News & Insights

A Life Without Third-Party Cookies, What Could it Look Like?

In January 2020, Google circulated news that would shake the digital marketing industry – the death of the third-party cookie. As mentioned in a previous article, the “digital advertising ecosystem has historically relied heavily on third-party cookies for targeting, measurement and attribution” but as we are now just under 18 months from Google’s deadline, we will look at the questions brands and agencies should be asking. Below are some of the questions that advertisers and agencies should be looking to ask.

Will the cookie eventually disappear?

The cookie is probably the final frontier of user privacy given the amount of data that is shared from a user to a website, but with the death of the third-party cookie due soon, it does not mean that first-party cookies will disappear as well. The reason for this is that first-party cookie data holds a lot of valuable information that will need users to give some privacy away as it does give them some benefit such as:

  • Keeping you logged in on websites you have signed into
  • Saving your settings, such as your language settings, on websites you have visited
  • Maintaining a good user experience, e.g. seeing the web pages you have viewed on a website (i.e. BBC News)

There will be opportunities to target audiences using second-party data from publishers. However, even if this is a great idea to test performance and to utilise the vast amount of publisher data for campaigns, it is very important to check with the relevant legal department to ensure that the second-party audience data is legally compliant depending on the location of your campaign activity (e.g. GDPR, CCPA, LGPD). Going forward, it could be increasingly likely that advertisers will look to combine the use of using first and second-party data for campaigns to meet KPIs.

Over the next few years, we will more than likely see an evolution of the first-party cookie that will have to comply with an ever-increasing number, and evolution of global privacy laws. It is possible the future of the first-party cookie data could be “stored” locally on devices, or given internet browser account (such as Google Chrome and Mozilla Firefox by logging in) and with users giving websites consent to their first-party data for a limited time – by adopting, or creating a similar product to, Apple’s ITP tracking – with how much data the user wants to share is dependent on them.

Is there a solution to test now or is there a ready proposition?

The simple answer is yes and no. Currently, there are very few true “cookieless” solutions within the industry that brands and agencies can use. Should advertisers or agencies want to try some of these solutions then expect to pay a very high premium for their service, but it is important to ensure that the metrics are (or close to being) MRC approved otherwise the data would be unreliable. However, with Google’s deadline on the death of the third-party cookies due to take effect in 18 months, there is still time to build, prepare and test solutions.

There are ways to test circumnavigating the third-party cookie, one solution would be to ensure that brands have audience and data management tools – such as Google Analytics 360 and Adobe Audience Manager – to help analyse first-party data. With these tools, brands (or their agencies) can use the valuable first-party data to create segments based on the type of people who visit their website (for example, audience segments based on existing customers, frequent visitors or first time visitors). With these types of segments created, it is possible to utilise first-party data and target your audience in this way to aid in hitting KPI targets.

Should this not be possible, another solution is to use contextual keyword targeting, and if possible, combine this with in-market audiences. However, the downside by doing this using the DSP algorithm to analyse and target users who go on specific websites, however, the downside to this is that the audience numbers may not be as large depending on a number of factors (such as the number of keywords, types of in-market audiences you want to target).

Lastly, Google is working on a solution called the “Privacy Sandbox”, with its main product feature being the Federated Learning of Cohorts (FLoC).

FLoC is device machine learning in which the device’s user becomes the owner of the device cookie data – this is Google’s vision on how the future of programmatic advertising would work, as they acknowledge that user’s privacy is very important in this phase of the digital era.

How FLoC will work is when a user device learns about the user by understanding the behaviours and interests on the websites the user visits. Based on this data gathered by the device, websites will want to serve ads based on specific interests and will send signals to an Exchange; once the user goes to a website, the device will send information about the user (basic info such as male or female, and their interests) to the Exchange, from there an auction would take place and the winner will be able to see the ad.

At no time will the publisher, DSP or Exchange will know anything about the user and the user data will not be stored on any external servers except for the user’s device. An example of FLoC in action is Google’s “GBoard” installed on Android devices, however, this is to help users be more efficient in messaging as well as searching based on their typing (for notes, searches, directions, etc.) or messaging (via text message, WhatsApp, etc.) history.

What can we do now to ease the progression of the end of third-party cookies?

With many of the solutions either coming or those we can utilise now in the post-third-party cookie era, it is up to advertisers to take advantage of understanding how new products (such as FLoC) will work, but also understand the ways that are currently available – albeit with limitations – to test and learn now. It is also important to work closely with DSPs (such as Google’s DV360) and understand what they are doing to ensure programmatic activity will not be disrupted after January 2022.

Current strategies that will likely use third-party data, such as targeting a specific audience (e.g age, political affiliation, potential income) and buying behaviour, will need to be adapted by collecting first-party cookies. From there, data strategists and traders from both the advertiser and agency will need to understand who or what type of audiences they will want to build; as well as why as in some cases, some audiences will require time to populate.

The next thing advertisers, or agencies, can work on is to conduct a test and learn approach by utilising a strategy based on targeting based on keywords, combined with the DSP’s in-market audiences or a specific target list of URLs. Moreover, it is possible to test using lookalike audiences, as you are instructing the DSP to target audiences based on common traits from your existing first-party audience; it is also possible to combine this test to understand how your campaign will perform based on the Apple’s Safari ITP (with browsers such as Firefox who have adopted a similar version of ITP).

Should we be worried about the end of third-party cookies?

When the time comes for the third-party cookie to ceases operating on Google’s Chrome browser (which dominates the global browser market with a 65.8% share) Safari being the nearest rival with 16.7% share), it will signal an exciting time for a change – a change on methodologies and a change on the approach for digital marketing campaigns for brands and agencies. With the tools and solutions already available now, incoming or being developed, the future of digital advertising looks much brighter.

If advertisers or agencies have not started to build up their first-party data, then it is very important that they should start as soon as possible, with tools such as Google Analytics and Adobe Audience Manager. The later this is actioned the more likely the struggle brands will face when targeting specific audiences against ever-increasing competition across multiple industries come 2022.

As marketers, we should acknowledge that change can take time to accept and adopt but with the solutions already out there and incoming, it seems that change is good, and it will be exciting to see what will happen in the coming years.

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