferences or kept you logged in? First-party cookies are responsible for these functions.
First-party cookies can also be used for marketing purposes. For example, a website might use first-party cookies to track which pages you visit so that they can show you targeted ads.
Third-party cookies, on the other hand, are created by advertisers and other companies that have content embedded on the website you’re visiting as part of their data strategy to power advertising campaigns. This is also known as cross-site tracking.
For example, if you visit a news website that has ads from different companies, each of those companies will create its own third-party cookie on your browser. They will then acquire third-party cookie data and use it to understand your needs. Then, they will show ads that are tailored to your interests.
How Do Brands Currently Use Third-Party Cookies?
Brands use third-party cookies for many reasons, including:
Targeted Advertising
Targeted advertising is one of the most common uses for third-party cookies. By tracking people’s web browsing activity, brands can show ads that are more relevant to each individual person.
For example, if someone frequently visits car websites, they might see ads for cars on other websites that they visit. This is because the car company placed a cookie on the person’s browser so that they can track their web activity and show them targeted ads.
Remarketing
This is a type of targeted advertising that is used to reach people who have already shown an interest in your product or service.
For example, say someone visits your website but doesn’t make a purchase. You can use a third-party cookie to show them ads for your product on other websites that they visit.
This is called remarketing. It can be a very effective way to convert someone from a visitor into a customer.
Retargeting
Retargeting is similar to remarketing. However, it’s specifically used to target people who have already made a purchase from your website.
Here’s an example:
If someone buys a pair of shoes from your website, you can use retargeting to show them ads for other products that they might be interested in – like socks or shoe polish. This is a great way to upsell and cross-sell products to your existing customers.
Customer Segmentation
Customer segmentation is the process of dividing your customers into groups based on shared characteristics.
For example, you might segment your customers by age, gender, location, or interests. You can then use this information to create more targeted marketing campaigns that will appeal to your different segments.
Brands can use third-party cookies to track people’s web browsing activity and collect data for customer segmentation. As a result, they can send more targeted and relevant marketing messages to their customers.
Frequency Capping
Frequency capping is the process of limiting the number of times that someone sees an ad. This is usually done to prevent people from getting annoyed with too many ads.
Websites will often use frequency capping in conjunction with other targeting methods, such as retargeting. This ensures that people see relevant ads, but aren’t spammed with the same ad over and over again in a short space of time.
Third-party cookies can track how many times someone has seen an ad so that brands can effectively frequency cap their ads.
Conversion Tracking
Conversion tracking is a way to measure the effectiveness of a brand’s marketing campaigns. It allows them to track how many people who saw their ad ended up taking the desired action, such as making a purchase or signing up for a newsletter.
Brands can use this data to optimize their marketing campaigns and make sure that they’re getting a good return on investment.
Third-party cookies help brands to track conversions by placing a cookie on the browser of people who see their ads. They can then see how many people who saw the ad ended up taking the desired action.
Lead Generation
Lead generation is the process of collecting contact information from people who are interested in your product or service.
Businesses can use this data to follow up with potential customers and turn them into paying customers.
Using third-party cookies for lead generation is simple. Once someone visits a website, advertisers for another brand can place a third-party cookie on their browser. When they visit other websites that are part of the lead generation network, they will see ads for the other brand’s products or services. If they click on the ad and provide their contact information, the advertising brand will have generated a new lead.
Why Are Third-Party Cookies Going Away?
There are many reasons why Google and other browsers are phasing out third-party cookies. Here are some of the most important ones:
Privacy Concerns
According to a recent report, 72% of Americans believe that tech firms, like Google and Facebook, advertisers, and other companies collect too much data about them.
With third-party cookies, all sorts of websites can collect large amounts of data about our behaviour online. This includes the sites we visit, the searches we make, and the things we click on.
Most of this data is collected without our knowledge or consent. This has led to concerns about consumer privacy and how people’s personal data is being used.
The problem is not the amount of data collected but the sensitive nature of the data. This includes things like political views, credit card information, sexual orientation, and health information.
