Third party cookies have been used in Google and other search engines for years. They have allowed companies to track user behaviour online such as website visitors and change user experience and ad preferences in order to target the correct audiences. However, in the next year this is all about to change, which marks a shift in the way that brands and marketers are able to track the right data.
As a brief definition, cookies are harmless files a website can put on your computer to collect information. A third-party cookie means that these cookies are set by a website other than the one you might be browsing on and therefore the information collected is also sent to them. The Google Analytics service is an example of a third-party cookie, which is used by website owners on around 56% of all websites on the internet to track their visitor activity such as session duration, bounce rate and user origin.
The History of the Phase Out
Initially, Google announced the third party cookie phase out in February 2020. Their primary reasoning for getting rid of cookies is due to the privacy issues that they raise and the fact that users are asking for more privacy, transparency and control over how their data is collected and used. While services such as Google Analytics aren’t at the forefront of the debate, third party cookies can facilitate dangerous advertising models when they allow adtech companies to track users across multiple websites. This is why, if you’ve been browsing on JD sports at trainers, you might spot a Nike trainers advert on your Facebook timeline.
Google isn’t the first search engine to suggest this change, Safari and Firefox had already phased out third party cookies in 2013 by blocking them. In 2020, Google said that they aimed to completely discard the cookies by 2022, in order to smoothly transition with advertisers so that the online advertising business is not destroyed. However, in June 2021, it was announced in a blog by the privacy engineering director for Google Chrome that this date has now been pushed back to 2023, as more time is needed to “get this right”.
The Effects of the Third-Party Cookie Phase Out
It’s important to note that not all cookies are being banned, so not all cookie-centred marketing strategies will become obsolete. First party cookies, i.e., ones set by the website you’re browsing on will remain in place. In fact, Google has previously called first-party relationships ‘vital’. The uses and benefits of first party data will be discussed later in the post.
Furthermore, contextually based targeting such as Pay-Per-Click (PPC) advertising will not be affected since it is based on searches that users manually perform online and not from behaviour information from cookies. You can find out more information on this type of advertising on our PPC services page.
Privacy Sandbox
In place of third-party cookies, Google is implementing its own privacy system called ‘Privacy Sandbox’. This new initiative that Google has been developing since 2019, aims to better safeguard user privacy by restricting tracking as you browse across the web and limiting how much information a site can have access to. This is great news for users, as their data is being protected without having to sacrifice a dip in user experience which came from blocking third party cookies.
In terms of advertising, Privacy Sandbox details different way its aims to provide targeted ads without the need for third party cookies. The first way is through topics. Topics will be recognisable categories that a browser infers based on the pages that you visit e.g., sports. This means that the specific sites you’ve visited aren’t shared across the web. Additionally, Google are providing the option to remove any topics you don’t like or disable them completely in Chrome settings.
Federated Learning of Cohorts (FLoC) is a proposal to cluster users with similar browsing patterns into large groups; however, this development ended in 2021.
Finally, Google aims to provide ads based on the websites you have previously visited or for products you have recently viewed. Once again this won’t rely on the use of cookies, but rather as you browse the web, the sites of advertisers you’ve visited can inform the browser that they want to show you ads in the future. This includes showing the browser the specific ad they want to show you and how much they’d pay to show you an ad. Currently, this approach is called First Locally-Executed Decision over Groups.
The Future of Google Analytics
As previously mentioned, Google Analytics also relies on third party cookies to collect its data and therefore it will be monumentally affected by the upcoming phase out.
It is unclear whether or not Google will create a cookie-less tracking alternative in order to preserve GA, such as a server side analytics alternative. That being said, GA4 the new Google Analytics update, will use AI insights and predictions powered by machine learning which will alert you to significant trends in your data and hopefully help close the gaps that cookie-less tracking is causing. Despite this, until the third-party phase out occurs, it is still important that you have analytics set up and updated to the latest version. Then, it’s time to start thinking about collecting and emphasising first party data.
A Move Towards a First Party Data Strategy
Fortunately, the third-party cookie phase out does not have to be a crisis for website owners who rely on this type of data collection to provide insights. Instead, a potential solution could lie within first party data and creating a new strategy based around it.
What is First Party Data
Any company with a customer has and uses first party data. It is data about a company’s customers that is directly owned by the company not by external websites, much like how first party cookies are implemented directly by a website owner.
First party data is the information that you can directly get from your customer relationships, and it is the foundation for understanding them based on the different touch points that they have with your brand. Whilst this data can come from a variety of places (on and off screen), the most common first party data sources are: website, mobile apps, email, SMS, point of sale and CRM. Additionally, the data can be more accurate and current since you aren’t relying on any external sources.
A First Party Data Strategy
While most brands already use this data to a certain extent, it is possible to create a first party data strategy, which will be vital preparation to the third-party cookie phase out.
A key element in your data strategy is that you need to know who your customer is so that you can deliver the best experience. This means responsibly identifying customers on your site, sometimes by simply asking. Asking for user consent is vital and be open about what they are consenting to, i.e. customised advertising.
Normally, first party data has a smaller scale compared to third party. Therefore, it is important to use this data along with a strong value exchange strategy and from there create larger targeting lists. Post purchasing data highlights if buyers are engaged or at risk of leaving. If purchases dramatically drop, you can use first party data to identify the problem because you have a full customer view across the entire buying cycle. Inversely, you can also use this to drive existing customers to buy additional products.
Other benefits of using a first party data strategy are:
- An enhanced ability for advertisers to reach and convert customers.
- A more accurate approach to measurement and reporting of data.
- Greater visibility into customers who express interest in a product or your brand.
- The ability to provide more relevant and timely customer engagement, which provides better user experience.
The phase out of third-party cookies is a large change for businesses and advertisers who have relied heavily on this type of data collection and despite the challenges that it will present in 2023, it seems as if it will not spark the end of tailored adverts and marketing strategies and ultimately benefit users thanks to more privacy and protection when browsing. The shift towards a first party data led strategy also seems to be the future for many brands, especially those who are looking to create personalised customer experiences, rather than a one size fits all approach.
If you need any advice on third party cookies or online marketing strategies, get in touch today!
