As a business owner, you know that data is the new oil (or renewable energy in the very near future if we hope to keep living on this planet). Point is, that it’s the fuel that runs every successful business.
It fuels every plan, action, and reaction that your team and your business make, just like oil-fueled every machine, factory, and vehicle up until about a decade ago.
Over the last decade, cookies have collected highly valuable customer information for businesses all over the world.
Data from tracking cookies have fueled the engine of eCommerce growth and helped merchants understand how shoppers interact with their websites, what behavioral triggers motivate their purchases, and how to re-engage them with ads.
Just look at all of the eCommerce businesses that have been built exclusively using the $230 billion-plus spent on Facebook and Google Ads in 2020.
But all of that will end in 2023 when Google announces that it is getting rid of third-party cookies.
In a recent announcement, Google clarified that third-party cookies are going away, as the company is making moves to prioritize user privacy over growing concerns of online tracking.
This shift will have a huge impact on eCommerce businesses that rely on cookies to track user data.
It’s not just Google, other browsers are following suit. Apple’s Safari and Mozilla’s Firefox have already blocked third-party cookies and Microsoft Edge will do the same by default in its upcoming release.
What does this mean for the future of eCommerce?
The end of third-party cookies signals a big change in how businesses will need to collect and use data.
eCommerce businesses will need to find new ways to collect data on their customers and identify trends.
They’ll also need to be more careful about how they use that data, as customers become more aware of online tracking and privacy concerns.
How does a third-party cookie work?
Cookies can be helpful for online shoppers, but they also have a downside.
Most people are unaware that when they visit a website, cookies from third-party companies are automatically installed on their computer or device. These cookies collect data about the user’s activities on websites across the internet and allow third-party companies to serve targeted ads to them.
Many people believe that cookies are only used for advertising purposes, but they can also be used to track a user’s activity and movements online. This information is then sold to the highest bidder, without the user’s consent or knowledge.
As well as being a privacy concern, third-party cookies can also be a security risk. Because they are created and stored by companies other than the website you are visiting, they are not subject to the same strict security measures. This means that they are more vulnerable to being hacked and used to collect sensitive information.
What are the different types of cookies?
There are three types of cookies: first-party cookies, second-party cookies, and third-party cookies.
1. First-party cookies
For website owners, first-party cookies are a powerful way to track how shoppers are navigating your store, understand the different touchpoints, and where they face friction and drop off. This information can help you improve your website design and layout, as well as identify areas that need improvement. First-party cookies can also be used to track conversions and understand which marketing campaigns are driving sales.
2. Second-party cookies
Second-party cookies are less “automatic”, and is basically an agreement between two parties to share user data with each other.
For instance, Good Monster just helped one of our clients produce an experiential marketing campaign for the Mid-America Truck Show in Louisville, KY.
The show was collecting data on its attendees through various methods, which could then be purchased by other vendors after the show to follow up and target attendees for post-show engagement.
This type of “cookie” is less common and less worrisome for consumers because in most cases a person would have opted into giving their data to someone voluntarily. Then this data would be given to another related party.
3. Third-party cookies
Third-party cookies are the main culprit in privacy-related concerns. These are cookies that are set by a domain other than the one you are visiting. For example, if you visit www.example.com, a third-party cookie could be set by www.thirdpartysite.com. These cookies allow third-party sites to track your browsing activity even when you’re not on their site.
(i.e. when that pair of shoes you looked at for 5 seconds now follows you EVERYWHERE else across the internet.)
They are collected by third parties like advertisers and can identify a shopper’s location, and interests.
This data is used to show targeted ads, which is why Google is following Mozilla’s Firefox, Microsoft’s Edge, and Apple’s Safari, by getting rid of them.
However, in some companies’ minds, this could hurt the usability of the internet.
The end of third-party cookies means that sites will no longer be able to track your activity around the web. This could make it harder for advertisers to show you relevant ads, and may also break some features on sites that rely on third-party cookies (like social media buttons).
Chrome’s end of support for third-party cookies means that all sites will have to get your permission before setting any cookies, and most sites will likely stop using them altogether. This could make the internet less convenient to use, but it will be more privacy-friendly.
Win-Win? Win-lose? Lose-lose?
I guess it depends on who you are and how “convenient” getting things shoved down your throat on the internet makes your life. 🤷♂️
Why are 3rd party cookies going away?
As an online business, you need to be aware of the changes happening in the industry.
Google has announced that it will phase out support for third-party cookies. And there is a very good and important reason for this.
Third-party cookies have long been used to track people across the web. But they can also be used to invade people’s privacy.
Google wants to get rid of them because they want to make sure that people’s privacy is respected.
The end of third-party cookies will mean the end of Chrome cookies. This is because chrome cookies are based on third-party cookies.
So, if you want to continue using Chrome cookies, you need to find a way to do so without using third-party cookies.
There are a few ways that you can do this. One way is to use first-party cookies. First-party cookies are created by the website that you are visiting.
