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RIP Third Party Cookies - What’s Next?

RIP Third Party Cookies - What’s Next?

2023 spells the end of third-party cookies as we know them. But marketers heavily reliant on these targeting devices need not despair - there are many interesting alternatives which allow companies to track their users and still remain privacy compliant. We take a look.

What happened?

In January 2020 Google announced that it would be phasing out third-party cookies from its Chrome browser effective 2022 and in June 2021 this ban was delayed until 2023. Google stated that the reason for this move was to satisfy users who wanted greater privacy.  

"Users are demanding greater privacy--including transparency, choice, and control over how their data is used--and it’s clear the web ecosystem needs to evolve to meet these increasing demands"

Firefox and Safari had actually phased out third-party cookies in 2013. But the announcement from Google was seen as critical because Chrome is the biggest browser in the world. In 2021, Google Chrome made up almost 65% of the web browser market.

Google has been building up to this for some time. In August 2019 the company revealed its “Privacy Sandbox”, an initiative to personalise (or target) web ads while still preserving user privacy. Privacy Sandbox APIs require web browsers to take on a new role - acting on the user’s behalf - locally, on their device - to protect their identifying information as they navigate the web. So far the Privacy Sandbox has received mixed reviews, leaving many advertisers wondering what the future will look like.  

What exactly are third party cookies and why are they important?

Third-party cookies are used by ad companies and advertisers to track a web user’s activity as they go around the internet, building a profile of them and their interests based on the sites visited and using that to target them with the most relevant ads. This personalised advertising is one of the most effective tools of online marketing, but also one of the most controversial.

Most users are aware that websites they visit collect their data (so called “first party cookies”) and are happy to opt in / out of these by indicating this on the consent banner which comes up when they click on a website. In short, when it comes to first-party cookies, users are aware of their relationship with the website they are on and are in control of it. Third-party cookies are controversial because they are stored under a different domain than the one the user is currently visiting and most web users are unaware that these external ad trackers are collecting their information, without their consent. Ad companies like Google either sell this data for profit or make money by using it to help marketers improve the targeting of ads.

The end of third-party cookies is not the end of tracking!

Google has announced that it won't be building "alternate identifiers to track individuals as they browse across the web, nor will we use them in our products." Is the end near for advertisers who heavily target ads using third party cookies? Not quite. Here are some alternative ideas.

  • First-party cookies

Chrome will still support first-party cookies and in their 2021 announcement Google described these first-party relationships as "vital." With first-party data, you glean indicators into an individual’s interests and intent. This data is extremely valuable when it comes to personalisation - it includes a user’s clicks and in-depth behaviour such as hovering, scrolling, and active time spent, session context, and how that person engages with personalised experiences. The end of third-party cookies means that marketers will be able to focus directly on developing relationships directly with their own customers through first-party cookies.  

  • Zero-party cookies

Zero-party data, a term coined by Forrester Research, is data which a customer intentionally and proactively shares with the brand. While by no means a new concept, innovative brands are getting excited about zero-party data because it is generally very accurate, comes with a customer’s consent and respects their privacy. Incentivising zero-party data is also a key trend. Some examples of how brands gather zero-party data include:

  1. An Instagram poll which helps a brand to gain more insights into a customer’s preference and style
  2. An email asking for customers to submit their birthday, in return for special offers on that day
  3. A loyalty card which tracks and incentivises a customer to make their purchasing data available, in return for discounts and special offers.  
  4. Contextual advertising

  • Contextual advertising

This is simply the practice of ensuring ads appear in the most relevant places by employing “crawlers” that analyse the content being consumed, rather than the specific person who is consuming it. This has traditionally been achieved through keyword targeting, but in the new post-third-party-cookie world the opportunities are even more exciting. Natural Language Processing (NLP) and Machine Learning are now being employed to understand the context and sentiment of webpages, rather than simply read the words, so that ads are placed in the most optimum environments.

  • Cross-device targeting

Today’s consumer owns a range of connected devices. Marketers therefore face the challenge of ensuring that the intelligence gained on how a web user behaves on one device, informs the advertising they receive on another. Cross-device targeting tools can help to identify the same person or household across many different devices by collecting data such as operating system IDs, IP addresses, online registrations and data from partnering publishers to fuel a highly accurate machine learning algorithm. This ensures that with a relatively high degree of accuracy users can be targeted across their devices.  

  • Server side tracking

It is fiendishly complicated but in a nutshell - rather than collecting data from the client (web browser), events are collected on the server side. Google Tag Manager now supports this. The main advantages of server side tracking are that it can eliminate incorrect data caused by compromised browser extensions and data loss, and can significantly increase data quality and user experience, also with regard to features such as page load time.