The End of Third-Party Cookies: A New Update You MUST Prepare For!

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Without chocolate chipping away at your sanity with stale and crumbling cookie wordplay, third-party internet cookies are a topic that warrants skipping straight to the digital dessert.

Throughout 2020 (a year already hallmarked by its unprecedented levels of difficulty, even before throwing a digital marketing paradigm shift into the dough mix) the death of third-party cookies has undoubtedly captured the attention of the entire advertising world.

This article breaks down the batter on the third-party cookie situation.

As a critical and tasty (preparation tastes good, especially in advertising) topic for most businesses, we’ll start with the basics to make sure we’re all on the same recipe page.

What is an internet cookie?

An internet cookie – or an “HTTP Cookie”, is a text file which contains small pieces of data.

These text files are automatically saved on your computer when visiting certain websites.

What’s the purpose of an internet cookie?

Cookie files save information which, traditionally, allow websites to make “tailored” improvements to your browsing experience, based on the data saved in your cookie file.

What is a third-party cookie?

A third-party, in this context, is any website domain which is different from the one you’re currently visiting in your web browser.

A third-party cookie is a file which originates from a different website, but is served and downloaded to your computer through the website you’re currently browsing.

Unlike first-party internet cookies (the “first-party” being the site you’re currently visiting), third-party cookies are traditionally associated with tracking and advertising functions.

This guide on cookies provides more reading on how different types of cookies work.

So… what’s all of this about the “death” of third-party cookies?

From a publication in early October 2020 on the Chromium news and development blog, an opening statement from the development team reads:

“In January we shared our intent to develop privacy-preserving open-standards that will render third-party cookies obsolete.”

A recently deployed update to the Chromium browser, from which Google Chrome pulls its source code, included this statement to accompany the changelog:

“With this update — which Edge and Firefox are in the process of adopting — third-party cookies are no longer sent for the 99.9% of registered domains that do not require them, improving privacy and security for the vast majority of sites on the web.”

Google forecasts that third-party cookies will be entirely phased out of the Chrome browser through an update estimated for release in 2022. With about 70% of internet users choosing Chrome as their browser, this will mark the end of third-party cookies.

Why are third-party cookies bad? Why are they being phased out?

Without rummaging too deeply through the technical cupboard (the deepest of cupboards), third-party cookies have a long history of being considered a suboptimal approach to delivering legitimate, relevant ads to end users.

Cookie Stuffing”, for instance, is one of many well known methods of cookie fraud that promotes poor, fraudulent experiences for both advertisers and end-users.

As a security risk that affects both of Google’s primary audiences, phasing out third-party cookies is a logical move to better serve both parties.

Privacy, too, is commonly cited as a primary reason for the change, though an article by digital marketing expert Augustine Fou suggests that the influence of phasing out third-party cookies on individual privacy will be nominal due to the existence of a tracking technique called fingerprinting (albeit, the change is still considered a step in the right direction).

Who’s impacted by this change in digital advertising?

The landscape of digital marketing is constantly evolving, as it always has.

Everyone within the digital advertising ecosystem will be impacted in one way or another:

  • Publishers: As the backbone of much of the internet’s “digital real estate”, website publishers will have a more difficult time collaborating with advertisers. Because third-party cookies have traditionally been used to gather audience analytics, their removal is predicted to significantly lower ad revenue for publishers.
  • Advertisers: Advertisers will experience their own set of complications when third-party cookies are discontinued. Because the service offerings of many platforms that advertisers use rely on targeted user data (which will no longer be available) to operate, advertisers will need to source and/or engineer new solutions in order to continue creating effective campaigns that resonate with their audiences.
  • Supply-Side Platforms (SSPs): SSPs are services used by publishers (the “suppliers” of ad space) to manage their available ad space online. Because digital ad space is forecasted to be worth less for publishers (again, due to the new limitations surrounding user analytics, brought about by the end of third-party cookies) SSPs are also forecasted to lose revenue from the adjustment.
  • Ad Exchanges: As a digital marketplace that allows advertisers and publishers to promote and bid on ad space, ad exchanges, for the same reasons as SSPs, will be financially impacted by the removal of third-party cookies.
  • Demand-Side Platforms (DSPs): As the integrated part of ad exchanges that advertisers interact with (creating the “demand” for ad space), DSPs will suffer from a decrease in service options and performance. DSPs, and subsequently the advertisers using them, will have significantly restricted audience data available to them when defining ad targeting criteria.
  • Data Management Platforms (DMPs): As a service that’s built around storing and managing audience data, when that data ceases to be available online, it’s no surprise that the service offerings of DMP businesses will need to undergo a major pivot to remain relevant past the discontinuation of third-party cookies.

