Google Is Crumbling Third-Party Cookies. Here’s Everything You Need To Know.
A summary for the not-so-techy:
- Google has started to phase out third-party cookies in Chrome, starting with 1% of users. This is a big deal for advertisers because third-party cookies have been essential for targeting ads.
- Cookies are like little helpers on websites that remember what you do. First-party cookies are the good guys that make your experience on a specific website better, like remembering your login details. Third-party cookies, though, track your activity across different websites to show you targeted ads, like those goldfish shirts you suddenly see everywhere after searching for them.
- Privacy concerns have led to this change. Google is not the first; Firefox and Safari have already blocked third-party cookies. By the third quarter of 2024, Google plans to remove them completely, responding to pressure from regulators like the EU.
- But it's not the end of targeted advertising. Google is working on new methods to keep some level of ad personalization without compromising individual privacy too much. This means ads will be less specific to you personally.
- Business owners and marketers need to rethink their strategies as the landscape changes. It's crucial to stay adaptable and look out for alternative marketing strategies in this evolving situation.
So, what’s a Third-Party Cookie?
(Personally, I love a good double chocolate chip cookie, and it’s even better when I can dip it in a gooey chocolate ganache.)
Although professionals in the advertising and paid media space have been besties with the cookie for years, broader managers, business owners, and decision-makers are only familiar with the baked kind. But this is a change that applies to anyone and everyone who is involved in marketing strategy as a whole.
Let’s start with the cookie.
A cookie is a little guy inside a website who remembers everything you do. For example, when you shop online, and all your delivery info is auto-filled, that's a cookie in action.
There are two types of cookies (in the virtual world).
- A first-party cookie lives on the website you visit. It observes and collects information about everything you do on this website, including your login information, purchase behaviour and your user data. Every website has first-party cookies, and they are not going anywhere. They are meant to be helpful and to improve your user experience. They are fantastic little guys!
- Third-party cookies are amazing for advertisers. They are tiny little trackers created and placed by “third parties” (hence “third-party” cookies) on the websites you visit. Their sole purpose is to observe and track your behaviour across the internet so that they can create a highly personalized user profile about you. For example, when you browse around the web looking for “goldfish apparel,” and after a point, all you see are ads for shirts with goldfish on them, that’s third-party cookies in action. These guys help decide which ads to show you based on user behaviour and are mainly used for cross-site tracking, retargeting and ad serving.
Although advertisers love third-party cookies, there are numerous cases of privacy violations by the end users - which brings us to Google’s latest announcement.
"To facilitate testing, Chrome has restricted third-party cookies by default for 1% of users. During this testing period, it is important for sites and services to start preparing for third-party cookie restrictions, including moving to more private alternatives. Subject to addressing any remaining competition concerns of the UK's Competition and Markets Authority, Chrome will ramp up third-party cookie restrictions to 100% of users from Q3 2024. "
Are we surprised? No. Mozilla blocked third-party cookies on Firefox in 2019, and Apple blocked third-party cookies on Safari in 2020. Given how much scrutiny Google is under for their advertising operations by the European Union, we are actually surprised it took this long.
Are third-party cookies gone for good?
As per Google, third-party cookies will be phased out by Q3 2024. But Google does have a few replacements in place.
Differential Privacy: A system for sharing information about a dataset to reveal patterns of behaviour without revealing private information about individuals or whether they belong to the dataset.
K-Anonymity: A measure of anonymity within a dataset. If you have k=1000 anonymity, you can’t be distinguished from 999 other individuals in the dataset.
On-Device Processing: Computation is performed “locally” on a device (e.g., your phone or computer) without communicating with external servers.
Quite simply, advertisers can continue to “target” our ads as usual, BUT there will be a lot more anonymity involved. For example, advertisers will have data about your interests but not niche data about whether you visited the Best Buy Black Friday Online Sale last November and made a purchase.
I don’t know how to feel about this…
A lot of people feel the same way. But if you are a business owner or a marketer and depend on online advertising, this is the time to recalibrate your marketing strategy. We still don’t know how big an impact this will have on your ROAS (Return On Ad Spend), but it’s safe to assume that it will be significant. We will see a higher competition for broad terms - and a lot more noise and a lot less specificity in targeting and ad delivery. All of this would mean that you will have to be truly exceptional in strategy to get in front of your target customer.
I only run Meta (Facebook) Ads. Does this affect me?
We don’t know. The next few months will be very enlightening on the actual impact of this change on Meta Ads, but right now, we are walking blind. The Meta Pixel uses both first-party and third-party cookies to enable targeting and optimization, and the impact will depend on how Meta uses these cookies.
Right now, we are in observe and react mode, where we are setting up strategies to drive customer acquisition and improve ROAS (return on ad spend) for our clients in a cookieless world.
Stay tuned for our next blog on alternative strategies to reach and convert audiences without the third-party cookie. Feel like you need professional help to handle all these changes and manage marketing for your organization? Twin Creek Media is happy to step in! Click here to contact us, and let’s chat!
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