Google will ban third-party cookies on Chrome by the end of 2022. While at first glance this might seem like bad news for digital advertising, it also presents opportunities to tighten up existing digital marketing strategies and leverage other forms of digital reach. Read on to find out how. But first, what exactly are third–party cookies and how are they being used right now?
What are Third-Party Cookies?
There are basically two types of cookies — first and third-party cookies. Both are the same type of file and both collect and store information about a user’s behaviour, but the purpose of each is very different.
First-party cookies are created by and stored solely on the website you are visiting and are meant to improve your experience while using that website. These cookies will store information such as settings and preferences, your preferred language, or information to enable shopping. First-party cookies allow the browser to remember key information such as the products you’ve added to your cart, to facilitate a smooth and productive user experience (UX).
Third-party cookies, on the other hand, are set by some other domain such as an adserver via some code on the website you are visiting, usually a tracking pixel. The same bit of code can be installed on multiple websites and is used for tracking behaviour across a number of different websites. Using the information that is collected, the adserver can create unique user profiles that advertisers use for precise targeting and remarketing, for example.
The type of information that is gathered includes personal information such as:
- Websites visited
- Pages visited on each website
- Time spent on each page
- And more
Third-party cookies are why you might see ads for hotels in Waikiki popping up in your Gmail after you were browsing the web to learn about tourist attractions in Hawaii.
Why is Google Banning Third-Party Cookies?
There has been growing public awareness and backlash over the lack of online privacy and big Tech’s use of our personal data, spurred on by events such as multiple controversial elections around the world and the Facebook-Cambridge Analytica scandal. Individuals have taken action by disabling cookies, by using ad-blocking software, and being vocal in their complaints. Some governments have been introducing legislation to protect privacy. For example, Europe introduced the General Data Protection Regulation (GDPR) designed to give individuals control over their personal data collected online.
Google isn’t the first to ban third-party cookies, but because of the size of Google, its ban will have a noticeable impact. Google’s Chrome is the most used browser, accounting for over half of all traffic. Apple’s Safari and Mozzilla’s Firefox already block third-party cookies by default.
Google declares it will balance user privacy and still cater to advertising needs with a new model for collecting information on browsing patterns —one they say will not infringe on individual rights. This new model, called, Federated Learning of Cohorts (FLoC), uses artificial intelligence to place the individual’s browsing patterns into cohorts from which the individual’s data cannot be easily isolated. The FLoC may bring about other concerns that arise when people are lumped into broad categories, but it is likely to be more efficient and secure than third-party cookies.
The take-away is that third–party data will continue in some form. It won’t allow for extreme precision targeting at the individual level that we’ve been used to, but rather at the aggregate group level and based on assumptions about the individual. Also remember there is already a mountain of information on individuals in the hands of big Tech. There is the possibility they will package this in some way for marketers to use or buy into. New tools will develop to replace the third-party cookies.
In the meantime, going back to basics, and really listening to customers might be the best strategy, and even more productive than relying on third-party data.
Opportunities for Marketers
In digital marketing, we’ve come to rely on third-party data, sometimes to the detriment of valuing first-party data. First-party data is the information a business collects directly from their customers. The business owns this data, it does not belong to any big Tech company like Google. First-party data, also called 1P data, includes information such as website and newsletter stats, purchasing history, call-in, chat or in-store interactions, for example.
First-party data can also be shared with trusted partners, in which case it becomes second- party data. The advantage is a wider scope and some context to your first-party business data. An example of second-party data is when a business shares their first-party data with an advertiser to run ads on their platform.
First-party data delivers the highest returns. It provides highly accurate information about how your real-life customers are actually interacting with your brand. It provides the information you need to take care of your current customers and attend to their needs and wants. Repeat customers are pure gold: they spend more when they buy, they buy more frequently, and to top it off, they often act as brand ambassadors, increasing your customer base in the best possible way.
But it takes some time and effort to build and maintain the trust and loyalty of these types of customers. Using first-party data to trace the customer’s purchasing journey across multiple platforms and using that to accurately target customers will heighten your advertising relevancy, thereby reducing wasteful efforts and will build that type of loyalty you want as a business.
Content and content marketing is likely to become even more important. Newsletters, articles, and videos are all likely to become key methods of reaching consumers. Content that is relevant, interesting, useful, and optimized to rank well for organic search results will allow brands to gain visibility, trust, traffic, and customers. Maintenance of website content, such as updating old blog posts, will provide more signals of quality and relevance. Anything that increases user experience to build quality audiences can be leveraged to increase revenue through direct marketing.
Rest assured, Google’s ban on third-party cookies is not the end of digital marketing. But it is a bit of a wake-up call, bringing our attention to what really matters, which is, of course, our customers. What this shift requires is a prioritization of our customers’ needs as well as a new way of looking at and leveraging old methods to reach them.
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