Changing of the Guard – 3rd Party Cookies, Out.

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Q: What do a fortune cookie and an HTTP cookie have in common?

Answer: They both have a small, embedded text file with a unique bit of information!

Cookies were introduced to the internet in the early 90s to help implement virtual shopping carts in e-commerce platforms. Using cookie technology in this manner was the first instance websites were able to store unique data reliably in a user’s computer. As the use of cookies started becoming an important part of web development, questions about potential privacy implications started to arise.

Third-party cookies, or the cookies placed specifically for tracking and advertising purposes, in particular, pose a considerable threat to consumer privacy online. They lessen the control consumers have over their identity as well as sensitive personal information. With the rapid growth of internet usage and the awareness of individual user privacy over the past decade, there has been a growing demand for privacy requirements by users. This has led tech companies to rethink their data protection and privacy practices not only from an ethical but also from a business standpoint.

With consumer privacy being one of the most discussed issues in the cyber sphere in the past few years, many major browsers including Apple’s Safari and Mozilla Firefox disabled the use of third-party cookies altogether. Google Chrome initially announced that they plan to phase out the use of third-party cookies initially by 2022. Recently, they extended the deadline to 2024 in order to provide a smoother transition for digital advertisers with the replacement tools they are working on.

Let’s look at what it will mean to navigate a cookie-less internet, specifically what it means for digital advertisers who depend largely on it.

First-Party and Third-Party Cookies

The primary focus of First-Party Cookies is to improve the user experience of website visitors. Each cookie contains a small packet of data relating to various functions unique to the user on the website such as its language settings, sign-in details, and search preferences of the user that help personalise the user experience when they return. First-party cookies are stored directly on the specific domain or the website that a user visits.

Third-Party Cookies are a more commercial extension of the HTTP cookie technology, with a direct focus on user tracking, retargeting, and advertising. They are embedded on websites by third parties such as social media websites or digital advertisers using JavaScript. Third-party cookies are also called trackers since they help third parties to keep track of the visitors to chosen websites. Many commercial websites use social media platforms and advertisers that use third-party cookies to increase their page views.

The Eventual Demise of the Third-Party Cookie

Cookies are not inherently evil. First-party cookies are quite an essential part of frequent web browsing. They make your browsing experience more efficient by remembering things for you and by personalising your sessions. First-party cookies are, for the most part, safe. If the website you visit is reputable, you can be assured that the data gathered in First-party cookies will not be compromised or used in a way that could harm you.

The possible dangers or privacy concerns in cookies lie in the way third-party cookies can be used to track your browsing history for commercial purposes. When a website features 10 different advertisers and social media platforms, your visits to that website can generate 10 different third-party cookies that can track your history across the website even if you do not click on an ad.

The removal of third-party cookies by major browsers has been in the works for a while now to improve both the privacy and the security of internet users. Tor browser was a pioneer in the movement offering private browsing by default, clearing cookies, blocking trackers, and other advanced privacy measures for all kinds of browsing. Safari 13.1 was released in early 2020 with updated privacy features blocking third-party cookies for all users by default.

Mozilla Firefox has been introducing a range of anti-tracking features to its users since 2015. They turned on their enhanced tracking protection features by default to all users in 2019. In mid-2022, it announced the rollout of its “Total Cookie Protection” feature, which is its strongest privacy protection to date. Their method was to create a separate “cookie jar” when you visit websites that confine the cookies only to those websites. No third-party websites can reach into these confined “jars”, allowing them to track user behaviour.

Due to their decision to delay the third-party cookie phase-out, it may seem that Google is late in the game. However, they have been working on creating a more private and secure browsing experience for a while now. Google is one of the biggest stakeholders in today’s digital advertising space. Therefore, they need to make the pivot towards a cookie-less future while ensuring that digital advertising will not fail entirely. In a 2019 blog titled “Building a more private web”, they announced Privacy Sandbox. It is an initiative that works on ensuring consumer privacy while also providing the necessary tools for digital advertisers. Privacy Sandbox will be discussed more in detail later in this article.

Now What? — Tools for Third-Party Cookie-less Digital Advertising

The allure of digital advertising lies in its ability to laser-target the audience. Offline advertising methods are often a shot in the dark. They do not come even close to the accuracy of audience targeting capabilities of digital advertising, especially in social media platforms. Third-party cookies play a large role in audience targeting and reach, performance analytics, and overall ad campaign management. So, now that the third-party cookies are going away, what will replace them to maintain the quality of digital advertising?

1. Leveraging First-Party Data

Rest assured, not all cookies are going away with the phase-out. First-party cookies will remain helping websites track basic user data used to increase user experience. Advertisers can use first-party cookies in their ad campaigns. Moreover, there are various other ways data can be gathered directly such as email sign-ups, surveys, and more. The Privacy Sandbox tools that Google is introducing will specifically allow features to leverage first-party data. There is always the added advantage of the control and ownership advertisers have with first-party cookies and data rather than relying on third-party data.

2. The Privacy Sandbox by Google

The Privacy Sandbox is the solution provided by Google to the digital advertising industry that relies largely on third-party cookies. It comes with innovative features that protect consumer privacy while offering creative tools for developers and advertisers to continue with successful digital advertising campaigns. As of now, they have announced that Privacy Sandbox comes with several programming interfaces that help keep track of ad performance, conversions, and attribution.

A potential outcome of Privacy Sandbox will be creating a Universal Identifier for the users that do not rely on third-party cookies as they do now. The identifiers will not be based on the personal details of a user. They will be based on a probability marker that predicts a category a user will be a part of, which removes the need for third-party cookies and increased the accuracy of audience targeting.

3. Contextual Advertising

“If Content is King, then Context is God”, Gary Vaynerchuck — Contextual advertising is as simple as it sounds. The advertising is placed in spaces that are directly relevant to the product or the service advertised. An ad for clothing would be placed on a fashion blog, or an ad for a new smart device would be placed on a tech blog. The most popular example of contextual advertising is Google AdSense. Contextual advertising eliminates the need for third-party cookies since the ideal target audience is covered contextually.

4. Customer Data Platforms

Customer Data Platforms or CDPs are software systems that gather customer data and consolidate them into a single, easy-to-use, database. A CDP is not simply a platform to automate advertising. It is more advanced, intuitive, and equipped with more features when compared to Customer Relationship Management (CRM) software. It gives advertisers control over the entire process of serving advertisements to an audience of first-party data. With the use of a CDP, data can be gathered in real-time from various sources. It helps create unified profiles using the data gathered and generates detailed analytics, making it easy to use in any advertising campaign.

The Bottom Line

A (third-party) cookie-less future is not as hopeless as it sounds, thanks to the many alternatives still available to digital advertisers, and the newer tools that are being developed. Until Google perfects its Privacy Sandbox which promises to provide the best of both worlds — increased user privacy and better audience targeting for advertisers — the best way to navigate the transition is by seeking more ways to gather high-quality first-party data while also using many available tools that do not require third-party cookies.

At Dovetail Group, we provide simple, yet effective revenue growth services and solutions to make everything work as it should.

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