Updated: Apr 5, 2022
We’ve all experienced it.
You’re checking out a product on the internet and later–almost magically!--that product reappears as an ad on another site. How strange!
This is the result of a third-party cookie, and it has certainly left its mark on digital advertising due to its ability to personalize advertisements for the individual user.
But this experience is on its way out. For all its ease and potential rewards, there are some drawbacks leading to it being phased out.
Here’s a quick recap on the cookie’s impact on advertising both in the past and moving forward, and the effect this can have on your digital market campaigns.
There are multiple versions of cookies, which have been around since 1994.
A first-party cookie is used by a website to remember certain important information, including your password or your shopping cart. Let’s be honest: The shopping cart is a helpful feature! There is more of a sense of welcomed intrusion here since this data can be helpful.
Third-party cookies aren’t as welcoming since they are not welcoming. They are owned by a different entity–i.e not the site you’re visiting–and that ad can then follow you. A third-party cookie allows for outsiders to identify potential customers and target them with advertisements. It goes beyond just a group of users and instead is targeting that specific individual.
There is a second-party cookie, though it’s not as well-known. These are transferred from company to company to help each other, such as companies that share similar clients.
The third-party cookie allows for very individualized advertising since it already knows what you are searching for or in the market for. They know who the clients are, removing the guessing. You don’t have to worry that these individuals are not interested in your product.
This, obviously, has made it a quite useful tool for marketers. There’s no need to use methods that may involve guessing when the third-party cookie makes it simpler to target interested customers. Smaller companies with less financial resources particularly could use these cookies for greater success since it could help keep costs down while still targeting a vast audience.
For all the positives, there are still major downsides.
Let’s start with a top concern: Privacy.
In this day and age, individuals are more concerned with their privacy than ever before. We’ve all been through the cybersecurity training due to fake advertisements and bogus emails.
Third-party data gathers information that can be transferred to companies, and there is a large market for this audience. The Interactive Reporting Bureau reported that American companies were expected to spend almost $19.2 billion acquiring “audience data.”
That’s a lot of money being spent to acquire your personal data!
With privacy concerns, there obviously comes ethical questions. A 2021 Harris Poll for Morning Brew stated 60 percent of respondents do not believe personalized advertising is ethical.
Cambridge Analytica using private data from Facebook to send Donald Trump ads is a main example of how using that information can cross a line that leaves individuals comfortable.
Firefox blocked third-party cookies beginning in 2019 in order to help protect privacy, Apple began doing so in Safari browser in 2020 and Google announced plans in 2020 to begin.
Losing Chrome, which owns roughly two-thirds of the browser market according to a 2021 Statista poll, is a massive blow for third-party cookies.
Those steps by the major internet providers have been a big blow, along with legislation.
The European Union adopted the General Data Protection Regulation, imposing stricter security on organizations targeting or collecting data. This has played a role in the rise of the “accept cookies” prompt you have surely seen while browsing certain websites.
The California Consumer Privacy Act “gives consumers more control over personal information that businesses collect about them,” among other goals. It opens the door for individuals to opt out or even delete personal information that has been collected.
There are also other concerns. There isn’t concrete evidence or direct correlation that targeting people with specific ads leads to an increase in purchases.
Morning Brew cited a 2016 study stating ads don’t have a distinct effect on consumers’ purchasing probabilities and a 2019 report that some find third-party data “often economically unattractive.” Another 2019 report stated these cookies aren’t all that financially beneficial.
There are also examples of ads for men being shown for women and vice versa.
Another drawback is that there is no guarantee the customer will be looking for that product again. What they looked at in the past is not a guarantee it will be on their mind the next day.
With third-party cookies largely being eliminated in the near future, marketers will have to rely on different methodologies for data collection. MMA Global and Prohaska Consulting offered some ideas, but a pair stand out as potential partners.
Google started the Privacy Sandbox to help with web privacy, and announced “Topics'' in January. This results in your browser determining topics that “represent your top interests for that week based on your browsing history.” They are kept for three weeks before deletion.
The Trade Desk created Unified ID 2.0, which it says decreases the reliance on the third-party cookie by working with partners to create an open source ID framework relying on hashed and encrypted email addresses. This prevents tracking back to your email.
The company works with established companies such as The Washington Post, BuzzFeed and Fubo TV, among others.
There are also other options such as contextual advertising, which matches an ad with content. The thought is those interested in the content will be intrigued by corresponding goods.
The Local Media Consortium aids media organizations with first-party data through its NewsPassID. It helps lower the financial burden while reaching more customers within a company’s outreach since different news outlets may be positioned around the country.
Other companies are now selling merchandise or creating loyalty programs in hope of having access to more information.
MAKING YOUR MOVE
With third-party cookies being eliminated in the near future, now’s your time to brainstorm new ideas and strategies. You have some time for trial and error–although try to keep the costs down. Now’s the time to see if there’s a method that perhaps you think may be suited for your brand.
The key, as we always stress here, is to be creative. Without having that third-party information, you’re not going to know as easily what customers are browsing.
You may have to consider unique options that are outside your normal scope, but having a great advertisement always contains engaging, captivating content.
No matter what you do, be sure your content stands out.
It’s going to be a new world shortly enough. Make sure you’re not left behind!
SO, WHERE DO YOU FIND THIS PARTNER?
Well, aren’t we glad you asked! DigiCom is a proud Facebook Marketing Partner. We’re obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all Facebook platforms and placements, provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.