By now, there’s a good chance you’ve heard of the impending deprecation of the third-party browser cookie (also called 3P cookie). For the past two decades, many digital media players have survived and thrived off the data this technology provides. An entire digital martech ecosystem was born out of capturing, aggregating, selling, buying, and using the data cookies are capable of recording. As digital experiences, consumer behavior, and government regulations evolve, so does the technology enabling them. This blog will take a quick look at the history of digital cookies, the evolution of adtech relying them, and the impact on digital advertising.
Digital Cookie Timeline
Introduction of Browser Cookies
- 1994: Idea of using them in web communications introduced by a Netscape programmer
Ad Blockers First Appear
- 1996: PrivNet releases the first plugin for Netscape Navigator
3P Cookie Regulation Begins
- 2000: Lawmakers in the U.S. and the European Union began taking action to protect consumer privacy
Consumer Push Towards Privacy
Browsers Begin Blocking 3P Cookies
- 2019: Firefox leads the way by blocking 3P cookies by default, Apple follows the following year
- 2020: Google begins allow brands to communicate cookie tracking or app identifier consent status to Google.
Apple's IOS App Tracking Transparency
- 2021: Apple begins prompting iOS 14.5 users to allow or deny an app’s ability to track the user across apps
Google Chrome's 3P Cookie Deprecation
What Is The Difference Between First-Party and Third-Party Cookies? And What Are Zero-Party and Second-Party Cookies?
First-party cookies are created and stored only by the website you are visiting. They are capable of capturing information about the user and their session, which can help improve the user experience. The most common use cases for 1P cookies is to remember usernames and passwords, content consumed on the site (including items in your shopping cart), as well as site settings and preferences.
Third-party cookies can be used by many other companies without a user’s knowledge or understanding of the information that is being captured, stored, and shared. A 3P cookie can track your actions across multiple websites as well as be used to deliver targeted ads based on your behavior and what the companies supplying the data believe they know about you or your household.
Second-party data is gaining in popularity with the introduction of “clean rooms”. A clean room lets brands combine their own first-party data with that of a publisher or another party and share it in a privacy-safe way with advertisers. This has become especially popular with retail media networks, which have become one of the larger providers of second-party data via clean rooms.
Zero-party data refers to information that a consumer intentionally shares with a brand. Much of the 1P data collected is without the user’s direct consent. Where 0P data is collected with the user’s acknowledgement. This can include preference center data, purchase intentions, and how the individual wants the brand to recognize them. Brand are also seizing the opportunity to collect more customer data by simply asking them for it, often in return for additional content, functionality, or experience, and explaining to the user how they will use it.
Third-Party Cookies Are Going Away
As a result of numerous high-profile data breaches, increased government regulation, greater transparency and controls for consumers (Apple’s App Tracking Transparency, for example), and greater consumer scrutiny over the vast amounts of data being collected on them and used to advertise to them, there is a push from many sides to move away from third-party cookie technology as a source of intel for digital marketing.
Consumers may rejoice this move. However, what is means for them is potentially less personalized advertising experiences. While some may like the idea of advertisers knowing less about them, the shift away from using 3P cookies to inform ad targeting choices will likely lead us all to being exposed to less relevant advertisements, at least initially. Fewer ads will be served based on what advertisers deterministically know about those they advertise to – digital behaviors, detailed demographics, psychographics, and more.
Google’s Chrome is one of the last major holdouts to support third party cookies – no surprise given how much of their adtech business relies on the technology; Apple’s Safari and Mozilla’s Firefox have been blocking 3P cookies for years. Since first announcing they would follow suit and suppress these cookies, they have delayed the move twice so far, now slated for end of 2024.
Next Steps for Advertisers
The current landscape creates an interesting conundrum for brands and all those in the adtech industry that support digital advertising efforts – how to meet both consumer expectations for personalized experiences as well as their privacy needs. And let’s not forget navigating the evolving regulatory landscape (GDPR, CCPA, CPRA, and beyond).
While the adtech ecosystem is not short on creative new solutions to the data dilemma, the industry has yet to rally around a single replacement for the third-party cookie. There are a number of things advertisers can do now to get ahead of the inevitable death of 3P cookies.
Prioritize First-Party & Zero-Party Data
Ask your customers to store, use, and maybe share their data. Explain why and how you plan to do so and what’s in it for them. There may come a time in the near future where the laws of the land (the whole U.S., not just individual states) will require brands to obtain consumer consent to capture any data on them. Marketers would be smart to establish a data strategy and plan for the potential impact to their consumer user experiences as well as their marketing and advertising capabilities.
Investigate Identity Resolution Solutions
Another alternative is to eliminate your reliance on cookies entirely. So called cookieless solutions typically don’t use PII (personal identifiable information) and instead rely on machine learning to model data. It is assumed this approach reduces the accuracy of data available although also increases the amount of data available giving visibility into all users, not just those who previously permitted data collection via browser cookies. As the models gather more data, over time they will likely become more intelligent leading to greater accuracy and completeness of the data available, all while doing so in a privacy-compliant way.
Embrace Contextual and Interest-Based Targeting
Over the last two decades, we’ve worked so hard trying to create such complete profiles of what our users look like (demographics, psychographics, personas, etc.) and target them based on the many ways we can slice and dice the data collected. Let’s not forget we still have the ability to reach those who may have an interest or contextual relevancy to your offering without having to collect any data on the user.
Improve the User Experience With Ads
Regardless of the future of third-party cookies, big data, and adtech, advertisers still can focus on, and some may argue should focus on even more now, elements of the advertising experience we can control – visuals, messaging, offer, and other components of the digital experience. One of the reasons ad blockers came to such prominence is because of the subpar experience with advertisements. Let this evolution of our industry be a wake-up call that leads to fewer annoying ads, boring banners, and slow loading landing pages that don’t give consumers what they need. Maybe then, we’ll see greater consent to use consumer data and fewer ad blockers.