Of all the changes coming to digital marketing, none may be more impactful and controversial than Google’s phase-out of third-party cookies on Chrome browsers (Google’s most recent announcement). Advertisers have been using third-party cookies to collect data on user behavior and interests online for many years. This process has allowed advertisers to hone in on target-rich audiences across multiple advertising platforms, producing one of the last decade’s most successful digital marketing strategies.
But with data privacy becoming increasingly important to users online, this marketing practice, and others, have not been looked at favorably. According to Google, “Some data practices don’t match up to user expectations for privacy, and it is in the name of privacy that Google has initiated the Privacy Sandbox, which will be discontinuing Google Chrome’s support of third-party pixels.”
Let’s dig in.
What are Tracking Cookies?
Tracking cookies are small data files that websites store on your computer for future reference and retrieval. They’re typically used to manage user sessions, deliver personalized content, and, as their name suggests, for tracking. There are many types of cookies, but for our discussion, we’ll focus on first- and third-party cookies:
First-party cookies are generated by website owners and used exclusively on the websites that generate them. They are generally used to enhance your website’s user experience by storing user preferences (such as preferred language, login information, deliver chats, etc.) Marketers also use first-party cookies to track website visitor demographics and behavior, usually in basic analytics (e.g., session, location, device, shopping cart items, etc.) The important things to remember are that third parties don’t use this data for advertising, and first-party cookies don’t provide site owners with insights beyond what they collect directly on those websites.
Third-party cookies are generated by parties other than the site owner – e.g., ad networks. Like first-party cookies, they collect tracking data from web visitors. That data is used for marketing purposes (e.g., serving content or ads). Third-party cookies enable advertisers to target specific audiences on third-party platforms or websites based on user behavior and preferences.
Here’s an example of how a third-party cookie might be used:
A web user lands on Awesome Company’s product page. Later, when visiting other websites (e.g., Facebook, a third-party blog, etc.), the user sees an advertisement for the product they saw on Awesome Company’s website. (This ad practice is called “retargeting.”)
Why a Third-Party Cookie Phase-Out was Inevitable
Privacy is a growing concern for online users and authorities in the United States and around the world. According to PEW Research Center, 79% of Americans show “concern over data usage,” and 59% say they have a “lack of understanding about data use.” These realities have prompted companies like Google to become more privacy-focused in their online products and services. Google isn’t the first. In the most visible example, Apple’s blocking of third-party cookies by default has been at the heart of Facebook parent company Meta’s recent ad woes. Firefox automatically disables cross-site tracking cookies and gives you features to manage your level of privacy while navigating to different websites.
How Marketers are Preparing for Third-Party Cookie Phase-Out
The biggest impact of this change will be felt in retargeting. That means B2C activities will take the brunt of the disruption, but plenty of B2B players will need to adjust well. There’s still a lot to work with:
- First-party cookies are still on the table: While third-party cookies are on the way out, first-party cookies still collect tons of valuable data to bolster user experience and help advertisers understand their audiences and make educated decisions in their marketing campaigns.
- You can encourage users to share data: Email is still the most significant medium for marketers when it comes to first-party data. Great content and incentives on your website to leverage newsletter signups and website subscriptions remain impactful digital marketing strategies.
- You can leverage your data on advertising platforms: Advertisers can still use their data on advertising platforms like Google Ads and Facebook. For instance, you can still use customer lists to create custom audiences on Facebook or use Google’s Customer Match feature for enhanced conversion optimization.
- Google is still going to track people’s behavior online: While Google is opting out of tracking individual people, the company is heavily invested in tracking groups of people, such as with the tracking system FLoC (Federated Learning of Cohorts).
What Should You Do?
While much attention has been given to this change, it’s essential to keep it in perspective. All your marketing channels – including PPC and other online advertising – remain wide open. You’ll just need to focus more heavily on best practices for generating brand awareness, delivering solid user experiences, and building proprietary lists and audiences. We’ve long known that content (strategy, relevance and substance) will separate marketing winners and losers over the long haul. That trend was accelerated when the pandemic shut down live events. The loss of third-party cookies is just another nudge in that direction.