What functions of digital advertising are impacted by the change?

Because the role of third-party cookies is associated with identifying users and their behaviors across different websites, many traditional channels of advertising will be going the way of the dinosaur shaped cookie when Google’s meteor update hits (that’s not the official name of the update… but maybe it will catch on).

Familiar functions such as behavioral ad targeting, remarketing ads, ad frequency capping, and publisher audience extensions are flavorful techniques that marketers will need to find suitable substitutes for before the final batch of third-party cookies are baked.

How should you adapt your digital advertising strategy?

The end of third-party cookies signifies a mandatory shift towards newly emerging tools and techniques for matching relevant ads to consumers while maintaining data accuracy.

A list of new strategic perspectives to keep in mind that every digital marketing professional should have on their preparation radar include:

Pay attention to updates surrounding Google’s Privacy Sandbox.

This is a series of updates focused on providing replacements to third-party cookies, including:

  • The Event Conversion Measurement API. This API seeks to preserve user privacy, while offering advertisers a new solution for tracking conversions.
  • The Trust Tokens API. This API addresses fraud issues by identifying bots and other unnatural behaviors – without compromising personal details.

However, despite knowing that Google is working on “something”, no one is really sure what solutions they’ll come up with exactly.

Unfortunately, this means the contents of Google’s Privacy Sandbox will remain extra private for the next few years.

Because we’re all still in the dark, other approaches to preparation may be preferable during this early adjustment phase.

Adopt first-party data strategies and techniques.

This means relying on data collected directly from users that interact directly with your website. While this may sound limiting, in many ways, opportunities also exist to strengthen customer relationships by focusing exclusively on first-party data. Some approaches include:

  • Leveraging user login forms to create identifiable profiles and surface-level information.
  • Using progressive profiling to gradually add data to user profiles, without bombarding them with data collection up-front.
  • Implementing event tracking to analyze user behavior, such as page abandonments, interactions with CTA links, and time spent on page.
  • Segmenting audiences by assessing which parts of the website, service, or marketing channels certain users interact with the most.
  • Standardizing automated data collection processes to ensure recorded data remains accurate through future campaigns.

Team up with AdTech platforms that understand the shifting landscape.

Because the digital advertising space is in limbo while everyone waits for Google’s Privacy Sandbox to become more developed, flexibility and creativity are the name of the digital advertising game moving into 2021 and beyond. Some elements to look for in AdTech tools include:

  • Open API support, allowing individuals and teams to build creative solutions and adapt flexibly to new pieces of the digital advertising puzzle as they’re discovered.
  • Custom development options to accelerate integrations between first-party data collection strategies and ad delivery techniques.
  • Responsive support teams that understand the significance of third-party cookie functions, offering future-proof guidance.
  • Collaborative environments that encourage input from customers and partners to develop solutions that best meet new and dynamic needs.

Whether you’re a seasoned digital marketing chef or a consumer of casual digital content cuisine, we hope that this guide has helped bring light to the “best before” date on your (and everyone else’s) third party cookies.

Enjoy them before they expire, and look forward to adding a hearty dose of creativity to your next batch of digital marketing munchies.

Kyle Strong