Marketers that rely heavily on third-party cookies for their paid search and programmatic advertising are about to hit a major roadblock.
Until recently, advertisers had access to valuable third-party data and targeting options from giants like Google and Apple. Over the years, these companies have gathered massive amounts of consumer data worldwide—and companies everywhere have eagerly bought it.
This data supercharges targeted advertising campaigns, and without it, advertisers will need to determine new ways to collect, use, and market data points they have relied on for years.
But Google’s cookie jar is closing soon—and for good.
The good news is we have a bit more time than initially expected. Google announced on July 27, 2022, they’ve delayed phasing out third-party cookies in Chrome from late 2023 to late 2024.
If you're a marketer or brand relying on third-party cookies to run targeted ad campaigns, it’s time to start collecting first-party data now, so you’re ready when Google shuts the lid.
Let’s get started with basic information about data.
First Party vs. Third-Party User Data
You need to know what first-party data is, to understand third-party data.
Defining First-Party Data
Any user information collected directly by your website and intended to enhance the user experience is categorized as first-party data. First-party data is the most accurate and complies with General Data Protection Regulation (GDPR). It includes:
- Customer feedback surveys
- Email engagement
- Login credentials
- Language preference
- Purchase history
- Sales interactions
- Shopping cart items
- Support calls
- Website activity
Third-party data collects the same user information as first-party data. However, it’s collected by companies that do not have direct relationships with the users.
Often, these companies pay certain websites for their user information. The data is then stored in snippets of code called third-party cookies and pieced together to create detailed user profiles.
Third-party websites commonly use third-party cookies to build marketing profiles. Marketers and advertisers then use these profiles to create highly targeted ad campaigns, giving consumers a highly personalized experience with tailored ads and content.
Eliminating third-party cookies crumbles a company's ability to leverage this data to increase conversions and generate revenue.
Why Is Google Eliminating Third-Party Cookies?
Today’s online users demand more privacy, transparency, choice, and control over how their data is used.
According to two surveys by Statista in 2022, 42% of U.S. consumers stated they were concerned or very concerned about their online data, and 74% of respondents said they were worried about brands viewing and tracking their online behavior to target them with advertising.
The move to eliminate third-party cookies follows a recent ruling by the GDPR, the most extensive data privacy and security law worldwide. It was drafted and signed into law in 2018 by the European Union (EU) and carries immense legal responsibilities for organizations across the globe.
Recent Developments from Google
In January 2020, Google announced it would begin phasing out third-party cookies on its web browser.
Chrome owns nearly 67% of the market share worldwide and is the only major web browser that does not block third-party cookies by default.
After announcing a delayed start earlier this year, Google published another updated timeline in July 2022 that outlines new cookie depreciation milestones. These milestones ostensibly push the launch of the phase-out from mid-2023 to mid-2024, with planned completion by late 2024.
In response to the delay, Google’s Vice President of Privacy Sandbox, Anthony Chavez, says,“The most consistent feedback we’ve received is the need for more time to evaluate and test the new Privacy Sandbox technologies before deprecating third-party cookies in Chrome.”
How are advertisers using third-party data right now?
Advertisers use third-party data to target new audiences that align with their existing buyer personas.
For example, let’s say someone is searching for a plus-size retailer specializing in high-end luxury apparel in Fresno, CA. Third-party data helps advertisers group target audiences into smaller segments, allowing them to market their services more effectively to local audiences.
What does cookie-cutting mean for retailers?
Gathering data from first-party cookies will become increasingly important. Now is the best time for marketers to create timely, relevant content that’s so compelling users will gladly exchange their personal information to access it.
If you rely on third-party data from external sites to advertise and track consumer activities, it's time to overhaul your marketing strategy. Find alternative ways to deliver hyper-targeted content to prospects and consumers.
Several tech giants cutting their cookies, too.
Google isn’t the only tech giant tightening its lid on privacy. Facebook and Apple are also making plans to eliminate third-party cookies.
According to Graham Mudd, Facebook’s VP of Product Marketing for Ads, the company’s targeted ads will evolve over the next several years to accommodate increased user privacy and less granular ad targeting.
In the meantime, they're focused on outpacing Apple's privacy changes with Conversions API. This software directly connects your marketing data and the Facebook systems, which will help optimize ad targeting. Essentially, advertisers will need to rely on Facebook's Conversions API to collect data about users' interactions with their Facebook ads.
Unfortunately, in September 2022, Facebook was sued for illegally collecting user data. Though Facebook owner Meta denies these claims, the suit states Facebook is circumventing Apple's App Tracking Transparency (ATT) rules by opening links in an in-app browser rather than the user's default browser.
This is in clear violation of Apple’s new iPhone privacy rules.
As a result, iPhone users are opting out of data tracking in droves via Apple’s privacy features.
In April 2021, Apple rolled out new privacy rules. These rules require apps to obtain explicit permission using an opt-in prompt before tracking user behavior across devices and websites.
Unless users voluntarily opt-in to allow data tracking, app providers lose the ability to track users across platforms and deliver tailored ads.
According to Flurry Analytics, 94% of active mobile users have opted out of device tracking for ads since Apple rolled out iOS 14.5 privacy changes.
What can marketers do?
Marketers must pivot and focus on alternative strategies like organic and paid SEO tactics to build first-party data through lead nurture programs.
To recap, Google will phase out all Chrome browser third-party cookies by late 2024.
However, they're looking into alternative Privacy Sandbox technologies to access user data in a way that preserves anonymity. Implementation details are yet to be published. Google announced Topics API earlier this year. This API aims to give marketers topics users might be interested in based on recent browsing activity.
As of now, there’s no official release date for Topics API.
What can marketers do?
Google remains confident that privacy-preserving mechanisms like the Topics API can sustain a healthy, ad-supported web while making third-party cookies obsolete. In the meantime, marketers should prioritize first-party data collection across all digital platforms.
Four Ways to Prepare for a Cookie-less World
Now is the perfect time for marketers to prioritize first-party data collection. Here's what to do:
- Gather first-party data from the sources you have available, such as:
- Mobile apps
- Social media
- SMS (text messaging)
- Customer service interactions
- CRM systems
- Direct mail (using digital data to inform your offline campaigns)
- Make necessary CRM updates
Optimize your Customer Relationship Management (CRM) tool to collect, organize, and unify customer data. This gives marketers a holistic understanding of where, when, and how their customers interact online.
- Identify alternative tactics
Reach out to key media platforms to learn about their solutions. They may help you better navigate this change.
- Consider different strategies
Leverage keywords or topics to match ads to relevant sites using contextual targeting.
While a cookie-less world has been delayed until the end of 2024, marketers should adjust their strategies now to focus on first-party data collection. Those who do will be better prepared once Google seals the cookie jar for good.