What's the Impact of Third-Party Cookie Removal

On Wednesday 3rd March Google announced that in addition to removing support for the third-party cookie, they wouldn’t be replacing them with any similar style individual trackers. In this article we’ll look at what impact this could have on the digital advertising of small businesses and small marketing teams, and what you can do to minimise that impact. However, don’t panic – it’s not all doom and gloom, we assure you! The main elements impacted by this change will be programmatic advertising, and the need to bring your data in-house, really getting to know your customer – which we’re all doing already – right?

Who doesn’t love a cookie?

We do, we do! Personally we prefer chocolate chip cookies, and absolutely adore the Cookie Monster from Sesame Street. But it appears not everyone does.

Cookie Monster Eating GIF by Sesame Street - Find & Share on GIPHY — via GIPHY

In 2020 Google announced that they intended to remove support for third-party cookies by 2022, and were looking to “build innovations that protect anonymity while still delivering results for advertisers and publishers”. If you’re a Firefox or Safari user, you might be thinking “but haven’t third-party cookies been blocked for ages?” and you’d be right, as Safari and Firefox both blocked third-party cookies back in 2013.

But Google has taken a more cautious approach, commenting that “the changes will happen over the course of two years as they work with advertisers to ensure that this pivot doesn’t destroy the online advertising business”. A move which we feel is a wise one, given that they have the largest share of the web browser market – with more than 64.1% of the global browser market according to Statcounter.

On Wednesday 3 March 2021 Google further announced that yes, third-party cookies were over and more importantly they wouldn’t be replaced with a similar style individual tracker – stating “once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web”.

The Competition and Markets Authority said in January 2021 that Google’s plan to remove the cookies could have a “significant impact” on the advertising market. There is also a group of marketers – Marketers for an Open Web – who are opposing the level of control that Google will potentially gain by eliminating such cookies.

What are third party cookies?

Third-party cookies are used by advertising companies to track users as they navigate throughout the web – the cookies build up a profile, or picture of a user from their browsing habits, and use this profile to target adverts to them.

Google has third party cookies installed on millions of websites, each feeding data about users back to Google, which in turn powers the advertising machine, a massive part of Google’s business. In fact over the last 20 years the growth in online advertising revenue is mainly due to the granular targeting and audience segmentation enabled by third-party cookies.

With third-party cookie data, as an advertiser, we can learn about our website visitors overall online behaviour, for example what other types of website they like to visit, what types of products they purchase and what they are interested in. All of this data enables us to create retargeting lists or similar audience lists, to effectively example our paid for audience reach.

Why remove third-party cookies?

Consumers are growing wary of the information and data that some companies hold about them, and how they are using this information, especially when it is done without explicit consent or transparency. Many have taken to using ad blockers (functionality built into browsers that stops ads from being displayed).

According to a study by Pew Research Center:

“As our industry has strived to deliver relevant ads to consumers across the web, it has created a proliferation of individual user data across thousands of companies, typically gathered through third-party cookies. This has led to an erosion of trust: In fact, 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits.”

David Temkin, Director of Product Management, Ads Privacy and Trust at Google adds that

“People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.”

What is the impact of Google removing third-party cookies for advertisers?

For years if you talked to a digital marketer or a marketing agency, all you would have heard is “cookie, cookie, cookie”, and no, it wasn’t because we were hungry. We’ve been using cookies for over 25 years to help us target our advertising and learn more about what our customers are doing on the web.

The removal of third-party cookies by Google could really impact some areas of online advertising, especially if your business has relied on third-party data for your online targeting approach.

Third-party cookies enable us to do:

personalised ad targeting;
cross-site retargeting;
social buttons posting;
third-party services placing (such as chatbot);
impressions measuring to user actions;
detailed analysis.

If you rely on third-party cookie data for your advertising, you might be thinking you’ll need to find another way to reach your customers, but please don’t panic.

Even without third-party cookie data, we’ll still be able to leverage and target the majority of what Google Ads has to offer (fantastic!) as this will be powered by Google’s first-party cookie data.

Where we do think we’ll see an impact is with programmatic advertising partners. When Apple implemented their Intelligent Tracking Prevention function in Safari, ad tech companies reported decreased prices, and publishers showed a rapid drop in programmatic ad revenue. So we expect to see something similar if this is implemented without a viable replacement technique.

