C is for Cookies: Google Cancels Phase Out Of Third Party Cookies
C is for cookie, that's good enough for me.
Over the last 4 years, all I’ve heard about is the deprecation of third party cookies.
And suddenly… Is this a hallucination? Third party cookies are not leaving after all?
According to TechCrunch and a release from the Privacy Sandbox, Google Chrome is no longer deprecating third-party tracking cookies in its Chrome browser. Instead, it will offer users a choice to accept or deny tracking at the browser level. This appears to be due to disapproval from regulators and other stakeholders over The Privacy Sandbox that has been building over the past few months.
The release from the Privacy Sandbox states:
We are proposing an updated approach that elevates user choice. Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We're discussing this new path with regulators, and will engage with the industry as we roll this out.
This new change is reminiscent of the many companies that have opted for this type of opt-in due to other recent privacy changes over the last several years by big tech companies and other internet browsers, like Mozilla Firefox and Apple Safari.
While it sounds like Google will be working towards getting the Privacy Sandbox in better shape for regulators, this change in direction still brought up some questions: Will advertising platforms like Facebook and Google revert back to older ways of advertising that included targeting with information obtained from 3rd party cookies? How will this impact advertising at large?
I decided to do some digging to figure out how reversal will impact the marketing and advertising industry, including chatting with some marketing professionals experienced in targeting and analytics to get an idea of where the industry is headed.
Before we dive into market predictions for the state of advertising and targeting, let’s go over some terminology:
Cookies are small text files that store data about a user’s behavior. Cookies are important for the functioning of the internet. For example, your login information would be stored in a cookie if you request that a browser remember your login credentials. Cookies also enable users to browse a website with items in their cart without the website forgetting what those in-cart items are. These are examples of how first-party cookies function. The other type of cookie is a third-party cookie.
Third-party cookies are set by a website other than the one you are on. They are created when a user visits a website with elements from other sites, such as third-party images or ads. Examples of how third-party cookies are generated are through display ads or a video embed. If you see or engage with an ad from a third party, that third party might be collecting third-party cookies for a different website than the one you are on.
How do advertisers obtain information from cookies?
Tags and pixels are bits of javascript code that automatically fire up when a user logs onto a website. These tags and pixels place cookies in a user’s browser, read the data in the cookie, and send the cookies to a third party analytics system.
Cookies don’t follow users across different browsers. Advertisers and companies obtain user information through fingerprinting — using a personal identifier like an email address or IP address to connect different pieces of data from cookies.
Remember 1st And 3rd Party Cookies Are Different From 1st And 3rd Party Data
Cookies store data, however, when referring to 1st and 3rd party cookies— this means something different than when referring to 1st and 3rd party data. When we are speaking about first- and third-party data, the prefixes first-, second-, and third-party refers to how the data was collected by a company.
First party data is data that a company collects on its customers. Second-party data is data collected by an entity other than the company itself. Third-party data is data that is purchased, aggregated, and resold by data brokers.
No matter what the state of cookies are, 1st party data will always be the most important and most valuable source of data for any company — because that is the information provided to your company, by your customers, with their consent.
User Behavior
When it comes to user behavior, this is where cookies are helpful for advertisers, in tracking specific behaviors and interests across the internet.
Server-side vs Client-side Tracking
The phase out of third-party cookies encourages a server-side tracking model and discourages the client-side tracking model. In the client-side tracking model, cookies are tracked and stored on a user’s browser. With a server-side tracking model, the tracking and storage of cookies happen on a server instead of on a browser. The server-side tracking model is considered cookieless, however, server-side tagging and tracking still uses cookies, just in a different way compared to client-side tracking.
The old way, the new way, and AI
The main things that have changed over the last several years is the shift from client-side tracking to server side tracking. Josh Silverbauer, the Head of Analytics & CRO at From The Future states that most everything that advertisers were able to do with third-party cookies, they can do with first-party cookies. These actions just happen on a server instead of a browser. “You don't need third-party cookies to be super shady with data. Some would argue that third-party cookies are just as good for privacy as not having third-party cookies. The key is consent. You can do that through server-side information exchange. At least, for users, 3P cookies are visible. The important thing is companies respecting what users want and what they don't want, and through the third-party cookie saga, that became more standardized.”
Furthermore, Silverbauer stated that he believes that AI will have a bigger impact on marketers and advertisers than these changes with how cookies are handled. “I think it will inevitably be more and more complicated to hyper-target without AI. Additional privacy laws will roll out, and it will get more complex. AI will allow for hyper-personalization without the need to store and preserve the data.”
Privacy Laws & Big Tech
Presently, there are a lot of privacy laws in place by the GDPR, CCPA, and FCC. Prior to the pandemic, Apple Safari and Mozilla Firefox had already created more privacy options for users related to third-party cookies, as well as iOS in 2021.
Advertisers are likely not to change strategies from the new “cookieless” methods established in recent years due to these changes.
Dan Vogel, Founder and President of DBV Marketing, stated that although advertising channels, mediums, and strategies should not change related to the reversal of third-party cookie deprecation by Google, operational set up should change. “Consumers will continue to have the freedom to opt out of cookie tracking. Even though Google Chrome reversed course, other companies, like Apple have not. With iOS 14.5 and newer versions of iOS, Apple has made it easier for consumers to opt out of tracking. This is why advertisers should focus on setting up tracking and events through server-side events,” said Vogel.
“Cookieless data (capturing and sharing events from a backend system) and 1st party data (relying less on ad platforms and more on owned data) are still important for proper tracking and monetization. Having a tech or analytics specialist to set up non-cookie tracking (server-side tracking) is the best practice at this time.”
Vogel and Silverbaur both implied that the reversal of 3P cookie plans won’t make big waves since many web browsers and big tech companies have already increased consumer choice related to third-party cookies. Moreover, big tech companies, like Meta, continue to be under scrutiny around consumer privacy concerns.
Silverbaur added that 3P cookies are essential to Google’s Ad platform, however, until the Privacy Sandbox is ready to roll out, it seems that Google Chrome is simply adding features for users to have the option for more privacy and less tracking.
Same with protecting consumer rights and privacy. Companies have adapted their strategies and tactics already and the state of marketing and advertising is likely not to move backward. Likewise, many forms of targeted advertising can still be achieved without 3P cookies.
Advertising and marketing over the new millennium has been rapidly changing. There are new laws and algorithm updates on an almost daily basis. This is now the state of marketing and the rate of change is not likely to slow down because of advances in AI. We are likely to see more changes across all platforms and technologies over the next several years. We can all speculate, but staying abreast of new information as it arises is the best way to ensure that your brand is taken care of and operating with best practices in mind.
About The Featured Marketing Experts:
Dan Vogel of DBV Marketing specializes in performance growth with DTC e-commerce and lead generation companies over $5M per year. Specifically, helping with top-of-funnel email growth, middle-of-funnel nurturing, and bottom-of-funnel website conversions (all with a highly positive ROI).
Josh Silverbauer is a technical architect, strategist, and creator with over a decade of expertise in marketing analytics and Conversion Rate Optimization (CRO). As the Head of Analytics at From The Future, Josh has transformed countless businesses with his innovative approach to data configuration and customer experience optimization. What sets Josh apart is his ability to make complex data concepts both accessible and entertaining. Known as the "singing, dancing analytics guy," Josh integrates comedy, creativity, and music into his work, culminating in the creation of a rock opera about the analytics industry's evolution. Whether he's architecting complex data solutions or performing his analytics-themed music, Josh brings energy, expertise, and a fresh perspective to every engagement, inspiring audiences to see the creative potential in their own data (and lives).