When websites collect this data without our consent, it feels as though our privacy is being invaded.
In response to these concerns, regulators have proposed new laws that give consumers more control over their data. One such law is the California Consumer Privacy Act (CCPA). Under this law, companies must get explicit consent from consumers before collecting, using, or sharing their data.
Other regulations, such as the European Union’s General Data Protection Regulation (GDPR), require website owners to place a popup on their site that asks visitors if they consent to have cookies placed on their devices.
Security Concerns
To meet rising consumer expectations to control their own data security and limit tracking data from Google ads and similar ad platforms is forcing a sweeping business model change in the ad market.
Another reason why third-party cookies are going away is that they pose a security risk. Hackers can use third-party cookies to track consumers online and steal their sensitive information, like login credentials and credit card numbers.
Malware, which is software that is used to damage or disable computers, can also be injected into websites through third-party cookies. This can infect a user’s device with viruses or give hackers access to their personal information.
Other types of viruses, like spyware, can be installed on a user’s device through third-party cookies. This type of software can track a user’s online activity and even record their keystrokes. Hackers can use the information collected by spyware to steal a person’s identity or commit fraud.
The Introduction of Google Sandbox
The phasing out of third-party cookies is in full support of the Google Privacy Sandbox. This is an initiative that Google announced in 2019 that aims to protect consumer privacy and make the web more private and secure.
Google’s Privacy Sandbox is a series of initiatives that include changes to the way Google Chrome handles cookies, as well as other features that will improve privacy on the web.
One of the most important initiatives is the introduction of Federated Learning of Cohorts (FLoC). FLoC is a new way of grouping internet users based on their interests. This will replace third-party cookies and allow advertisers to target ads without collecting personal data.
Some of the initiatives, such as the Google Consent Mode, have taken concrete form. Launched in 2020, Consent Mode requires publishers to get user consent before loading certain Google products that collect consumer data. This includes cookies and other tracking technologies from Google Analytics, ads personalization, and remarketing.
What To Know About Google’s Cookie Phase-Out
Google’s announcement in 2020 sent shockwaves throughout the online advertising industry. Third-party cookies have been around since the early days of the internet. And advertisers rely heavily on third-party cookie data. It enables them to track people across the web and gather data for ad targeting purposes.
But, Google’s move signals that things are about to change.
The move could upend the online advertising ecosystem and have a ripple effect on how consumers browse the web.
Third-party cookies are among the major tracking technologies used by ad tech companies. They revolve around mass data collection, whereby data brokers and other similar companies collect large amounts of data about people without their knowledge.
They also involve profiling and real-time bidding. These are the processes whereby data is used to target ads at individuals in real-time based on their browsing behaviour.
There are many types of personal data that one can glean from third-party cookies. This includes IP addresses, device IDs, browser fingerprints, religion, ethnicity, sexual orientation, and political views.
Advertisers and marketers can then use this to target ads and relevant content at people across the internet based on their personal information. The problem with this system is that it’s opaque and intrusive. Consumers have no way of knowing who is collecting their data or how it’s being used.
What’s more, there have been a number of high-profile data breaches in recent years that have involved third-party cookies. These incidents have called into question the safety and security of this system.
Due to these concerns, Google made the decision to phase out support for third-party cookies in the Google Chrome browser by the end of 2023.
Google Isn’t Banning All Cookies
It’s worth noting that Google’s decision to phase out third-party cookies doesn’t mean the end of all cookies.
First-party cookies, which are set by the website you’re visiting, will still be allowed. These cookies are used for essential purposes such as keeping you logged into your account or remembering items in your shopping cart.
First-party cookies pose far less of a user privacy risk. Companies and websites can’t use them to track you across the web. They only track basic information such as:
- your preferences
- the items you’ve viewed
- and the pages you visit on a website
Google Will Still Track People
Just because Google is doing away with third-party cookies doesn’t mean the company will stop tracking people online. In fact, Google will still be able to track people across the web using first-party cookies, fingerprinting, and other methods.
