Online tracking has been a staple of the digital landscape for years and one of its key components has been the use of third-party cookies. However, leading browsers, including Google Chrome, are phasing out third-party cookies by early 2024.
In this blog post, we’ll delve into what third-party cookies are, their functionalities and address concerns and solutions for the future.
What are Third-Party Cookies?
Third-party cookies are snippets of code placed on various websites by external domains to track and analyse users’ online activities. They have been instrumental in shaping personalised customer experiences and refining ad targeting by collecting user data, including demographics, location and browsing behaviour.
How They Work:
When a user visits a website, a third-party cookie is placed by an external service, such as Google Ads. This cookie then tracks the user’s actions and preferences. Later, when the user visits another site, the embedded third-party cookie triggers targeted ads based on the previously collected data.
How are Third-Party Cookies Created?
For a third-party cookie to be created on a different website, a request must be sent between the web page and the third-party server. This request can take the form of an ad, a tracking pixel, or other formats, all facilitating data collection.
Why are Third-Party Cookies Going Away?
Growing privacy concerns have led to a shift away from third-party cookies. Google’s decision to phase out these cookies in Chrome by early 2024 is a significant development. Originally planned for late 2023, the extension of the deadline stems from the need for further testing and feedback.
In response to the impending phase-out, Google is building the Privacy Sandbox—a less intrusive alternative to third-party cookies. This move aims to address privacy concerns while still allowing for targeted advertising. Alternative services like Smart Shopping or Performance Max may also become essential for businesses seeking to enhance their advertising effectiveness.
Implications once third-party cookies are removed
As third-party cookies diminish, a reliance on first-party cookies is inevitable. This shift favours larger organisations with more substantial traffic and resources for the development of first-party data. First-party cookies will likely become the primary approach for adapting to the changing landscape initiated by Google.
Other implications and recommendations for Advertisers:
Reduced Targeting Precision: Without third-party cookies, precisely targeting users based on their previous online behaviours and preferences becomes more difficult. Advertisers will lose access to valuable data such as user demographics, browsing history, and interests collected by third-party cookies.
Shift to First-Party Data: Building and leveraging first-party data will become crucial for personalised targeting and effective ad campaigns. Invest in building and enriching first-party data through direct interactions with users on your website. The aim is to encourage users to willingly share their preferences and information. Our recommendations would be to add an incentive, sign up for something in return or a loyalty program to capture this information.
Challenges in Cross-Site Tracking: Cross-site tracking, which enables advertisers to follow users across different websites will become more challenging. Advertisers will need to find new ways to understand user journeys and deliver relevant ads now that they can no longer rely on third-party cookies.
Privacy-Centric Approaches: The shift away from third-party cookies aligns with a growing emphasis on user privacy. Prioritise user privacy and adopt privacy-first advertising strategies to build trust. Clearly communicate your commitment to data privacy in advertising campaigns and ensure compliance with relevant regulations.
Impact on Ad Measurement and Attribution: Accurately measuring the effectiveness of ad campaigns and attributing conversions is also a concern. When reporting on client campaigns, we need precise measurement to verify our strategies. This may mean investing in advanced analytics in the future and exploring attribution models that consider various touchpoints in your customer journey.
Increased Reliance on Contextual Targeting: Digital advertisers will need to focus on delivering ads contextually, relevant to the content users are currently engaging with. Explore content categories and themes that resonate with the target audience for more effective contextual advertising.
Emergence of New Advertising Technologies: The end of third-party cookies will likely drive innovation, leading to the development of new advertising technologies and solutions. Staying abreast of emerging trends and technologies to stay competitive will be paramount. This includes technology providers such as Google and experimenting with artificial intelligence and machine learning to navigate the transition sucessfully.
Explore Alternative Data Sources: Look into alternative data sources, such as second-party data partnerships and data collaborations, to supplement the loss of third-party data. If you haven’t already, consider integrating Customer Relationship Management (CRM) data for a comprehensive view of customer interactions.
Diversify Advertising Channels: Diversify advertising efforts across different channels, including social media, email, influencer marketing, and other emerging platforms. Experiment with a mix of online and offline channels to reach audiences in various contexts.
Understanding the role of third-party cookies in online tracking and the imminent changes in 2024 is crucial. While challenges lie ahead, adapting to alternative solutions and prioritising first-party data will be key in navigating digital marketing campaigns and reporting.
We will be regularly monitoring industry trends, user behaviours and technological advancements and will be sure to keep you updated on relevant changes.
Keep your eyes peeled for our next blog with further details on first party data and how to integrate it into your 2024 strategy.
For more information about third party cookies, get in touch with our team.