Cookies-Hero

HOW GOOGLE’S THIRD PARTY COOKIES PHASE OUT AFFECTS YOU

Author: Myles Bruce

As you might have heard, Google is phasing out third party cookies at some point this year. Timelines are unclear, and there will probably be delays, but this has been coming for a few years – it was first announced in 2020. Even then, this change is still likely to catch more than a few businesses off guard. 

It’s hard to think of anything that splits opinions more than third-party cookies.

They’re the basis for most targeted digital advertising. Marketers and advertisers love them, because they’re a powerful way to aim their campaigns at the people most likely to buy their products.

On the other hand, consumers may not know about “third party cookies”, but they do know about websites collecting “personal data” about them, and many people are not happy about it.

But what are third party cookies? Actually, let’s go simpler – what are cookies? And why is this phase out both a blessing and a curse, depending on who you talk to? Well, that’s what I’m here to explain.

In this article, I’m going to give you a crash course on cookies, why they’re important for online marketing, and how you can stay on top while other businesses scramble to adjust their strategies.

Consumers-know-websites-collect-'personal-data'
Consumers know websites collect “personal data” about them, and many people are not happy about it

WHAT ARE COOKIES?

Cookies are small files stored on your device (computer, phone, tablet) by websites you visit. They act like little bits of information to help websites remember details about you. Imagine you visit a pub and the bartender recognises you and your order from the previous week. That’s pretty much what cookies do.

What Information Do Cookies Store?

The information that can be stored about you depends on the website, but here are some common examples:
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Login Credentials

When you log in to a site, a cookie might store your username or email address, so you don't need to re-enter it in the future.

Analytics Data

Cookies can track website traffic and user behaviour. This data helps site owners understand how people use their website

Site Preferences

Site Preferences

Some websites let you choose language and location settings. Cookies can remember these details for future visits and make your browsing experience on the site more convenient.

Browsing Preferences

Browsing Preferences

Cookies can track your activity on a website and remember things like what you looked at or items you put in your cart. Sites can use this data to tailor your future visits by showing you items you liked before or remembering choices you made.

HOW DO COOKIES WORK?

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Placing Cookies

When you visit a website, it may ask your browser (Microsoft Edge, Mozilla Firefox, Google Chrome, etc.) if it can place a cookie on your device with details about your visit.

Storing Cookies

Storing Cookies

Your web browser stores the cookies it receives. These cookies then get attached to future requests you make to the same website.

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Using Cookies

When you revisit that site, your browser sends back any relevant cookies it has stored. This lets the website recognise you and tailor your experience accordingly.

How long do Cookies Last?

There are two main cookie lifespans:
Session Cookies

Session Cookies

These cookies are temporary, and get deleted once you close your web browser. They might be used to remember things like items in your shopping cart during an online shopping session.

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Persistent Cookies

These cookies stay on your device for a set length of time, or until you delete them manually. They are usually used to store things like login credentials or site preferences. This data helps site owners understand how people use their website.

What types of cookies are there?

There are two types, First-Party Cookies and Third-Party Cookies. 

First-Party Cookies are data a website collects about its visitors, like login details, items added to carts, and journeys taken through the site.

So…WHAT ARE third party cookies?

Rather than being put on your device by the site you’re directly visiting, third-party cookies come from platforms like Google and Facebook, and track your activity across different websites.  

They can do this because websites often contain elements from other sites, such as social media buttons, “Like” buttons, or advertisements. When these elements load, the third-party website that owns them can also place a cookie on your device.

This cookie tracks your browsing history, letting them build up a profile of your interests. This information is then used for things like:

Targeted Advertising

Targeted Advertising

Marketers and advertisers can use third-party cookies to target you with ads that they think you’ll be interested in, based on your browsing habits.

Website Analytics

Website Analytics

Some analytics tools use third-party cookies to track website traffic and user behaviour. This information can then be used to improve website functionality and search engine rankings.

Why are third party cookies so useful for businesses and marketers?

Being able to track users and collect in-depth personal information about them makes ad targeting much more accurate. The more you know about someone, the easier it is to tell if they’ll be interested in your product or service. 

Think of it this way: It’s coming up to Christmas, and you know what that means? Office Secret Santa time. You’ve been in your job a few years, and have made a lot of connections in that time. When you go to pull a name out of the hat, who do you think you’d be able to buy a better present for? Dave, the guy you sit next to and talk to every single day, or a new hire, whose name you don’t recognise, and who you’ve never spoken to?

But obviously, the way you’ve got to know Dave is by talking to him over the last few years – more like a first-party cookie. He can understand you learned what he likes and dislikes from what he’s told you, willingly.

Dave probably won’t be as happy to get the perfect Secret Santa present from you if he finds out you hired a private eye to stalk him. This is where the other side of third-party cookies comes from.

Third-party cookies are often used to target ads more effectively

Why is Google Removing third party cookies?