They can only be used by that website and they cannot be used to track you across the web.
With this change, businesses will lose access to user tracking and analytics data. But, you will still be able to use first-party cookies for things like login information and preferences.
Instead, it uses other information about your browser, such as your IP address, to track you.
So, if you want to continue using Chrome cookies, you need to find a new way to do so. But, you should also be aware of the privacy implications of doing so.
Google is making this change because they want to make sure that people’s privacy is respected.
How to prepare for the removal of third-party cookies
Here are three ways brands can still target ads effectively, even without third party cookies:
Collect your own first-party data by asking customers to sign up for your loyalty program, newsletter, or email list. This way, you can target them with ads based on their interests and past purchase history.
This is the best kind of data because it tells you more about consumers that already know you (warm leads, middle-to-bottom funnel) and it’s probably data that they gave to you voluntarily either through the checkout process or with opt-ins.
It maintains user privacy because it doesn’t collect sensitive or personal data, and instead focuses on data that improves user experience and convenience on your website, app, or platform.
The most significant impact that the loss of third-party cookies will have is the inability to monitor individual consumers and, as a result, customized advertising. You’ll be able to see what actions were taken, but you won’t be able to identify who took them. As a consequence, you can’t advertise based on individuals’ specific activities or tastes.
This will cause a shift to contextual targeting or ads based on the context of the website or app where they’re being displayed. For example, if you’re selling beachwear, your ad is more likely to be relevant and effective if it’s displayed on a website or app about travel or summertime.
In addition, advertising platforms like Google will start to use systems that target groups of people based on intra-platform actions like browser searches and clicks. Google’s system is called Federated Learning Cohorts (FLoC), part of what the company terms a “privacy sandbox.”
This will eliminate individual action-targeting based on data bought and sold from lots of other parties, and instead, use Google’s data to serve you ads based on which “cohort” or group of interests you have similar to other people.
Might seem the same as ad-targeting from the past two decades, but it means that Google is only tracking your interests and serving ads based on things you might like (as opposed to personal data like income, education, purchasing habits, etc).
Lookalike audiences use data from your existing customers to find new customers who are similar to them. You can do this on social media platforms like Facebook and Twitter, as well as with Google AdWords.
Even though third-party cookies are going away, lookalike audiences will still be valuable because platforms like Facebook and Google have other ways of gathering data about their users.
And these platforms are not selling this data to other advertisers. Instead, they are using contact info that you give them about your customers, using interest data that they have already collected on them, and using it to serve ads to other users with similar interests and actions that might find value from those ads.
So technically it’s a mix of first- and second-party data shared between you and the advertising platform.
Do we really need cookies anyways?
There are also other holistic ways that your brand can fight the removal of 3rd party cookies:
Focus on community management and audience engagement
By developing marketing plans to build a direct relationship with its customers, as well as a way to manage and nurture those relationships, companies can weather the loss of cookies.
Loyalty programs that focus on customer retention are one avenue through which this can be accomplished. Another is by focusing on first-party data and developing a strategy for how to best collect, utilize, and protect it.
Brands can utilize data collected from first-party cookies to hyper-personalize the user experience on your site. For example, if you’re a retailer, you can use first-party data to show users products they’re interested in, rather than a generic list of items.
First-party data can also be used for things like marketing segmentation and personalization, email marketing, and even developing targeted ads on social media platforms.
Leverage browser fingerprinting as an alternative to cookies
Additionally, there are other forms of tracking that do not rely on cookies and are less intrusive, such as browser fingerprinting. This technique creates a profile of the user’s device by looking at various browser characteristics, such as installed plugins, screen size and resolution, time zone, and more. This information can then be used to track the user across different sites.
Browser fingerprinting is a more sophisticated way to track users and has several advantages over cookies. Fingerprints can be used to track users even if they switch devices or browsers, yet it focuses on the user’s device and usage, instead of personal data.
This includes features like:
- The types of devices they use
- Their time zone
- Installed plugins and fonts
- Language settings
- Screen size and resolution
- Operating system
All these factors contribute to a user’s fingerprint which can be used to track them and is independent of cookie data.
Consent Management Platform
Brands can also develop a Consent Management Platform (CMP) to get explicit consent from users before collecting their data. This is in line with the new European GDPR regulation.
There are many CMPs available, but some of the most popular ones include Cookiebot, OneTrust, and TrustArc.
When it comes to cookies, Google is the new sheriff in town. As of 2022, the tech giant will no longer support third-party cookies in its Chrome browser. This move signals the death of the third-party cookie—and a potential shake-up in the digital advertising landscape.
And while the loss of third-party cookies may seem like a daunting task, it doesn’t have to be all doom and gloom. There are plenty of ways that brands can adapt and even thrive in a post-cookie world.
So, what are you waiting for? You’ve got 12 months to get ready for the end of the third-party cookie. Use this time wisely to develop a solid plan—one that will ensure your brand’s continued success long after the cookies crumble.