Google already thinks they’ve found a way using FLoC (Federated Learning of Cohorts – read more on this below) – FLoC is currently in testing, so we’ll have to wait and see how effective it will be – but it looks like it will be rolled out in Q2 2021 and Google say it should provide the same return-on-investment that advertisers are seeing from cookie-based tracking, and we can’t see Google wanting to lose all the revenue they gain from advertising.

So what cookies will I be left with?

We’re pleased to say that HTTP and First-Party cookies will be staying.

HTTP cookies – these are more often just referred to as cookies, are small bits of textual data placed by your website onto a user’s device. They help you understand how many users, clicks and sessions you’re getting on your website
First-Party Cookies – we use these to keep track of user engagement on your website for example shopping basket contents, login status. They are purely for your website, and no other web server can access them.

Tell me more about Google’s proposed solution FLoC!

Google has set-up FLoC or Federated Learning of Cohorts, which Google says is a “privacy-first” and “interest-based” advertising technology. Essentially FLoC will keep track of users behaviour on the web, but instead of then using this data to target adverts directly to individuals, they will place the user into groups or “cohorts” based on their browsing habits. They’ll then enable advertisers to target adverts to the entire cohort of users rather than individuals.

But what does this mean for me? What is the future for online advertising?

Firstly, we’ve got two years to adjust to a future without cookies, so again no need to panic just yet, and whilst we wait to see the outcome of Google’s FLoC testing, there are a few things that we think might help with your customer reach:

Embrace and own your first-party data – get to know your customer

And if you don’t yet have great first-party data, then now is the time to start building your Customer Relationship Database. Customers want to trust the businesses they buy from, they yearn to build relationships and know that they matter to you as a business owner.

When building up your CRM (Customer Relationship Management) system ensure that you get the correct and appropriate consent from your customers, how do you do this?

Build in the right consent management solutions to your website, customer comms and any engagement you have with your customers (phone, letter, carrier pigeon!). Ask them how they want to hear from you and most importantly what they want to hear from you
Ensure you ask for the right cookie consent on your website and adhere to it
Connect the dots – foster genuine relationships with your customers by connecting the dots across your touchpoints:
- Know that they converse with you on Facebook or Twitter as @KachiMarketing
- Listen when they talk about their dog being poorly (and don’t try to sell them some dog food the next day!)
- Use your CRM system to provide your team with the right information and a full picture of your customers, so everyone can be consistent in conversations
Engage with your customers, as you would with your friends (although maybe avoid the 6th pint of beer picture from Malaga – if we ever get back out on holidays!)

By using tools available, along with first-party cookies, you can really build great insight into your customers – create that long-sought after human relationship, and earn their trust and loyalty.

Contextual Advertising

Many digital advertisers dropped contextual advertising or keyword based targeting a number of years ago, in favour of behavioural targeting. But we expect to see this making a comeback, so if you’re one of the few that didn’t drop it, then you might be ahead of the game.

With contextual advertising the user will see more adverts based on the content they are actively searching for – for example if I’m on Amazon searching for a washing machine, then I’ll start to be served contextual adverts showing me other washing machines I might be interested in.

Utilise “Walled Gardens” or Closed EcoSystems

Sorry if you lost us there for a moment, to explain in plain English, walled gardens, or closed ecosystems are things like social media apps, eCommerce platforms or large search platforms. The majority of these are lightyears ahead of other ad tech platforms, because they’ve been building their first-party data for years and overlaying this with machine learning to apply trends and insight into consumer behaviour, in addition to this they also have obtained user opt-in permission to track and segment all the interactions with content within their network.

And Finally…Don’t Panic

We’re all currently looking for solutions – marketers, advertisers and data engineers alike – the best thing you can do right now is not to panic, but instead take a step back and review your advertising strategy, ask yourself:

Is your strategy too reliant on any one channel/method of communication?
Are you asking for the right consent from your customers?
Do you have control over your customer data – or are you relying on a third-party to help manage that for you?

We’re in for a bumpy ride whilst this gets sorted out, but let’s get on this rollercoaster together and, if we can, try to enjoy the ride.

If you have any concerns about the potential impact this could have on your digital advertising, why not book in a free no-obligation chat with our team at Kachi Marketing. We can help you identify if you have any concern areas, and hopefully – if we impress you enough – get the chance to work with you in the future!

Want more tips like these?

Want to receive content like this on a semi-regular basis? Then sign up to my newsletter where I’ll keep you in the loop on major industry updates that might affect your day-to-day work.