Third-party cookies let platforms like Facebook and Google track users without their knowledge or consent. It shouldn’t be too surprising that a lot of people are unhappy about this, as it’s an invasion of privacy. 

In the last 10 years, data collected without consent has even been used to try and sway people in elections. In the 2010s, a company called “Cambridge Analytica” collected personal data from millions of Facebook users and their friends. They then built up psychological profiles and used them to target swing voters in elections around the world with propaganda.

With strong ties to the Conservatives in the UK, the company largely worked with right wing political parties. These included the INC and BJP in India, the Liberals in Australia, Republicans in the U.S. and Leave.eu in the UK, ahead of Brexit.

One of the major fears around third-party cookies is they could be used for a similar purpose, or in a few other ways, such as:

Profiling & Discrimination

Detailed profiles built from third-party cookies could be used to discriminate against users. Imagine being turned down for a loan or insurance because of your browsing history.

Price Discrimination

Targeted online advertising can become price discrimination. Companies might use data to show more expensive options for the same product to users they see as “richer”.

Social Engineering & Manipulation

Social Engineering & Manipulation

User profiles could be used for social engineering scams. Imagine getting a highly customised phishing email that mentions your recent online purchases or interests to seem more legitimate.

Governments around the world have brought in laws to try and stop this from happening. You might have heard of “General Data Protection Regulation”, or GDPR. It was first created by the EU, then transposed into UK law post-Brexit. This law puts strict rules in place about how personal data is handled, like making sure people consent to its collection. 

Laws like GDPR, combined with people’s fear of what could happen if a site collects data on them, are what has led Google to phase out third-party cookies in Chrome.

Businesses will need to rely more on first-party data (1)
Businesses will need to rely more on first-party data, such as browsing behaviour

What Does the Loss of Third Party Cookies Mean for My Business?

The phase out will affect businesses in a few key ways. Cross-site tracking won’t be as easy, so businesses will have less access to user behaviour and interests, and precise targeting will be much harder to manage. 

Instead, businesses and website owners will need to rely more on first-party data, like email addresses, purchase history, and browsing behaviour on their own pages.

This also means tactics like retargeting (targeting ads on other sites to users who visited your website, but didn’t buy anything) and audience segmentation (breaking down users into groups with similar interests) will become almost impossible by normal means.

On its surface, this is a huge problem for businesses with limited ad budgets. More specific targeting has been a game-changer for reaching the right audience, cheaply. It’s helped small companies compete with industry giants.

However, it’s important to note that third-party cookie deprecation won’t be the end of effective digital advertising. It just means it’s time to shift your marketing strategies.

How Can I Compete Without Targeted Ads?

Here’s the good news: First-party data is often much richer and more reliable than third-party data. By understanding how users interact with your brand, you can tailor experiences to them. This leads to stronger relationships and higher conversion rates. 

The future of advertising is in building trust with your customers. Your users are the lifeblood of your business, and repeat buyers spend more than first-time customers. You should focus on creating strong relationships with your current users and using their information to improve your advertising.

Offer valuable content like guides and whitepapers to users if they sign up with details like email addresses and demographic details (age, sex, location, etc.). Reward repeat customers and give them an incentive to share their data with promotions and offers.

Use the data you collect to build a strong email list, so you can reach interested customers directly with promotions and updates. Survey your customers to learn if there are other websites they like to use, then partner with these other websites to align your ads with their content.

For B2B companies, collected data can also be used to create more detailed buyer personas for sales plays and other cold-outreach marketing methods. By fully understanding the demographics of your current customers, and why they chose your business, you can more accurately pinpoint similar individuals with your outbound marketing, and emphasise your strengths.

New technologies like Google’s Privacy Sandbox are another option. The Privacy Sandbox initiative aims to balance ad targeting with user privacy. Details are still vague at the moment, but several proposals have been made already, under different codenames (usually bird themed). These include:

Browsing Preferences

Users being analysed directly on their device for increased privacy.

Users

Businesses targeting groups with similar interests, not single users.

Ads being matched to the content of a webpage, rather than user profiles.

However, the UK Competition and Markets Authority (CMA) is worried Google’s Privacy Sandbox could limit competition in the online advertising market. This could throw a spanner in the works for Google before any of Sandbox’s bird-themed proposals even get off the ground.

Sandbox
The Privacy Sandbox initiative aims to balance ad targeting with user privacy

FINAL THOUGHTS

The phase-out of third-party cookies will be a challenge, but also an opportunity. Emphasising trust, while building up and expanding your first-party data, sets your business up for success.

By adapting early, you can make sure your business will reach the right audience in the cookieless future. Don’t be afraid to experiment and embrace change – the possibilities are exciting!

At Invanity, we keep our finger on the pulse of all the latest trends and developments in digital marketing. If you want to place your business at the forefront of the evolving digital marketplace, while maximising returns on your advertising budget, we’re here to help.

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