Third-party cookies will be gone by 2022. Even if you don’t know what a cookie is or rarely work on digital projects, this is a major shift that will impact any company with a website. To understand the scope of this change, the recent back and forth between Apple and Facebook, Substack’s massive evaluation, and new privacy legislation in States like Virginia and Colorado can all be tied back to third-party cookies and their looming disappearance.
So, what are third-party cookies, why are they going away if they’re so important, and what should businesses be doing to prepare for a very different Internet?
First, let’s cover the basics.
What are third-party cookies?
Cookies are what identify users in a computer network. Third-party cookies send user data from one network to another, or belong to a network other than the one a user is currently browsing.
What do third-party cookies do?
Since third-party cookies belong to third-party networks, they are mostly used for advertising and user tracking.
As a general rule, if ad targeting relies on understanding user behaviour from sites other than the ones serving ads, that data comes from third-party cookies. Take programmatic ad platforms for example, where ads technically “live” on one network and “follow” users to different sites. These ads are generally based on a user’s interests or browsing history—gathered by third-party cookies.
Social media sites like Facebook also use them for platforms like the Audience Network, and for interest or behaviour-based targeting. Most retargeting relies on third-party cookie data, and some analytics platforms use them as well.
If third-party cookies are so important, why are they going away?
Because people want them to.
Privacy is a growing concern. Platforms like Google are removing third-party cookies in response to users’ increasing demand for transparency and control over who is using their data and how. Apple has been taking action, too, by introducing tiered data sharing options so users can opt for less info going to third parties like Facebook. But it’s also why privacy legislation is becoming an increasingly hot topic—politicians and Internet browsers are essentially responding to the same concerns.
But what about advertising?
In short, it’s not going anywhere, but brands will have to be smarter.
Companies will always need to move beyond their first-party or owned data to reach new customers.Without third-party cookies ways of doing that will change. As long as the need remains, there will be plenty of methods for identifying and reaching the right people online. Remembering that this is part of a broader trend, many of these tactics are already in place or are at least in the process of being developed.
Email is a great example of first-party data that will be an even bigger part of marketing plans going forward. This helped Substack’s IPO and explains why Facebook and Twitter are developing their own similar email services. Sponsored content, media relations, influencer campaigns, and other strategies without an overt advertising or targeting component will be mostly unaffected. Search engine marketing will also continue mostly as normal since it relies on users' real-time actions in their current network rather than past activity in another. On a similar note, social targeting options will change but the ability to reach Twitter users on Twitter or LinkedIn users on LinkedIn is not going away.
Why do I keep hearing about something called FLoC?
Google’s Federated Learning of Cohorts (FLoC) is probably worth its own article. In a nutshell, it studies users browsing behaviour and then anonymously assigns them to “cohorts”. Then would serve ads based on cohorts instead of an individualized basis.
The initial, nearly unanimously negative reaction to FLoC suggests it’s unlikely to be implemented in its current form, though the name may stick around. FLoC’s challenges are a learning opportunity. Proof users will not tolerate any ad tech they feel infringes on their privacy or uses their data in a way they don’t understand.
Looking at third-party cookies’ demise as part of broader trends like privacy, transparency, and data control, the negative reaction seems inevitable. FLoC relies on following users throughout the Internet, which does not address what’s at the core of these trends.
Companies like Google will inevitably update their offerings for a post-cookie world. Whatever this new ad tech is, it will not decrease the growing demand for privacy and transparency. The onus will be on brands to demonstrate they know what their customers are comfortable with and choose platforms or technologies accordingly.
So what should we do?
New solutions addressing these changes will be custom, incorporating evolving technical capabilities, varying regulations, and shifts in attitudes or norms in different industries. In any case, proactive companies are already preparing. If you’re looking to get started, keep these two things in mind.
Think people over platforms: This is an opportunity, not a setback
- Remember this is part of a broader trend giving users more privacy as well as control over their data and how it is used. More importantly this is something people have been asking for (even people who don’t know what a cookie is want more privacy and data control). If the goal is to be on the right side of customer attitudes, then the changing Internet is an opportunity for brands to show consumers they respect their concerns, providing an opportunity to differentiate themselves by going above and beyond.
- Going forward, users will be able to choose if and to what degree their information can be used for marketing. Businesses depend on data more than ever, so accessing this vital information will mean cultivating and maintaining consumer trust. This should be easy when it comes to privacy, as all marketers are people too. If it creeps you out, it’s probably off-putting to customers as well.
- Every business should explain how they plan to use data in a way people actually understand. Opting out should be simple and the connection between the information you collect and the services provided should be rather obvious. For example, if nothing is being shipped there is no reason to ask for customers’ addresses. Personalization will be key. Companies will need to show how they are leveraging users’ data and provide them with value for letting them do so. This will mean lots of tailored experiences or customized content, which means...
Create a first-party data strategy: Evolve processes and tools
- This is how everything comes to life. Without third-party data, companies will need to collect and leverage their own data, making it first party. In practice, this will involve a combination of processes and tools or a “marketing stack”, integrating everything to do with user information throughout the company in a way that meets users’ expectations and complies with evolving regulations.
- Most organizations will need new tools and updated approaches. Approaches will vary, though the type of tools will be somewhat similar. Look for consumer data platforms (CDPs), though some brands can probably survive with existing consumer relationship management software (CRMs).
- The CDP is where the data lives and can be tailored to fit a group of customers or prospects. This is how first-party data becomes a competitive advantage. Without third-party cookies, it’s up to first-party processes to fill that CDP (or CRM) with the right data. Brands that excel at building trust and convincing users to share relevant information will know more about their customers than their competitors. A good first-party data strategy also includes a way to use that information, which could drive efficiencies in ad spend, help spot trends faster, and generally serve customers better.
- Programs like CDPs force a relationship-based approach, looking at contacts on whichever platform they happen to prefer interacting with a company, and then serving platform appropriate content more in line with that user’s immediate interests or needs. A first-party data strategy is the all-encompassing plan to either start or keep thinking this way.
- Of course, tools are only as valuable as the processes around them, so a marketing stack and first-party data strategy should be developed in tandem. The best approach will depend on your company’s sector, existing digital culture and technology, as well as the jurisdiction you’re operating within. In terms of processes, expect the shift from third to first-party data to move digital marketing tasks closer to email campaigns and list management where you can collect data first-hand on how your customers are interacting, rather than siloed channel approaches to Facebook or Search.
Yes, third-party cookies going away means a lot of potentially challenging technical and process updates. Looking at it as part of a broader trend towards increased privacy and transparency it becomes an opportunity for companies to improve how they communicate by giving users what they want. Solutions like first-party data strategies will rely on cultivating customer trust, which is something every brand should be making a priority anyway.
It’s true that new and big changes are coming. Knowing these changes are driven by user demand, broader trends, and in some cases new laws, they seem rather necessary.
Reach out to our Digital Communications experts to learn how we can help you navigate these changing times as third-party cookies are about to disappear.