“Since the late 1990s,” says Cookie Script, “online marketers have built their businesses on the ability to track online users and then target them with advertisements, and much of this has been through the use of third-party cookies.”
That model is about to come crashing down.
Third-party cookies, which are set by domains other than the one being visited, allow marketers to track visitors across multiple sites. They are commonly placed by social networks or advertising networks whose content appears on multiple domains – and, because they are linked to individual browsers or logged in users, can be used to build a detailed picture of that user, based on the content they encounter as they browse. That picture helps the cookie owners to optimise marketing and advertising campaigns through the use of interest-based, rather than contextual advertising.
GDPR awareness has led to a drop in sales
Yet, the way networks are using cookies is coming under scrutiny. Users are already more aware of the technology post-GDPR and, according to a 2022 study at the University of Oxford, the regulations’ introduction has led to a downturn in sales and profits of 2% and 8% respectively, with the impact most strongly felt by smaller players.
There is some hope that this downturn will not be sustained and may have been caused, in part, by one-off issues related to implementation.
The end of third-party cookies
In August 2019, Justin Schuh, Google’s director of Chrome Engineering, warned that “technology that publishers and advertisers use to make advertising even more relevant to people is now being used far beyond its original design intent – to a point where some data practices don’t match up to user expectations for privacy”. As a result, the Chrome team announced the Privacy Sandbox, an open-source set of tools for protecting end users’ personal data.
“Some ideas include new approaches to ensure that ads continue to be relevant for users, but user data shared with websites and advertisers would be minimised by anonymously aggregating user information and keeping much more user information on-device only,” Schuh explained. “Our goal is to create a set of standards that is more consistent with users’ expectations of privacy.”
Firefox and Safari already block the use of third-party cookies
Three years on, the work is set to bear fruit. Mozilla Firefox has been blocking third-party cookies by default since summer 2019, and Apple’s Safari browser since March 2020. Chrome is set to follow suit next year, which is significant, since the browser commands a 66% market share.
Marketers must therefore look for other strategies – both within the browser and beyond it – if they are to continue building successful data-driven campaigns while balancing personalisation and privacy.
Life after third-party cookies
As Usercentrics’ Cookiebot points out, other technologies that can function in a comparable manner to third-party cookies include “Local Storage, IndexedDB, Web SQL, and any other technology that makes it possible to save data on a user’s device from browsers (as cookies do).” The death of the third-party cookie certainly does not equate to the end of user tracking, then, and even without such work-rounds, it will still be possible to target specific users with curated content.
Google is working on the Topics API to enable interest-based advertising without directly tracking users. Under this model, marketers and other domain owners would map their hostname to a topic of interest, such as travel or transport, which would be combined with data from a user’s previous week of browsing history to select the most relevant ads targeting that topic area. Crucially, the recent history on which this is based would be processed by the browser, rather than the server, so no identifiable data needs to leave the user’s device.
Beyond cookie tracking
While these measures will allow marketers to continue using many of the same principles – although not the same technologies – as they do when raising awareness through ad-based campaigns, it is becoming increasingly clear that this kind of marketing should only be part of a more diverse set of campaigning tools.
“Though the details remain uncertain, it’s clear that solutions from Google’s Privacy Sandbox will not be enough,” explains Match2One. “To effectively target at scale in the post-cookie world, it’s necessary to adopt a portfolio of approaches that includes solutions to intelligently target ads without clear identifiers.”
If, as looks likely, brands will find it more difficult to mine their audience for insights, they must refocus their advertising to be more direct. As reported by Marketing Dive, a 2021 report from the Interactive Advertising Bureau and PwC “recommended marketers prioritise utility, including reducing the number of clicks and accelerating the adoption of shoppable formats that can provide a more holistic experience. Switching up strategies could be more imperative as the deprecation of cookies in 2023 and changes to mobile identifiers make it harder to target internet users in the traditional fashion.”
The benefits of fleshed-out profiles
Where brands want to ensure that their creative is not only direct, but also relevant, they will have to rely more heavily on data that they already hold – or, if it is inadequate, to beef it up in advance of the phase-out of third-party cookies.
For example, where a brand has first-party data for many or all of its past customers, with comprehensive contact details, preferences, and records of past interactions, it can use these metrics to serve relevant content should they match the details of users they encounter through some advertising networks.
Amazon’s demand-side platform (DSP), which sells inventory across sites embedding Amazon-sourced display and video advertisements, “lets advertisers target customers using either a first-party cookie or hashed email as a user identifier, and to programmatically target those audiences with display and video ads, at scale,” explains MarTech Series.
It seems likely that such strategies will be further developed over the coming months and years, as innovators introduce solutions to counter the demise of the third-party cookie.
Hashed email addresses are just one avenue, but prudent marketers should be primed to flesh out customer records in anticipation of DSPs in general rolling out similar initiatives allowing more granular targeting based on other known metrics.
More data, more effective
Xandr has developed a platform that allows buyers to “utilise their identity providers of choice to drive targeting and frequency capping strategies across scaled inventory, meeting campaign objectives across private and open marketplace transactions in one of the largest omnichannel, global supply exchanges. Publishers will be able to leverage their first-party IDs and industry ID solutions across deal types in ad requests in order to monetise inventory without cookies or device IDs.”
So, the more comprehensive brands can be in their compilation of first-party data, the more effectively they will be able to continue targeting a relevant audience without the use of third-party cookies. Collecting such data takes time, so even if the future landscape has yet to be fully mapped, dynamic brands must take the task in hand today.
Traditional tools remain effective
Should they do so, the benefits are likely to be more widespread than might be immediately apparent, with research from GetApp revealing that “23% of marketing experts plan on investing in email marketing software due to Google’s new policy”.
Having a more complete picture of each recipient will allow those marketing experts to tailor their direct marketing activities on a per-recipient basis, or at least to organise their recipients into smaller and more relevant groups for targeting
Further, refocusing on the opportunities afforded by first-party cookies, which will continue to be handled as they are today, will deliver insight derived from a visitor’s activities on a brand’s own properties. The brand will continue to see which products, services, or information they engaged with, and can use this to formulate a more complete picture of their interessts.
Cookie changes are an opportunity
Gathering first party data can be difficult, but any data – so long as it is accurate – is better than none and can be supplemented by additional metrics sourced from third-party sources.
The demise of third-party cookies may be seen, by some, as a threat to business as usual, but it is also an opportunity. Any meaningful change that upsets the status quo is a breakpoint, allowing dynamic brands to reassess their current policies, improve upon those practices that remain effective, and adopting the processes that will allow them to steal a march on their passive competitors.
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