Third-Party Cookies Are Being Eliminated. What Does It Mean for Advertisers?
For some time now, consumer privacy concerns have taken center stage in the digital advertising industry. But these concerns aren’t just driving conversations. They’re also driving impactful actions by regulators and some of the tech industry’s biggest players.
Recent years have seen the implementation and expansion of the EU’s GDPR and California’s CCPA, among other significant new regulations that have given consumers more control over their digital privacy—and given advertisers more to think about. And in 2020, Apple rolled out iOS 14, which introduced security features affecting ad tech capabilities.
However, it’s another 2020 announcement that has much of the industry abuzz these days: Google announced that it will be phasing out the use of third-party cookies in its Chrome browser by 2022.
While Firefox and Safari long ago eliminated the use of third-party cookies, Chrome’s sizable market share—over 64%, as of April 2021—means that the effects of eliminating third-party cookies will soon be felt across the entire industry.
While there’s plenty of time to adjust and retool their approaches, many advertisers have been left to wonder about just what’s coming next. Plus, many of them are still using third-party cookies: A recent MarTech Today survey found that 80% of marketers were still “moderately” or “heavily” reliant on third-party cookies. Meanwhile, just 46% are feeling “very prepared” for the coming changes.
The experts at Boathouse have put together a guide to help you better understand what a cookieless future means for you and your organization. Read on to learn what’s changing and how you can adapt.
What’s Being Eliminated?
Cookies have long been a central component of digital advertising. After all, these little text files stored on your browser can deliver outsized capabilities.
First-party cookies, the kind set by a website you visit directly, help brands provide a smooth user experience. They’re used to remember login information, language settings, and the products you have interacted with.
It’s third-party cookies that have been the subject of frequent debates over privacy concerns. These cookies are created by domains other than the one a user visits directly—often an ad tech platform—and enable behavior to be tracked across sites. The data gathered during tracking makes it possible for advertisers to serve personalized ads, as well as measure the performance of those ads with multi-touch attribution and cross-channel reporting.
These third-party cookies will no longer be supported by Google Chrome beginning sometime in 2022. However, the future won’t actually be completely cookieless: first-party cookies will still be supported.
What Does the Phase-Out of Third-Party Cookies Mean for Advertisers?
The biggest consequence of Google’s move will be the elimination of behavioral targeting. In theory, this means that the information advertisers were previously able to gather about user behavior—frequently visited websites, past purchases, related interests, and demographic data—to serve highly targeted ads will no longer be available to them in the same form.
In the absence of behavioral targeting, one of the biggest questions on advertisers’ minds is how they will make up for the reach and scale that this model provided. According to Shaina Lurie, Digital Media Supervisor at Boathouse, delivering effective ads that get results will still be possible, even without behavioral targeting.
As the industry transitions away from third-party cookies, it’s as crucial as ever that advertisers bring a diversified approach to their overall strategy. “Now is exactly when it’s important to have multiple partners, multiple tactics, multiple channels,” says Lurie. “Without behavioral targeting, it’s important to look very closely at the bigger mix of available options to be sure you’re making up for all of that reach.”
What Types of Targeting Will Still Be Available to Advertisers?
Much of that mix is already available to advertisers. Even without third-party cookies, advertisers will still have a range of powerful targeting methods available to them. For example:
Contextual targeting: Rather than targeting users based on past behavior, contextual targeting methods serve relevant ads in real time based on the content and keywords a user is consuming and using.
IP targeting: Consumers and businesses are targeted based on their Internet Protocol (IP) address.
Geolocation targeting: Advertisers can use geofencing to serve their ads to users located within a specified area.
Device targeting: Marketers have the ability to access mobile web and in-app usage data, as well as device ID signals, in order to inform targeting efforts.
With the ability to tap into these tactics and others, as well as a variety of formats, marketers can still make the most of their campaigns. Plus, as Internet usage continues to increase, new tools will continue to appear.
Ultimately, according to Lurie, it’s not limited options that should concern marketers, it’s a limited approach. “The changes might alter some of the ways we do things, but I don’t see us as being limited,” says Lurie. “In my opinion, the notion of being ‘limited’ is more a measure of coming to the table with one option rather than the full toolbox you actually have available.”
The Future of Targeting
With a year still to go before Google’s change takes effect, publishers and advertising industry players are already moving quickly and exploring alternative identity resolution solutions.
For its part, Google is developing what it calls the Privacy Sandbox as an alternative to cookie-based targeting. While the precise details are still being developed, the Sandbox would, among other things, rely on group-based rather than individual targeting, giving advertisers the ability to target clusters of consumers with similar interests and behaviors.
Meanwhile, ad tech vendors and groups like the Interactive Advertising Bureau (IAB) are at work on their own solutions. The IAB’s Project Rearc has brought together hundreds of organizations, including publishers, advertisers, and vendors, to develop privacy-first alternatives to cookies.
At this point, however, these projects are still in their early stages, and Boathouse is closely monitoring their development. In the meantime, first-party data will take on an even more important role in learning about audiences and serving relevant ads.
For that reason, first-party data is among the topics you should be discussing with your agency as you work to define a road map for the future. Be sure that your agency can explain not only what first-party data is, but also how it can serve as the backbone of your martech stack in a cookieless future.
Come to the table with questions like these to make informed decisions about a world without cookies:
What sources of first-party data does my organization have available? How is it currently being used?
What are the martech systems and tools that house the first-party data?
Are there regulatory concerns that might affect our ability to use first-party data?
Which of our advertising practices currently rely on third-party cookies?
How is Boathouse Taking Action?
Even with all of these changes afoot, Boathouse experts are at ease—thanks in large part to an evergreen, proactive approach to media planning and buying.
“When it comes to bringing in the best technology partners, we’ve always taken an agnostic approach that’s aligned with each client’s target audience and KPI goals,” says Lurie. “It’s never a one-size-fits-all outlook. And there are still so many tactics to be tapped into that aren’t going away with these changes.”
Rather than work with one technology partner like some agencies, Boathouse actively engages with a variety of partners to ensure it brings the best solutions to bear for its clients—even as the situation is constantly evolving. Lurie says, “We’re always going to have the right partners at our disposal and be able to address what’s happening, whether that’s right now, tomorrow, or in a year.
“Boathouse is always able to make decisions with its clients in the moment, rather than rely on a—no pun intended—cookie-cutter approach that they might find elsewhere. And that’s going to be really crucial to taking action during this time of change.”