The end of third-party cookies: what’s an advertiser to do?
In 2020, Google shook up the advertising industry by announcing that it would ban third-party cookies from its Chrome browser by 2022, following in the footsteps of Apple, Mozilla and other companies that had already restricted their use.
With the deadline looming, Google finally backed down and postponed the change to the end of 2023, giving publishers and advertisers more time to adapt their practices to the new reality.
While this reprieve is welcome, marketers mustn’t sit back: it is time to imagine the future of digital advertising and find alternative targeting solutions to prepare for the transition.
In this article, we take a look at the role of third-party cookies in advertising and the different ways to advertise on the web in a cookieless world.
What are third-party cookies?
Cookies are small pieces of code that are placed in the user’s browser when they visit a site. They provide information about the user (browser type, device, language, etc.) and their online behaviour.
Two different cookies are set on the browser: an internal (first-party) cookie and a third-party cookie.
Internal cookies are created and used by the site the individual is visiting. Third-party cookies, on the other hand, are placed by another site or application. Their purpose is to follow the user on all the other sites that he or she will subsequently visit. This spying allows for a more profound understanding of their behaviour and interests in order to provide highly personalised advertising. For example, a hotel chain might know that you are about to travel and send you targeted advertisements because you recently purchased a plane ticket on another site.
This explains why you might see advertisements from brands you may never have heard of pop up on your feeds.
Obviously, there are ethical issues tied to such a practice. The end of third-party cookies would therefore aim to better protect the privacy of users – at least that is the reason expressed by Google.
What’s really going to change?
With the end of third-party cookies, it will no longer be possible to monitor users’ behaviour on sites other than those they have visited.
Brands will also no longer be able to buy data from third-party cookies, which is almost all the data used by Data Management Platforms (DMPs) in programmatic advertising. These providers will have to rethink their offerings or be doomed to extinction.
While the use of first-party cookies will still be allowed, sites will have to ask people’s permission to collect their data. Although this legislation is not directly related to the end of third-party cookies, we can expect to see it being implemented around the same time.
Many changes are coming, but it will still be possible to target consumers effectively while respecting their privacy. Already, four major solutions are on the horizon.
1. The use of first-party data
As third-party data disappears, first-party data will become central to brand strategy.
This includes all the information that you collect directly from your audience (site behaviour, transactional data, CRM data, customer account information, email list, etc.).
You probably already have all this information, but are you making the most of it?
The Customer Data Platform (CDP), a tool that unifies first-party data from multiple sources, will undoubtedly gain in popularity over the next few years.
A CDP is software that collects and consolidates all first-party data to create unified profiles for each consumer. Eventually, CDPs will also be able to cross-reference this information with second-party data.
At Braque, however, we believe that the end of third-party cookies could result in quite the opposite and pave the way for more pertinent targeting.
You have to understand that targeting with third-party cookies is based solely on the fact that a user has visited a site: the individual may have landed on that page by mistake, or they may have already purchased the product they need. Basically, advertisers regularly spend hundreds of dollars to be seen by people who never had any intention of buying their product in the first place.
First-party cookies are a game-changer, as consumers who accept them are explicitly showing interest in the brand. All the profiles in your CDP will belong to individuals who probably want to be targeted by you.
If you’re worried about cookie consent, it’s good to know that since the GDPR came into force in 2018, the consent rate in Europe has soared. While it started out around 30%, the average consent rate is now at 85%, even rising to as much as 98% on some sites (Quantcast).
2. Contextual targeting
This change will be a return to basics for many experienced advertisers, but it must be said that contextual targeting has become much more sophisticated in recent years. Advertisers now have very interesting options at their disposal.
It used to be that if a luxury car salesman was looking to reach potential customers, he or she would simply post his advert on a related site (e.g. Car and Driver) and cross his fingers that his target would happen across it.
Today, it’s possible to publish the advertisement all over the Internet, on pages with car-related content, and target only those people who visit these pages on Saturday mornings, at home, on the latest mobile device.
Why these criteria? Because we know that this individual is interested in buying a new car, is willing to learn (since he or she is at home, quiet, on a Saturday morning) and probably has a high income.
An interesting advance in this field is semantic targeting, which, thanks to in-depth textual, visual and audio analysis, is able to better understand the contextual elements of each web page. The advertisement therefore only appears on pages whose content is genuinely related to that of the ad. It is much more effective than whitelists and blacklists in avoiding certain topics or opinions.
3. Universal identifiers
Universal IDs (universal identifiers) are unique identifiers shared between members of a network made up of multiple industry players. The system works on the principle that a user gives consent to a set of advertisers, media and others to be tracked on the web in a way that respects his or her privacy, all in exchange for free content offered on the sites he or she visits.
One example of a unique identifier is Unified ID 2.0, which brings together dozens of media, SSPs (Supply-side Platforms), search firms, DSPs (Demand-side Platforms) and industry leaders. An individual therefore has the same unique identifier on all these platforms.
When the user registers with one of the group’s member sites, he or she gives permission to all the others to have access to his ID and data about his web behaviour, much like with third-party cookies.
However, this system is much more respectful of the privacy of consumers. The unique identifier is hashed and encrypted. All data is anonymous and it is impossible to identify which individual it belongs to “in real life”, unlike cookies. In addition, users can control how their data is used when they give their consent.
4. Walled gardens
A walled garden is a closed ecosystem in which all operations are controlled by the operator of that environment. All data and technology remain within the ecosystem.
Facebook, Google and Amazon are examples of walled gardens. These web giants have an incredible amount of data on their users and run all the advertising campaigns for their clients in-house.
Since all their data is first party and never shared with advertisers, they are not affected by the end of third-party cookies.
This is good news for advertisers, who will be able to continue to buy space on these highly targeted platforms.
However, there are concerns about walled gardens. According to some industry professionals, they encourage the concentration of power and money in the hands of a handful of large players – remember that Google, Facebook and Amazon alone amass nearly 70% of all advertising spending on the web (eMarketer). Advertisers also fear a lack of transparency, as they do not have direct access to all the results of campaigns conducted in these closed ecosystems.
It is still possible for smaller publishers to develop their own walled garden, or their own private advertising network, but their targeting will be less precise than that of Google or Amazon, since they have much less data on their users than these web giants.
We hope this article has made you feel a little more optimistic about the demise of third-party cookies. It is certain that this change will take a period of adjustment for all brands, but we are increasingly excited about the solutions that exist and those that will soon be developed by our industry partners.