Trust Token API and FLoC will replace third-party cookies.
Trust Token API will be more secure as it will work on a cryptographic protocol. It will allow website owners to determine whether a user is legitimate. FLoC will be used to target ads and measure conversion.
Google says that the Trust Token API and FLoC are “privacy-preserving” methods of tracking people online. This means that the company will still be able to collect data about people, but it won’t be able to personally identify them. Also, these methods will be opt-in, so people will have to specifically allow Google to track them.
However, the proposal to use Trust Tokens means that users will have to give their personal information. This information will be processed on the user’s browser. Chrome will then use data, such as browsing history to segment users into flocks.
Flocks are groups of people with similar interests. The idea is that advertisers can target ads to flocks, rather than individual users. This means that ads will be less personalized. However, the upside is that users’ personal information will not be shared with advertisers.
Nonetheless, some personal information may still be shared with advertisers. This is where Google Consent Mode comes in. With it, users can choose whether or not to consent to data sharing.
We don’t yet know how effective Google’s new methods of tracking people will be. But, it’s clear that the company is still committed to collecting data about its users.
What’s Replacing Third-Party Cookies?
Now that we know the death of third-party cookies is inevitable, what will replace them?
Identity-Based Tracking
Identity-based tracking is a method of online tracking that uses personally identifiable information (PII) to track people across the web. PII includes information like your name, email address, and phone number.
This type of tracking comes with a wide range of perks for marketers and all players in the digital advertising industry. It allows businesses to target ads more effectively. It also makes it easier to measure the effectiveness of ads and track conversions.
For users, this method is less invasive than third-party cookies. However, it still raises privacy concerns because businesses will be able to collect PII about users. They can use this information to create detailed profiles of users. The profiles can then be sold to third parties without the user’s consent.
Google’s Browser-Based Model
As mentioned above, Google is working on a new browser-based model that will replace third-party cookies. This model is based on the Trust Token API and FLoC.
With the Trust Token API, Google wants to create a safe and secure environment for users while still allowing them to track their online activity. FLoC, on the other hand, is a new way of targeted advertising that uses users’ interests and behaviour to target ads.
Google has already started testing both of these new technologies. It plans to roll them out in the near future. But, not everyone is on board with these changes.
Critics argue that the Trust Token API and FLoC will only benefit Google and other large companies while harming small businesses and individual users. They also say that these new technologies will further increase the already vast amount of data that Google has on users.
First-Party Data
First-party data is data that a website or business collects about its own customers. This data includes things like purchase history, website activity, and email interactions.
Generally, first-party data is considered to be more accurate and valuable than third-party data.
With first-party data, companies can create more targeted and personalized ads. This is because they can gain a better understanding of their own customers’ interests and needs.
They can also use first-party data to improve their customer experience. For example, if a company knows that a customer frequently buys certain products, it can make recommendations or offer discounts on those products.
First-Party Data Vs. Third-Party Data
There are a few key differences between first-party data and third-party data.
First-party data is less likely to be inaccurate or misleading. This is because companies have more control over how it’s collected and used.
Third-party consumer data, on the other hand, is often less reliable than first-party data. This is because it’s collected from multiple sources and can be more easily manipulated. Third-party data can also be sold to the highest bidder, which means that companies may not have the same interests as their customers.
Another key difference is that first-party data is collected directly from the source. Third-party data is often collected indirectly. As such, companies have a better understanding of their own customers when they use first-party data.
But even with first-party data, there are some privacy concerns. For example, companies may not have the consent of their customers to collect and use this data. And if this data is leaked, it could be used to exploit or stalk people.
How The Death Of Third Party Cookies Impacts Web Design & Development
The death of third-party cookies has been a hot topic in the web design and development community for a while now.
Below are some of the most likely impacts the demise will have on web design and development.
Developers And Designers Will Have To Get More Creative
The death of third-party cookies means that developers and designers will have to get more creative with their website designs and features. They will need to find new ways to track user data and analytics. This could lead to some really innovative website designs that we haven’t seen before.
