The Death of Third-Party Cookies—the New Y2K

Way back when, before the 2020 pandemic and hoarding toilet paper was a thing, there was Y2K. We saw a run on ATMs, because everyone was sure all systems would fail at the stroke of midnight. There’s a digital advertising industry correlation to this, now. In 2022, Google plans on phasing out third-party cookies, and advertisers are nervous about how this will impact the way they will run online campaigns.

The Power of Cookies and the Info They Provide Advertisers

At its heart, a cookie is a “crumb” that assigns a tracking code to the user. For advertisers, cookies leverage information gathered from your device to display advertising based on topics that interest you. This information is used to build user profiles from visitors to the website, to gather stats on the performance of an ad, and to influence which ads are served.

Cookies can also be used to track you. When you visit a site, you may get a cookie from the server for that particular site, but you may also get a tracking cookie from the advertisers on that site—that’s called a third-party cookie. Third-party cookies follow you as you move from site to site. And this tracking is what concerns privacy advocates, and has led to regulations and actions taken to remove cookies from platforms.

Why Are Platforms Taking Action to Block Third-Party Cookies?

In 2020, Google announced its intent to phase out third-party cookies on the Chrome web browser by 2022. This is a move to cut off third-party cookies, so companies other than the specific publishers cannot collect and sell the information captured by the cookie.

Google’s announcement is the latest in the series of moves taken by other platforms. Social media platform Facebook, plus internet browsers like Safari (with their Intelligent Tracking Prevention, ITP, feature) and Google Chrome (limiting the use of cookies altogether) are taking steps to protect user privacy, now giving visitors the mandatory option to opt-in or out.

Why is the cookie crumbling? Recent audience & news trends reveal the reasons:

Cookies reside on a single device or browser, yet users jump around from device to device each day and often use more than one browser.

Third-party cookies don’t work in mobile apps, but the average person spends 2 hours and 57 minutes per day in apps, according to eMarketer.

Privacy regulations that address cookie use have emerged. This includes the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

In October 2019, the EU ruled that users must actively consent to all cookies when logging on to a website. This is known as the GDPR Ruling (General Data Protection Regulation) and essentially protects the privacy of individual citizens by prohibiting websites from capturing any of the user’s cookie data without consent.

While advertisers may now be worried about how to track their targeted advertising campaigns without cookies, a cookie-less industry could turn out for the better.

Innovations and Opportunities for Advertisers in a Cookie-less Industry

No doubt default cookie blocking on browsers will pose a huge challenge to advertisers in personalizing content and ads for users, but it also cracks the door open for innovation. The challenge now, if you will, is to find an alternative recipe to gathering insights on users.

One thing the innovative marketer will want to look at is how they leverage and use data. If your advertising strategy relies heavily—or exclusively—on third-party data, start considering alternatives quickly, because you’ll need time to examine results to learn what works (and doesn’t work) for your brand and objectives. One option is tapping into Google’s Privacy Sandbox, which could serve as a valuable alternative for ad targeting. You may also want to consider embracing strategies and software that can help you leverage first-party data.

The following solutions are available for advertisers who are looking to pivot and dive into cookie-less advertising strategies:

  1. Not all data sources currently use cookies. Consider tapping into Linear TV Data, Location Data, Offline Purchase Data and Social Listening Data.
  2. Other media formats haven’t relied on cookies, and advertisers are still able to reach audiences effectively. Other forms of targeting include MAID (Mobile App ID) Targeting, IP Targeting, and DSP ID Segments.
  3. The Power of First Party-Data. Collecting first-party data gives you a chance not only to store data, but also look deeply into your users’ profiles to deliver personalized experiences and send targeted advertising messages that enhance the CRM experience.
  4. Deterministic Targeting. Data entered into the websites or social platforms such as Name, Address, Birthday, Location, Interests, etc. can be leveraged for advertising.

Consider creating your own proprietary database with these solutions. And, if this isn’t enough, think about marrying your data with programmatic exchanges utilizing MNI’s proprietary DataMatch™, which leverages online and offline data insights to formulate a user profile.

Brooke Willcox is Director of Digital Business Development at MNI Targeted Media and its two business units, MNI and Harpoon Digital. With more than ten years’ experience in the digital media industry, Brooke excels at evaluating the digital landscape and emerging trends, to identify prospective partners across media solutions, data partners, technology platforms, pricing models, custom campaign tracking and analytics, audience insights, verification tools, creative, and programmatic platforms.

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