The End of Third-Party Cookies: Impact on Digital Marketing
Browsers like Firefox and Safari stopped supporting third-party cookies some time ago. However, the announcement that Google planned to phase them out by 2022 sent shockwaves through the advertising world.
Chrome is the most popular browser by a significant margin. This decision means that Chrome will no longer allow ad networks to collect user data via cookies, and it’s likely to make a considerable impact on digital marketing and advertising.
In this article, we’re going to look at:
- What third-party cookies are.
- How the phase-out will affect advertising.
- Possible replacements in a post-third-party cookie (P3PC) world.
Keep reading to understand how the “death” of third-party cookies will impact:
- Data gathering
- User privacy
- Digital marketing activities for publishers and advertisers
What Are Third-Party Cookies?
Third-party cookies are data packets that collect information about a user’s online activity. Digital marketers use that information to:
- Customize user experiences
- Provide targeted marketing and ads
- Make websites more engaging
- Generate ad revenue
Unfortunately, the lack of accountability and data privacy guarantees has resulted in many user concerns about third-party cookies. Recent information leak scandals generated many discussions on the topic, and Google is positioning itself to protect user data from any possible threats.
What Does the End of Third-Party Cookies Mean for Advertisers and Publishers?
The end of third-party cookies might not be the end of digital marketing, but there are undisputable challenges that marketers will face.
The most significant problem is the loss of data. As one of the most common ways to collect data for targeted marketing, advertisers will need to turn to other information sources. First-party cookies are one of the mechanisms that’ll still be available to marketers, and Google Ads already uses them.
Marketing automation tools will also be affected. Without the data from third-party cookies, these platforms will need to adapt and use first-party data.
The impact on programmatic advertising will likely be significantly more notable, especially in the early stages of the phase-out. According to Google, impression-based ad revenue can drop by as much as 52%. Without a clear alternative way to track activity and provide targeted advertising, the announcement didn’t go over well with many major publishers.
It’s undeniable that there are many challenges ahead for online advertisers, publishers, and marketers. However, it also indicates that the industry is heading for a more transparent and accountable future that may be better for all involved.
What Will Replace Third-Party Cookies?
Although all major browsers are phasing out third-party cookies, Google is actively looking for a way to gather user data while still protecting their privacy. Currently, the search engine is working on a less invasive system called Privacy Sandbox.1
In an attempt to keep both advertisers and users happy, the new solution entered trials for click-based conversion metrics without third-party cookies at the end of 2020. While there’s no definitive way to pinpoint whether the system will be effective, Google is providing regular updates on its development.
Marketing agencies, tech vendors, brands, advertisers, and publishers are also determined to take advantage of the opportunity. Several companies are participating in IAB’s Project Rearc, banding together to develop a new solution to re-architect the digital marketing space.2
The end of third-party cookies might not be the end of digital marketing. Still, it does mean that advertisers and publishers will have to find a new way of gathering data without compromising user privacy. First-party cookies are still usable, but with Privacy Sandbox and Project Rearc in the works, digital marketing as we know it will likely be undergoing major changes and developments in the next two years.