Chocolate Cookie being torn in half

Death of the Third-Party Tracking Cookie and What to do About it!

January 23, 2023

If you haven't heard of the impending death of the third-party cookie, you will start to hear a lot about it fairly soon. This isn't because it's some great secret but has more to do with the fact that it's on the more technical side of marketing that a lot of people don't really understand.

So, what's a cookie then?

In most cases when people talk about cookies these days they're referring to the HTTP cookie, which is itself a repurposed version of the original "magic cookie".

HTTP cookies are small pieces of data that are stored on your computer while you visit websites. They are used to store information about a user's preferences, such as their language, font size and other settings. Cookies also allow websites to remember usernames and passwords, so users don't need to login every time they visit the site.

But how do these little snippets of data help websites? HTTP cookies provide a great way for websites to store information about users in order to provide them with a better experience. For example, if you've ever visited an e-commerce website and had it "remember" the items in your shopping cart from one visit to the next, then you've experienced the power of HTTP cookies!

HTTP cookies come in two main varieties: session and persistent. Session cookies are short-lived; they expire at the end of the browser session and are not stored on your computer. Persistent cookies, on the other hand, are stored on your computer until they reach their expiration date or until you manually delete them from your browser settings.

In addition to storing data about user preferences, HTTP cookies can also be used for tracking purposes by marketers. This type of tracking consists of installing third-party tracking codes on users’ computers which can then be used to monitor their activities across different websites over time. However, due to privacy concerns this practice has become increasingly frowned upon and is being phased out by many browsers today.

What Types of Cookies Are There?

First party and third party cookies both have the same purpose - they are used to store data about website visitors in order to enhance their experience when they visit a site. The key difference between the two lies in who is storing the cookie.

First Party Cookies

First party cookies are set by the website you are visiting directly. They are used to track your preferences and settings during your session, such as language selection, font size, etc. Some websites also use first-party cookies to identify returning users and provide them with personalized content. These types of cookies usually have short expiration dates.

Second Party Cookies

There's really no such thing as a second party cookie what we're really talking about is second party data. Someone else's first party data that has been shared with you. Where businesses collect user information and they share it with you as a partner, that's second party data.

Third Party Cookies

Third party cookies, on the other hand, are set by a domain other than the one you’re visiting (for example: a tracking pixel from another website). They can also be used for tracking purposes; marketers often install third-party tracking codes on users’ computers which can then be used to monitor their activities across different websites over time. However, due to privacy concerns this practice has become increasingly frowned upon and is being phased out by many browsers today.

A Brief History of the Third-Party Cookie Phase-Out

In February 2020, Google announced its plan to phase out the use of third-party cookies in its Google Chrome browser. This decision was a response to growing concerns over user privacy and the potential for abuse of tracking technology by advertisers.

In an effort to protect users while still enabling advertiser targeting, Google proposed using only first-party cookies instead of third-party cookies. First-party cookies are set directly by the website you’re visiting and can only be read by that same website; they are not shared across multiple domains like third party cookies are. This would allow Google to provide its users with better control over their data without sacrificing the ability for marketers to target ads for individuals.

It's not just Google Chrome that's phasing out third-party cookies. The move towards phasing out third-party cookies is part of a larger trend amongst tech giants like Apple and Mozilla Firefox, which have also taken steps to block or limit access to third-party cookies on their web browsers in recent years.

After a number of delays it remains unclear how exactly Google will implement its plan and what impact this will have on digital advertising, but it is clear that advertisers will need to find new ways to reach consumers online in order to remain competitive as more tech companies block access to third party cookie technology.

Why is this such a big deal now?

Other browsers such as Brave have been blocking third party cookies for years and consumers have taking things into their own hands for a while by installing ad blockers to block them. Between the new, more privacy focussed browsers, ad blockers and the more recent moves by Apple, third party tracking has been slowly dying for years.

The reason that it's such a big deal now is that Google Chrome still has a 62% share of the browser market.

Europe might have implemented laws that require users consent most people still just click on accept because the cookie banner is between them and the particular website they want to see. You can't change user behavior, the only way to change this would be with opt in consent.

The latest statement from Google is that they will move to block third party cookies in 2024.

Google isn't banning all cookies

It is important to remember that there are several types of cookies which Google intends to keep and even encourage the use of.

Types of Cookies That Will Be Allowed

Google typically allows first-party cookies, which are stored directly by the website you’re visiting, as well as any necessary cookies for authentication. Additionally, Google will allow “functional” cookies which can be used to store preferences and settings, such as language preferences or font size. Finally, Google also allows certain “enhanced” analytics cookies which capture user data in order to provide insights into how their website is being used and help optimize performance.

