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What does a cookieless future mean for marketers?

Estimated reading time: 6 minutes.

Third-party cookies have been used by the digital marketing industry for many years. Fundamentally, they ensure a ‘digital identity’ is maintained as a user navigates the web.

Ad targeting and attribution (did the enquiry come from Google or Facebook ads?) and managing ‘identity (from authenticating users to keeping track of items in a shopping cart) have been dependent on these cookies. However, from 2022, we will have to make do without them.

This ‘cookieless future’ has been prompted by Apple – and recently cemented by Google. These big tech companies control how the majority of users access the internet – with the Safari and Chrome browsers.

In recent years, consumers have become increasingly aware that their activity online creates a stream of data (which can be used in various ways). Seeing this trend as an opportunity, Apple and Google have started to compete for the moral high ground on the issue of ‘privacy’.

Both companies have taken steps to prevent third-party cookies from being stored in their browsers. As a result, ad targeting, tracking attribution and digital identity will become seriously more difficult – despite their benefits to the general public. (Afterall, wouldn’t you prefer to see an ad for something you’re interested in, rather than a random product?)

The death of cookie tracking: a brief history

Historically, browsers have enabled users to manually disable third-party cookies. However, to make the change one needs to navigate a path of complicated settings.

In June 2017, Apple started the nuclear winter for digital marketing with the progressive rollout of Intelligent Tracking Prevention (ITP) from June 2017. The initial focus was on preventing cross-site tracking via third-party cookies in Safari. Since then, the restrictions have increased – in February 2019 first-party cookies were included, and then LocalStorage of cookies was blocked in September 2019.

In March 2020, Apple went further and moved to block third-party cookies by default in Safari.

Until then, the effect of these changes on a brand has been largely dependent on the use of Safari by their target audience for web browsing. However, Firefox followed suit in June 2020 and then in January 2020, Google announced that it would phase third-party cookies out of the Chrome browser by 2022.

So come 2022, digital advertising techniques relying on third-party cookies will become extinct. If you rely on first-party cookies (e.g. for web analytics and on-site personalisation for eCommerce), you will be affected, but not to the same extent.

What does the cookieless future mean to marketers?

Already approximately 40% of total web traffic (including 56% of mobile traffic) is now attribution-less, meaning digital marketers are struggling to accurately account for billions of dollars of ad spend. Let’s look at the effect of the demise of cookies on three key areas: digital identity, ad targeting and attribution.
Digital Identity

Key metrics such as cost per acquisition, how many people saw the ads, purchases, add to cart figures and return on ad spend have become unreliable due to the inability of marketers to tie ‘actions’ to end users.

Ad Targeting​

The most challenging issue for marketers is the loss of the ability to target ads. Afterall, the tide of money flowing from traditional media to digital has been due to the ability of digital marketers to target highly-specific audiences.

As a result, marketers will need to resort to tactics that are likely to not be as reliable as third-party cookie tracking – as advertisements won’t be as targeted (relevant) to the end user. This is really a negative for both marketers and consumers: marketers see lower ad performance and consumers see less-relevant ads.

Attribution

Attribution is the process of crediting outcomes back to specific actions, so that a customer journey can be mapped. For example, a user might see a Facebook ad, then later do a Google search and click on an ad. A week later, they might perform another Google search and click on an organic result before placing an order on the website. Attribution allows some ‘credit’ for the sale to be apportioned to each of those marketing channels.

When analysed at scale, attribution data has been a powerful way to make advertising budget allocation decisions. With the demise of cookies (and the consequent loss of user data), attribution will no longer be possible – leading to less-informed decisions and ‘wasteful’ advertising spend.

So is a cookieless future the end of digital marketing? Of course not. Businesses still need to promote their wares, so marketers will simply need to change their tactics.

How will marketers operate following the demise of cookies?

First-party data
Without cookies, there are still a few ways for marketers to stay in business. As discussed above, the ‘cookies’ issue is really an ‘identity’ issue.    While third-party cookies will no longer be available, it will be possible to use first-party, authenticated data. For example, user sign-ins on a website will enable marketers to de-duplicate visitor data and measure customer loyalty. With a shift to more first-party data analysis, there will likely be a rise in ‘personalisation’ through the linking of website data to CRM, point of sale and support channel analytics.
Walled gardens

Until recently, ‘identity’ was in a sense portable. Marketers could track users across platforms using Google’s DoubleClick ID. However, Google has since blocked this function due to privacy concerns.

You can, however, still analyse user-level data within the walls of ‘Google’ – albeit in a modified way. For example, you can upload your own datasets and join it with Google’s data (even at the conversion level) in ‘Ads Data Hub’. This use of data is now known as a ‘data clean room’ – a safe space where insights gleaned from the ‘walled gardens’ (typically of Google and Facebook) are commingled with first-party data from advertisers for measurement and attribution.

With walled gardens, the problem then becomes not so much an inability to do attribution modeling, but a lack of insight into the customer journey across media channels.

We suspect this might lead to brand managers deciding to go ‘all in’ on one platform (i.e. Google or Facebook), so they can acquire the desired for holistic view for attribution purposes.

Contextual advertising

One solution for a world without third-party cookies is contextual advertising – where ads on the page directly relate to the content. When done correctly, your brand will display while prospects on the purchasing journey.

However, contextual advertising has its own limitations. For example, when too many ads display on a page, they can clutter the content and frustrate consumers – potentially to the point of ‘banner blindness’, where they dismiss them altogether. 

So, our advice, while some third-party data is still available, take the opportunity to test going ‘cookieless’ now. Work out now how you will operate when cookies are gone. Experiment with contextual advertising techniques and compare the effectiveness with your current strategies. You’ll then be one step ahead of the competition.

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