Cookie Free Fututre!

In 2020 Google announced it'll join Apple and Mozilla in phasing out third-party cookies in its browser by 2022. Between all of them , Google Chrome (64%), Apple Safari (19%), and Mozilla Firefox (4%) take up 87% of the worldwide browser market.

This means that third-party cookies – which have driven the web advertising economy for the past 20 years – will soon be consigned to internet history. Although it's still unclear what is going to follow in their tracks, we will make certain that the world’s biggest tech companies will invest heavily to secure a reliable alternative.

As of mid-March, Apple and Mozilla have already implemented their cookie clampdown, but Google has given itself until 2022 to form the gradual transition. Without any doubt, this may cause a radical overhaul of the web economy which will impact all marketers.

To discern just how seismic this shift are going to be , and what it'll leave in its aftermath, allow us to analyze:

• What are cookies anyway?

• What exactly goes to change?

• When will the updates take place?

• What happens next?

• How should marketers prepare?

What are Cookies Anyway?

Cookies help businesses perform a good sort of handy functions online. These small packets of knowledge were first utilized in the 1990s as how for sites to ‘remember’ which items a user had added to their cart. Soon, their use expanded to incorporate authentication of login status, tracking users across different websites, and storing a user’s browsing history.

In short, cookies are a reliable means of passing on information about the web behaviors of people . And somewhere along the way, the balance has tipped faraway from their reliability and towards the invasion of privacy that cookies can enable.

There are many distinct sorts of cookie. The most vital types are first-party and third-party cookies.

• First-party cookies are stored by websites. They allow these websites to recollect a user’s settings and that they can significantly improve the user experience. These cookies aren't targeted by the recent and upcoming changes.

• Third-party cookies are created and stored by external sites, and not by the location the user is visiting. They could track the user as they move across domains and retarget them with personalized messaging.

Facebook estimates that personalization creates 50% of its advertising revenues, and therefore the social network is obvious in its belief that the upcoming changes will limit its ability to personalize ads effectively. For all their privacy limitations, third-party cookies do deliver results.

What is Changing - and Why?

Lawmakers within the European Union and therefore the us have third-party tracking cookies firmly in their sights. This must be placed in its wider context, however. Online privacy may be a political issue and newer regulations like the EU GDPR have a way wider scope than simply cookie-based tracking.

Cookies are a symbol , not the disease itself. And while Facebook may tout the success of its personalized ads as proof that buyers want this type of advertising, there's evidence to the contrary too. eMarketer estimates that in 2021, 27% of internet users have a billboard blocker enabled on a minimum of one device. These ad blockers prevent a bit of JavaScript code running on the page, so cookies can't be created.

There is a broader shift towards greater transparency online today and third-party cookies often operate during a shadow economy. The difficulty with such an economy is that its participants are rarely conscious of its inner workings. For instance, many folks are tracked online without giving permission for adtech companies to collect and trade our data. We could go further still: many brands don't skills their adtech suppliers capture and process customer data.

Regulations like the EU GDPR have created more awareness of those challenges, with businesses now required to stay transparent data records. The EU GDPR is simply the start , however, and regulators worldwide are far more attentive on user privacy today. Third-party cookies are a simple target for regulators that don't have a stake in their continued use.

Against this backdrop, web browsers like Mozilla Firefox and Apple Safari have seized the initiative before they're forced to limit invasive tracking.

But why would Google, in announcing it'll end third-party cookies by 2022, pursue such a self-defeating venture? in any case , Google makes the lion’s share of its gargantuan advertising revenues from tools that use cookie-based tracking. Why is it not taking an equivalent stance as Facebook, which is resisting Apple’s iOS 14 update on the grounds that it'll restrict access to data from the Facebook pixel?

In short, Google is embracing an inevitable change, all the higher to shape what comes next. There's little point in resisting the shift faraway from third-party cookies, especially once they have such a lot to lose if a rival creates the new standard by which all other platforms must operate.

What Comes Next?

Apple’s CEO Tim Cook struck an optimistic tone at a 2019 conference: “Technology doesn't need vast troves of private data stitched together across dozens of internet sites and apps to succeed. Advertising existed and thrived for many years without it.”

