Third-party cookies, vital to tracking and analyzing user behavior, are going to be phased out in the next 12 months. Here's what that means and what you can do.
If you’ve been keeping up with digital advertising news recently, you’ve likely heard about the upcoming deprecation of third-party cookies. This shift is going to have significant impacts, and digital marketers should prepare to adjust their strategies accordingly.
1st party cookies vs 3rd party cookies. What’s the difference?
First, let's differentiate between first-party and third-party cookies. When a user visits a website, a first-party cookie is created and stored on their computer by that website. These cookies are used to enhance the user experience by remembering things like login information, preferences, and shopping cart items. In contrast, third-party cookies are generated and hosted by a different domain than the one being visited. These cookies are primarily used for tracking across domains to enable features like ad retargeting, cross-device tracking, and multi-touch attribution.
What does 3rd party cookie deprecation mean for digital marketers?
Well, quite a lot. For starters, it means a significant loss of ad targeting. Interest-based user profiles have historically been built using third-party cookies by tracking frequently visited websites, purchases, and content interests. This data is used to deliver personalized ads and retargeting campaigns that are highly relevant to the user. Without third-party cookies, digital marketers will have a harder time creating and targeting these user profiles.
Another area that will be impacted is multi-touch attribution. This process involves tracking which ads a user has seen or clicked on, and the path of interactions that led to a conversion. It provides valuable insights into which channels and tactics are most effective at driving ROI. Without a user ID, like third-party cookies provide, tracking this will become increasingly challenging.
Cross-device tracking is also going to take a hit. User profiles enabled by third-party cookies allow digital marketers to build a device graph, which is a group of devices that belong to the same user. Digital marketers can then retarget users across devices no matter where they browse. This is going to be much harder to achieve without third-party cookies.
How do digital marketers solve for the loss of ad targeting?
The first solution is to rely on first-party data. Data collected directly from users, including user behavior on a website or app, purchase history, and demographic information, has always been important to build out robust persona profiles and customer lists. With the loss of third-party cookies, CRM match and interest and behavior-based audiences from website activity will become the primary ways to reengage potential customers as well as build customer loyalty.
Another solution is to use contextual targeting. This involves aligning messaging with the contextual environment to personalize ads to an audience. Ad vendors have already started investing more heavily in building out page context AI tools that crawl websites for keywords and related terms to build contextual category site lists.
Some companies have already started providing ID solutions on a global basis. One that has gained the most attention to date is the TradeDesk's Unified ID. However, universal identifiers operate on an opt-in only basis, so adoption by users has been low. We don't recommend waiting for a widespread adoption of a universal ID solution to start building a post-cookie strategy.
How do digital marketers solve for the loss of attribution/measurement?
There are a few solutions available. Google's Enhanced Conversions, for example, uses first-party data to improve the quality of conversion modeling within Google ad products. Customer data, typically email addresses, are captured at the time of conversion onsite and hashed to be privacy compliant. This data is passed back to Google where it’s matched against Google logged-in profiles allowing for more accurate reporting and robust ad optimization.
Facebook's Conversions API is another measurement solution that was developed in response to the iOS 14.5 update, which limited tracking on iPhone devices. It creates an API connection between the server hosting your website and Facebook's ad server. Data captured on your site's server, such as purchases, can be passed to Facebook Ads without the need for a 3rd party cookie.
So there’s a successful way forward for digital marketers?
Always! While the deprecation of 3rd party cookies is a big deal for digital marketers, there are ways to adapt and continue delivering personalized ads and retargeting campaigns. It's all about using first-party data, contextual targeting, and other measurement solutions to build a robust post-cookie strategy.