Creativity means that designers will have to think beyond the cookie. They will need to find other ways to identify users and track their behaviour. This might mean using web beacons, first-party cookies, or even fingerprinting techniques.
Websites May Become More Personalized
Without third-party cookies, websites may become more personalized. This means that website owners will have to collect data directly from their users. They can do this through surveys, polls, or even just asking users to input their preferences.
This could lead to a better user experience as users will feel like the websites they visit cater specifically to them.
Also, website owners will have a better understanding of their users, which could lead to more relevant and effective advertising.
A Focus On First-Party Data Collection
As first-party data becomes more important, web designers and developers will need to focus on clear data collection methods. This includes creating effective landing pages and opt-in forms for newsletter subscriptions.
By signing up for a deal or giving their contact details for your email list, users consent to you using their data.
Without third-party cookies, websites may become more intrusive. Web designers will need to find new ways to track consumer data and this could lead to more pop-ups and other intrusive features. This is not ideal for users but it may be necessary for website owners to get the data they need.
Websites Must Be Compliant With Relevant Privacy Laws
It’s important to design websites and opt-in forms in compliance with the privacy laws relevant to your site. This could be the GDPR or the CCPA.
Developers and designers will need to do their homework and make sure that they are up to date with the latest compliance regulations.
They will need to have clear information on how the site uses the data they collect and what data they collect.
In addition, they may need to adjust opt-in forms to ensure they gain explicit consent from users and make sure that data is collected in a privacy-friendly way.
How The End of Third-Party Cookies Impacts Digital Marketing
Apart from developers and designers, the death of third-party cookies will also impact digital marketers and the advertising industry in many ways.
Marketers Will Have To Rely More On First-Party Data
First-party data will become increasingly important for marketers. They will no longer be able to rely on third-party cookies for ad targeting and measurement. Marketers will need to find new ways to collect and own first-party data, such as through sign-ups, surveys, and polls.
They can then use this data for targeted advertising, personalization, and analytics. However, marketers will need to work extra hard to ensure that they are collecting high-quality data that is relevant to their target audience.
They will also need to be more careful about how they use this data, as first-party data is subject to stricter privacy regulations than third-party data.
Advertisers Will Need To Shift Their Focus To Contextual Advertising
Contextual advertising is a form of advertising that takes into account the context of the content that is being displayed. For example, if a user is reading an article about cars, they may see ads for car dealerships or car parts.
Contextual advertising is an effective advertising strategy that doesn’t rely on personal data. So, players in the advertising industry will still be able to reach their target audience, even without third-party cookies.
The downside of contextual digital advertising is that it is less effective at converting leads into customers. This is because the ads are not as personalized as targeted ads.
Marketers Will Have To Shift Their Focus To Other Channels
When it comes to digital marketing, most marketers are used to relying on cookies to create targeted ads and marketing strategies. With the death of third-party cookies, marketers will need to shift their focus to other channels, such as email marketing and social media. This is because these channels are not as reliant on cookies.
Marketers will need to find new ways to measure the success of their campaigns, such as through A/B testing and surveys. They will have to experiment with different types of content to see what works best for their audience.
Marketers Will Have To Invest In New Technologies
The death of third-party cookies will also force marketers to invest in new technologies, such as identity management solutions and customer data platforms (CDPs).
These technologies will help marketers collect, manage, and use first-party data for ad targeting. They will also help marketers keep track of their customer journeys. This is important because it will allow marketers to create more personalized experiences for their customers.
Final Thoughts
There is no doubt the death of third-party cookies will have a big impact on the digital advertising landscape. Many small businesses rely on third-party cookies to target their advertising and, without them, they will have to find other ways to reach their audience.
The good news is that there are many options available and with a little creativity, businesses can still be successful. The key is to stay up-to-date on the latest changes and to be willing to adapt.
Even though there is still time before third-party cookies are phased out, it’s important to start preparing now. By doing so, you can make sure your business is ready for the change. This way, you can avoid any disruptions in your digital advertising and continue to reach your target audience.
