What the death of third-party cookies means for your digital advertising strategy

As data privacy concerns rise, third-party cookies will soon be a thing of the past. The crumbling of third-party cookies will require agility and patience from marketers as platforms and publishers adjust to new targeting methods. And while there’s a sense of urgency to address the shift away from cookies, there’s no need to panic.

We consider the change an impetus for innovation that will employ an increased level of responsiveness. Over time, we will continue to uncover and share best practices for the cookie-less world we are entering.

The current state of third-party cookies

Third-party cookies are more invasive than other marketing mechanisms because they track users across multiple websites, gathering long-term browsing history. The data collected from third-party cookies is often stored on servers that are vulnerable to hackers. That means users are at risk for having their personally identifiable information (PII) spread across the internet—exposing them to identity theft, fraud, and other harmful and costly impacts. Aside from potentially having information exposed, many people simply don’t want their online activity collected and stored.

Browsers like Firefox and Safari have stopped collecting third-party cookies—with Google Chrome soon to follow. That is, in part, a way to address the privacy concerns a vast majority of consumers have around the storage and use of their data. Additionally, regulations such as the General Data Protection Regulation (GDPR) in the EU, and the California Consumer Privacy Act (CCPA), aim to empower users to take control of their data.

How the downfall of cookies will affect advertisers

A cookie-less world will make it more difficult for marketers and advertisers to rely on third-party data for granular targeting—including retargeting and performance measurement.  However, first- and second-party data will remain largely unaffected. Additionally, “walled-garden” platforms like Google and Facebook that collect their own consumer data will see minimal impact.

In the short term, the loss of cookies may make it difficult to acquire new customers as efficiently as before. Long-term, as systems and processes evolve to better leverage first- and second-party data, marketers will have the opportunity to create stronger connections with customers. Those connections, in turn, will provide better customer experiences and increase trust. Marketers will gain the advantage of creating a value exchange that will lead to increased brand loyalty and affinity.

Where marketers can turn in the absence of third-party cookies

Look to first-party data. Your best target audience is your current customers and leads—the people who have directly expressed interest in your brand and products. Organize and optimize CRM data as a foundational step and leverage loyalty and reward programs to develop deeper-level engagement with existing customers.

Take an in-depth look at your data—including average transaction size, customer lifetime value, purchasing patterns, and cross-product purchase and interest to determine who to engage and how to engage them. Maximize data performance by segmenting based on what you already know about your customers through their interactions with your brand. Engage customer segments in a way that is personalized and contextualized. Lean into a relationship-based approach with higher-value consumers and leads.

Of course, with first-party data, market giants like Amazon, Facebook, and Google have a significant advantage, but often brands have more valuable customer data than they realize. First-party data can include customer name, email address, demographic, and psychographic or behavioral information. Depending on the size and scope of your CRM data, using MarTech tools to directly engage with customers or leads can be an effective approach.

Additionally, try advertising techniques that are not reliant on cookies, including contextual and content advertising or people-based targeting. With contextual and content advertising, instead of tracking a profile, you target your audience based on who is engaging with a specified type of content. This deepens relevancy for the consumer, without overstepping privacy boundaries. People-based targeting allows brands and consumers to meet in a mutually agreed upon space, such as a ‘logged in’ experience—Facebook, Amazon, Twitter, etc. Finding the balance between targeted, purposeful campaigns and clear privacy boundaries will only work to strengthen the bond between brand and consumer.

Targeting trends and a resurgence of innovation

The phasing out of third-party cookies will significantly limit the ability to programmatically retarget users, but it seems to also be ushering in a resurgence of innovation. Only time will tell which ideas will reign supreme, but as we look to the cookie-less future, our experts see three key trends emerging:

• Cohorts and context: A cohort is a group of individuals who share common browsing behaviors and interests. Context, which is being built out by several ad tech companies, relies on AI reading information about the page’s sentiment and gathering context from it. Although these seem promising, there are concerns surrounding efficacy and reporting.

• Gatekeepers: Gatekeepers refer to an independent third-party that would execute real-time bids in place of the browser. This benefits both the individual, with almost no user data collected and the brand by collecting transparent reporting on ad performance metrics. However, this technology is still mostly theoretical.

• Unified ID: The third trend, Unified ID, utilizes user volunteered identifiers, such as email, with a clear consent message which allows users to opt into advertising and access content for free. This could be done by using a single sign-on across the open web—essentially replacing cookies. However, there are still concerns regarding privacy and consent for the user.

Choosing the right partner for future marketing endeavors

Marketing agencies will be on the front lines of this new world and will bear the brunt of the responsibility of finding successful solutions for clients. Seek out an integrated agency that has a proven track record of guiding clients through the complexities of advanced segmentation. Be sure the agency has experience harnessing the power of brand data to provide personalized messaging and interactions throughout the entire customer journey—across all touchpoints. The right agency should have a deep and integrated team of specialists across paid media, analytics, one-to-one communications, and digital marketing that collaborate closely on data management, audience activation, and performance measurement.

Work closely with account teams and clients to leverage first-party data, partner with second-party providers, and employ methods such as contextual targeting to identify viable alternatives to cookies—such as the solutions created by Google and The Trade Desk. Ultimately, understanding the data boundaries consumers are erecting, respecting them, and creating innovative solutions will separate cutting-edge agencies from those stuck in the past. That approach will propel your brand to build deeper customer relationships that will truly drive measurable business outcomes.