Types of Cookies That Will Be Blocked

Google does not allow certain types of third-party tracking code on its platform, including anything related to advertisement targeting or retargeting. This means that marketers who have been relying heavily on tracking technology in order to target ads will need to find alternate ways to do so if they wish to continue advertising on Chrome. Moreover, Google also blocks any cross-site tracking code (such as scripts loaded from domains outside of the one you're visiting).

What happens after third-party cookies are eliminated?

The death of the third-party cookie will have huge ramifications for the digital advertising industry. A whole range of products and tools we've come to rely on, like remarketing, will no longer function as well, if at all.

Advertisers will face a number of challenges as they attempt to reach their target audiences. Marketers will no longer have reliable data to base their ad campaigns on, making it harder to understand customer behavior and create personalized ads. Additionally, they won't be able to track user activity across multiple sites, meaning that tracking data over time is no longer reliable.

Furthermore, contextual targeting requires a much finer level of segmentation through the use of machine learning algorithms which is time consuming and expensive for many businesses. This increases the cost associated with online advertising and may lead some marketers to abandon online advertising altogether in favor of traditional methods such as television or radio advertisements.

Most marketers expect to spend significantly more on digital advertising to get the same results.

An Opportunity for Alternatives

One industry's decline is usually an opportunity for others. PWC in the UK, for example, are quite bullish about the opportunity for publishers.

Google has openly stated that first party relationships are essential so we'll see a renewed focus on collecting first party data and marketing without the use of a third party cookie.

We'll still see targeted ads but targeting will be done by a deeper understanding of the first party audience. Brands will collect user data in depth and there will be a focus on understanding customer preferences. Brands will need to build a deeper relationship with their users and those brands already doing that will have an advantage.

There will be additional opportunities with how we collect analytics data and other site data. We'll see a range of new tools emerging. We've already seen a number of AI tools come online that help you write better google ads.

Old Skool marketing strategies will re-emerge, even though they really never went away for the large brands.  Big corporates never let go on the focus on their brand and partnership programs but there will be a renewed focus for SMEs and startups.

What Else Changes?

Beyond the changes in how we collect data we'll also see changes in how that data is used.  Sharing first party data will likely be done more carefully and only with trusted partners.  We'll still track users on our own sites to improve their experience but we may not sell all that data to big data warehouses. Cross site tracking will go the way of the dodo.

Browsers will roll out more enhanced tracking protection which will make google analytics less useful and we'll probably see  more privacy focussed analytics companies emerge, like Plausible, who provide analytics without the use of any tracking cookies.

In general terms internet users will continue to expect more privacy and take steps to avoid cross site tracking.  They will expect websites to get user's consent for anything beyond first party cookies and targeted advertising will have to adapt.

What can you do to prepare?

Like with a lot of things, the earlier you start the better.  If you're reading this in 2023 you likely have a big jump on your competitors.

Start by Understanding What You Have

How much of your marketing is operating without third party cookies already? Are you identifying users online or only when a user visits your website? What sort of tracking have you implemented with your social media sites?  What does your first party cookie look like?

If you don't understand some of this you can start by engaging with your own site and socials without third party cookies.  You can disable cookies for individual browsing sessions or use tools like ad blockers to prevent cross site tracking.  Once you've done that, do it all again after you've enable cookies once more.  How are your analytics and data captured now.

You can take this further and enable third party cookies and then go visit other websites.

Implement New Tools and Procedures

One of the best ways get information from users is to ask them, just  don't be creepy about it.  Surveys and tools like Survey Monkey are a great way to start to understand your users.  If they voluntarily the important information you won't care if they block third party cookies.

Outside of full surveys you can ask them for information over time.  Sometimes asking for information in bite sized chunks helps.  You can also incentivise them with loyalty programs such as that by Pabloo and ramp up your social media sites.

You'll need to put more effort and likely more money into PPC ads but the new AI tools like SwiftAds will take the sting out of it for you.

You'll soon realise that you can get more detailed data related to your users from a successful email marketing campaign than you could from third party services and site data.

Implement a Partner Program

If you haven't already got a partner program in place you should start now, if you do have a program in place it's time to have a look at how well it's working and if it needs a refresh.

Partnership marketing is one of the highest ROI marketing tactics available.  Even before the death of the third party cookie, partnership marketing tended to have a much higher ROI than targeted advertising. You don't have to care if the user's browser is going to block cookies and tracking.  

With the right partnership campaigns you can drive your first party data collection and gain second party data with integrity.

Wrapping Up

Yes, a lot of things are going to change and we'll need to find ways of reaching our target audience without third party cookies.

The good news is that Google has recognised that this will cause a huge shake up in the paid advertising industry and has given us plenty of time to prepare.  Also, business has successfully marketed to people without invasive tracking for much longer than it has with.

Personally with branding and partnership campaigns coming back into focus I think marketing is going to be much more fun again, and that's great news!

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