Cookies. Just hearing the word makes kids (and a certain Sesame Street character) smile and say, "Yes, please!" However, cookies have become a topic of concern for digital marketing leaders in the last couple of years, and pressure is building. Why? Because Google is phasing out third-party cookie access in Chrome in 2025.
The impending elimination of third-party cookies poses a significant challenge for digital marketers. Third-party cookies, which track user behavior across websites and platforms, are the cornerstone of their advertising strategies. Yet, increasing concerns about privacy and data protection have prompted browsers, including Google Chrome, to phase out support for third-party cookies.
A cookie-less world is coming, and you need to be prepared. This is one of the most important tasks you can do in building a media strategy. In this blog post, we'll discuss what's already happened and what's coming. We'll also share the preparations we recommend for our customers. But first, let's review the fundamentals.
What are Cookies?
Cookies are small text files stored on a user's computer or phone that track their online history. They provide advertisers information to target specific audiences based on demographics, interests, and activities. Without cookies, advertisers may not be able to target ads with the same precision. This limitation could lead to less effective targeting strategies and reduced campaign performance.
Imagine you're a clothing retailer and purchase a list from a market research company that provides information about consumers' shopping habits, preferences, and demographics. Your company didn't collect this third-party data but acquired it from a third party that uses cookies to compile it. Advertising networks place cookies on websites to monitor users' browsing. They aggregate the data and sell it as third-party data to businesses like yours for ad targeting.
What About Privacy?
Some cookies, like session cookies, are necessary for websites to work. Others are non-essential and need user consent to be set. That's why those "accept cookies" popup messages have become so prevalent. The popups tell users about the types of cookies used, the cookies' purposes, and the option to accept or decline non-essential cookies. Users are given the choice to customize their cookie preferences based on their privacy preferences.
According to Google, 89% of global users trust brands that invest in privacy-safe technologies. That's why they’re phasing out cookies on their platforms. With no cookies, users will have more control over their privacy. They can also opt out of tracking and delete existing cookies more easily.
What's Happening Now?
At the beginning of 2024, Google started blocking third-party cookies for about 1% of Chrome users. They will gradually increase the share of affected Chrome users until everyone is affected. Some businesses can request more time to stop using third-party cookies. But, they can only do this for non-advertising uses.
For advertisers, Google has started to feature new privacy-focused ad targeting strategies to replace cookies, using AI and first-party data, called Google Privacy Sandbox. Much of the Sandbox is in development at the time of this post, so our media planners are still determining how useful these tools will be for advertisers.
What's Coming Soon?
Each advertising platform is managing this change differently. Some have already changed their targeting capabilities. For example, Facebook offers a cookie-less tracking solution that allows ad targeting and measurement while respecting user privacy. Some platforms haven’t been clear about how their targeting will change. Some haven’t yet changed their targeting at all.
Generally, we expect that every platform will move away from using lookalike audiences for targeting. Instead, they'll use predictive targeting, focusing on advertisers' own customer data. This is scary for many advertisers because finding new audiences and expanding them without accurate and relevant customer data will be challenging. If this is where you are right now, you'll need to go back to basics in crafting successful advertising strategies.
Going Back to Basics
This new cookie-less world returns marketing leaders to a more traditional inbound marketing ideology. Your goal is no longer to find a customer out in the wilds of the internet through digital monitoring. Instead, you must pull them to your digital channels through content, SEO, and personalized advertising. Then, you offer an amazing experience and inspire the viewer to convert. You collect as much relevant information as possible. This way, you know how to interact with them (and people like them) in the future.
No Cookies Mean No Third-Party Data
Here's the bottom line. Very shortly, you'll need first-party and zero-party data to strengthen targeting, personalization, and engagement in your advertising campaigns.
First-Party Data
First-party data is customer information your company collects directly from prospects or customers through digital channels or in-person interactions. For example, when customers sign up for an account on your e-commerce website, their registration information is first-party data. This includes their purchase history and preferences. Similarly, first-party data comes from customer support, website visits, or email subscriptions.
First-party data is valuable. It provides insights into customers' interests, needs, behaviors, and preferences. Because this data is collected through interactions regarding your products, it's more reliable and accurate than third-party data.
Use this data to segment your ad audience based on demographics, purchase history, website activity, and past engagement. You can also predict future behavior and deliver personalized recommendations or promotions by analyzing past interactions and preferences.
You can also identify patterns among your existing customers, enabling you to build lookalike audiences sharing the same characteristics and preferences. Platforms like Facebook, Google Ads, and other marketing tools allow you to upload your first-party data and use their algorithms to match the profiles of your first-party data with their own vast user databases. With the lookalike audience in place, you can run targeted marketing campaigns aimed at these potential customers who may be interested in your products due to their similarity to your existing best customers.
While first-party data is readily available due to its various sources, marketing leaders find it challenging to harness. First-party data is in web analytics and social media. It's also in email lists, POS systems, CRMs, and customer experience databases. Pulling the data from these disparate sources and matching it to actual customers can be daunting.