Apple, of course, doesn't believe advertising revenues - and one can sense that they're enjoying their new role as privacy protectors.

Advertisers now know that private data fuels highly effective marketing campaigns. They're unlikely to travel back to the old methods if they need a choice within the matter.

Google’s loose deadline for third-party cookies in Chrome (“by 2022”) provides scope for experimentation. They'll not remove this type of tracking altogether until it are often replaced. The large question for Google, along side other adtech companies like Criteo, is: can they supply cookie-like tracking capabilities, while preserving the privacy of individual users?

This looks like an insoluble paradox. Especially since any short-term workarounds that don't preserve privacy will eventually be pack up by regulators. Google is functioning on this assumption and has made clear that its updates are about privacy, not just cookie-based tracking.

As a result, Google is taking a zero-tolerance approach to unethical techniques that might circumvent its new rules. From 2022, all “user-level IDs” are going to be restricted within Google Chrome. This includes the practice of “fingerprinting”, which uses a machine’s configuration to spot individual users.

Google’s major announcement was a ‘Privacy Sandbox’, which can use federated learning to aggregate and anonymize data from individual devices. The confidential data will remain on the device, but the algorithm will still be ready to learn from patterns across different cohorts.

Google is functioning on this assumption. Regulators have already said that they're monitoring other practices which will take the place of 3rd-party cookies. But I shall clarify here.

Under this proposal, advertisers wouldn't be ready to target individual users, as they will today through remarketing. Instead, they might target groups that exhibit behaviors that imply an interest in their product or service.

In early tests, Google reports that advertisers could expect to ascertain “at least 95% of the conversion per dollar spent in comparison to cookie-based advertising”. We must always note that Google tested this method against cookies only in reference to in-market and affinity audiences during this experiment. But as an initial step, this could be encouraging for advertisers.

Facebook, which retains an enviable trove of first-party user data, is additionally testing new ways to exchange its retargeting methodology. The early front-runner is made on “aggregated event measurement”, an identical principle to Google’s cohort-based federated learning. We must always also expect to ascertain retailers like Amazon and Walmart make gains, as they will build advertising products within their ‘walled gardens’ of first-party data. Significantly, this first-party data reveals what people buy, also as what they look for .

It is uncertain how exactly these proposals will play call at the finer detail, but the trend is obvious . The main platforms and adtech companies are all working to supply cookie-style performance without cookie-style tracking.

This could allow advertisers to seek out similar performance levels – if they're willing to adapt to the new reality. Nonetheless, advertisers cannot expect an equivalent level of transparency in their reporting, albeit the bottom-line performance looks similar. This has concerning implications for brands that already fear they're ceding an excessive amount of control to the platform giants. Both Google and Facebook are performing on proposals which will inevitably require brands to trust the veracity of their data, without seeing the granular detail.

That will have a consequence for digital marketing strategy and measurement.

How can Marketers Prepare?

The most obvious strategic shift may be a move faraway from individual user tracking and towards more contextual advertising. This suggests getting on the brink of the patterns of the customer journey, instead of following each customer’s journey.

For example, within the automotive sector brands would target the behaviors that customers exhibit on their path to get and make sequential content to match that journey. That would mean placing ads alongside articles that review certain models of car, or YouTube videos of a modern TV advertising campaign .

Advertisers will got to layer greater understanding of their customers on top of this approach. This could are available the shape of first-party data, which companies can gather by getting closer to their customers. It's essential to demonstrate that data are going to be handled responsibly, but also that customers can expect a far better service reciprocally for sharing their sensitive information. To assist with this, marketers should aim for ‘data privacy by design’ on their websites and apps as standard.

There is no need for marketers to panic about these ongoing changes. All the above stems from a customer-centric view of how the web world should operate. If marketers keep this in mind and specialise in maintaining customer privacy, future regulations will offer little concern. That shift in emphasis won't remove the pressure to deliver results, of course. But as an industry, we all got to advance from an economic model that needs invasive tracking to deliver those results.

With the collective might of Google, Facebook, and a sizeable adtech industry performing on new alternatives, there's cause for optimism among marketers that they're going to still achieve results. Regardless of where their experimental new methods lead, it's abundantly clear that brands will got to think differently about their data to require advantage. That job starts today, by building closer relationships with customers.

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