In the summer of 2022, Google announced it would push back the date of its third-party cookie phaseout from late 2023 to 2024. Digital marketers have relied on these little packets of code for years to serve users with more personalized ads and smooth user experiences.
That’s why the death of cookies is likely to change digital marketing as we know it. Without third-party cookies, marketers will lose valuable data about their target audiences, including demographic information and browsing habits. Those who are unprepared are likely to experience serious losses in revenue.
So how can marketers survive this cookie-less future? Investing in the development of alternative technologies and advertising channels may be the most promising solution.
What are cookies?
Cookies are text files that gather data about you and your browsing activity. They identify your computer while you’re connected to a computer network. More specifically, HTTP cookies can be used to identify and track specific users.
There are two types of HTTP cookies in use today:
- Session cookies: These cookies are only active while you’re on a website. They’re stored in your device’s random access memory (RAM) and are deleted at the end of your session.
- Persistent cookies: These cookies embed into your device’s hard drive and remain for an indefinite amount of time. Some have an expiration date when they are automatically deleted.
Digital marketers use both to track user behavior and understand their target audience. There’s also a difference between first-party and third-party cookies, which depends on who owns the cookie.
What are first-party cookies?
When you visit a website, you might be prompted to accept cookies. These are first-party cookies, and they collect information about your activity on that particular site to improve the user experience.
For example, many websites use persistent first-party cookies to remember user login information and custom page configurations. This capability enables publishers to provide a smooth, streamlined user experience. It also allows them to monitor valuable analytics like session length, bounce rate and time spent per page.
The main difference between first and third-party cookies is where they collect information. First-party cookies are website-specific. Once you click off the site, first-party cookies stop tracking you.
What are third-party cookies?
Third-party cookies, on the other hand, follow you across the internet to collect information about your overall browsing habits. They work by embedding a persistent file on your computer to gather data as you surf the web.
Unlike first-party cookies, third-party cookies are generated by companies other than the owners of the site you’re browsing — typically, digital advertising agencies. When you visit a site, the cookies track your site activity and send it to the third party who created the cookie.
The file collects and saves data about your browsing session, such as the sites you visit and how much time you spend on certain pages. Then, it sends this data back to the third party who created the cookie so they can use it to build out individual and group audience profiles.
How do third-party cookies benefit brands?
Third-party cookies allow brands to gather a treasure trove of data about their audiences. That’s why digital advertising agencies are so reliant on third-party cookies. About 83% of marketers rely on data collected by third-party cookies to drive their marketing strategies.
You’re probably familiar with these cookie-based marketing techniques:
- Retargeting: Tracking users and serving them ads for products or pages they viewed earlier.
- Ad targeting: Serving users specific ads based on their unique browsing histories and individual profiles.
This data helps you understand your audience on a deeper level so you can determine how best to market to them. The more data you have, the more accurately you can cater to your audience.
When and why are third-party cookies going away?
Google Chrome will join Firefox and Safari in eliminating third-party cookies by late 2024. The company originally intended to phase cookies out by early 2022, then pushed the date back to late 2023. Google then extended the deadline a second time to give themselves and other advertising companies more time to test the new provisions and plan out alternatives.
This change is a big deal, especially since Chrome handles the vast majority of web traffic. In 2022, Chrome made up 65.86% of the global browser market share.
According to Google, the company will not develop a new ID to replace third-party cookies after abandoning their Federated Learning of Cohorts (FLoC) algorithm.
Now, Google plans to stop using all IDs in their products and services. Instead, they will use privacy-preserving application programming interfaces (APIs) to deliver results for advertisers and publishers.
Google has chosen to take a phased approach to third-party cookie blocking to give brands and marketers time to plan their next steps.
Why is Google getting rid of third-party cookies?
Privacy is the main push behind the cookie’s demise — in a survey of 2,000 U.S. adults, 86% said data privacy is a growing concern for them. According to that same survey, 70% of surveyed companies reported increasing data collection efforts since 2020.
This concern is completely valid. Until 2018, users had no control over when companies tracked them with cookies. That year, legislators passed two key regulations on third-party tracking:
- GDPR: The General Data Protection Regulation (GDPR) mandates that websites must ask for consent before using cookies on users in the European Union and the European Economic Area (EEA).
- CPRA: The California Privacy Rights Act (CPRA) is similar to the GDPR, but it is specific to California residents.
How will the death of third-party cookies impact the advertising industry?
With Google cookies going away, you might be wondering how this change will affect digital advertising. We’ll be honest — it’ll be a dramatic change.
Many marketers rely on third-party data to inform ad campaigns. According to a recent survey, 41% of marketers believe the loss of third-party cookies will b