Zero-Party Data
Users provide zero-party data voluntarily. They do so through surveys, quizzes, polls, interactive experiences, and website preference centers. For instance, when a customer shares their clothing size, style preferences, and favorite colors in a survey on a fashion brand's website, that is zero-party data.
Zero-party data is highly valuable because it provides direct insights into customers' preferences, intentions, and motivations. These insights enable you to deliver more personalized and relevant advertising and marketing messages. You’ll understand your customers better. You’ll build stronger relationships based on trust and transparency.
As with first-party data, collecting and harnessing zero-party data can be challenging. We suggest our clients have one single source of truth for all customer data, usually a CRM platform. With your data in one place, you'll save time and resources by pulling customer lists for predictive audience targeting. You'll also gain clarity in the kinds of data you need to collect from customers in the future to enhance your targeting.
Contextual Advertising Will Become More Important
Inbound marketing focuses on creating content that appeals to the desires and concerns of your intended audience. Contextual advertising complements this approach. It serves ads relevant to the content users search for and view. For example, as a consumer reads a blog post about interior design, ads on the site promote wallpaper, furniture, and related design services or products.
Instead of relying on user data and personal information, contextual advertising analyzes the web page's content, such as images, headers, keywords, and page topic categories, to determine the most relevant ads to display to the viewer. Contextual advertising can be implemented through various forms, including display ads, text ads, native ads, and video ads. Ads are served at the time consumers are thinking about that product or service and in a manner that seems "native" or authentic to the consumer.
With the decline of cookie-based targeting, contextual advertising offers a mechanism to reach your target audience in a relevant and non-intrusive manner.
New Attribution Touch Points Are Necessary
Marketing attribution will undergo great changes in a cookie-less future. Cookies are crucial for tracking user interactions and attributing conversions to specific marketing channels or touchpoints. Without them, you’ll need to adopt new attribution models.
First- and zero-party data offer attribution solutions by collecting user information via their behavior on your owned digital channels. For instance, you can link website visits, email opens, clicks, and conversions to specific touchpoints or campaigns. This data provides insights into user preferences, enabling optimization of marketing strategies.
In contrast, contextual advertising focuses on the content and context of the page where your ad appears. It offers insights into the digital environment, including page topics, keywords, and user intent. This lets you attribute conversions or actions to specific ad placements. You can then optimize ads and content based on relevance.
Leveraging first- and zero-party data and contextual advertising for attribution is the place to start. In addition, machine learning techniques can predict customer behavior based on observed data patterns. And, smart business leaders are exploring collaborative data sharing and attribution modeling to overcome the loss of third-party cookies.
While eliminating cookies disrupts our existing attribution models, new attribution strategies are emerging with opportunities for innovation and adaptation.
Consumer Experience will be Pivotal
Cookies play a crucial role in personalized online experiences, helping you deliver tailored content, product recommendations, and targeted advertising. Providing such personalized experiences may be difficult without cookies, resulting in less relevant and engaging content for users. Additionally, cookies offer convenience features like saved settings, language preferences, and location-based services, enabling cross-site functionality such as social media integration and single sign-on. The loss of these features could diminish your overall user experience and discourage repeat visits.
To solve these challenges, you must use available data to customize and improve your brand’s online experience. Machine learning and artificial intelligence can help you deliver personalized product recommendations, offers, and content. Also, offering other ways to log in, like social login, biometric authentication, or single sign-on (SSO) solutions, can ensure secure account access. This security doesn’t rely on cookies for sessions.
Don’t forget that eliminating cookies will also enhance your users' privacy and security. You can leverage this shift to build trust with your customers and demonstrate a commitment to privacy and data protection.
Working with Advertising Partners
Ad reps can be our best partners in successfully navigating a cookie-less world. The Phase 3 team proactively collaborates with every platform rep to get their support and advice. Transparency is vital. In addition, our team advises our clients to collect, scrub, and optimize their first- and zero-party customer data. We emphasize how important this data will be in predicting and personalizing their ads in the future. We’re also focusing on our clients' SEO and content strategies to increase their chances of getting their brand in front of the right people.
In Summary
Cookies have played a key role in digital marketing by enabling user monitoring, personalization, ad targeting, and analytics. However, due to privacy concerns, browsers like Google Chrome are phasing out support for third-party cookies. This change will cause substantial challenges for marketers impacting targeting, measurement, and attribution. Marketers must adopt alternative approaches, such as first-party data and contextual targeting, to maintain effective advertising strategies while prioritizing user privacy.
Investing in consent-based and contextual targeting is critical to thriving in a cookie-less world. We see many fabulous opportunities in predictive targeting using customer data. Adopting these strategies and technologies can improve your customers' experience while delivering personalized, relevant, and engaging brand interactions that build customer loyalty and drive growth. If your company needs assistance in adapting your digital ad strategies, our media planning team would love to help you. Contact us today to schedule a discovery call.