What Does No Cookie Mean for Marketers?

October 27, 2021

Since the mid-nineties, third-party cookies have fueled the expansion of digital advertising, offering marketers the unique ability to follow individuals around the web and create sophisticated user profiles based on their browsing habits.

When someone visits a website, these little bits of code are essentially short text files with an ID tag. They are then saved on the user's browser and used to remember the user's choices, such as login name, themes, and other customisations, when the user returns to the same page.

They also enable websites to remember details like as the pages a user saw on a certain site. Advertisers benefit greatly from this information since it allows them to know which websites individuals visit and how frequently they visit them, as well as their interests and where they make purchases.

Based on such behaviors, they may then personalize, deliver, and retarget adverts.

When Lou Montulli, a 23-year-old engineer, developed the cookie in 1994, he had no intention of doing so. While Montulli intended for them to be used for cross-site tracking, he set out to build a tool that would assist websites remember consumers and enhance the e-commerce experience.

DoubleClick, an early adtech company that was eventually acquired by Google in 2008, saw a potential to employ cookies to fulfill advertising interests in 1995.

In response to rising worries about data privacy in the post-GDPR era, Google has announced that third-party cookies would be phased out of Chrome by the end of 2023. While Chrome is not the first browser to remove third-party cookies — Mozilla Firefox did it in 2019 and Apple's Safari did so in 2020 – it is the most recent.

Google controls roughly 65 percent of the worldwide browser market (although this number is closer to 80 percent in Europe and the United States, as well as other industrialized nations), therefore this is one of the most significant transformations in the history of digital advertising.

Many uncertainties remain about what a world without cookies will entail. We'll look at how a cookieless future will affect Google Ads and remarketing, as well as how your digital marketing can function without third-party cookies.

What's different now, and how will it affect your strategy?

With the elimination of third-party cookies from Chrome, Google will no longer be able to sell advertising based on people's particular browsing habits, and Chrome will no longer enable data-collecting cookies.

This will have the most effect on Google's ad products requiring retargeting, marketing to a particular audience (notably YouTube and Display), and assessing the performance of campaigns, since it depends on a combination of first- and third-party cookies.

Businesses may use Google's remarketing functionality to personalize display ad campaigns for individuals who have already visited their site, and then customize the advertising to these visitors as they browse the web and use applications. This has shown to be a highly successful approach to get someone to return to your site and complete the purchase or inquiry they were considering.

Without third-party cookies, marketers will have to find new ways to attribute conversions, frequency cap ad placements, and retarget site visitors outside of the Google ecosystem, and marketers will have to find new ways to attribute conversions, frequency cap ad placements, and retarget site visitors outside of the Google ecosystem.

However, although retargeting will become more difficult, this does not mean that remarketing is dead. You'll still be able to remarket to consumers using Google's first-party data inside its own tools since Google isn't altering its regulations regarding how companies obtain or utilize data collected directly from Google-owned products like Ads and Analytics.

What exactly is FLoC?

Google has said unequivocally that it would not develop or utilize substitute identifiers to follow users across the web after third-party cookies are phased out. Instead, it proposes 'Federated Learning of Cohorts' (FLoC), a sort of online monitoring that uses 'federated learning' (aka algorithms) to put users into "cohorts" based on their browsing history.

When compared to cookie-based advertising, Google states that FLoC may give an "effective replacement signal" for third-party cookies and that marketers should expect to see at least 95 percent of conversions per dollar invested.

When advertisers wish to contact previous visitors to their website through remarketing, Privacy Sandbox offers a proposition (called Fledge). This is being examined for a "trusted server" architecture that would "specifically store information about a campaign's bids and budgets."

Google is also proposing solutions that would enable advertisers to track campaign results without relying on third-party cookies. These recommendations, according to Google, would preserve user privacy while also fulfilling essential advertiser needs including event-level reporting, which allows bidding algorithms to recognize trends in data, and aggregate-level reporting, which provides precise measurement across groups of users.

However, many of these solutions are still in the testing stage, and it is unclear if they will fulfill privacy rules' criteria. We also have concerns about the efficacy of audience expansion advertising, which costs customers more but delivers less.

What other options do you have?

There will undoubtedly be a movement toward the creation of first-party data sets, and we will assist our customers in integrating this into their digital marketing plans.

Having data about your consumers may help you enhance performance and ROI, as well as increase accuracy and data quality, measurement, and attribution. Email subscriptions, social networking, website landing pages, and point-of-purchase are just a few of the effective and agreeable methods to acquire first-party data.

Contextual targeting, a kind of targeted advertising that enables you to position ads on a website based on the page's content and keywords, may also look intriguing. This may be done by working with other platforms and publications, or by using Google's Display network, which shows advertisements that are relevant to your users automatically.

In the absence of third-party cookies, some organizations may perceive an opportunity to improve their content strategy. Quality content helps organizations break through the clutter and improve organic search results. This is a tried-and-true method of organically attracting folks to your products/offering.

So, what's next?

Regardless of what Google claims, it's hard to tell how successful remarketing will be on a cookie-free internet until the transition is well started — whenever that may be, given Google's insistence on delaying the transition.

What we do know is that companies of all sizes, particularly those that depend heavily on third-party cookies, will have to relearn years of remarketing practices and change their strategies to target customers in a manner that is compatible with a privacy-first internet.

Thanks to Paul Morris at Business 2 Community whose reporting provided the original basis for this story.

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