The End of the Third-Party Cookie: What Marketers Need to Know

Google made major waves in the marketing and advertising world at the top of 2020 by announcing plans to eliminate third-party cookies from Chrome by 2022. According to Google, “users are demanding greater privacy—including transparency, choice, and control over how their data is used” and the goal of the move is to make the web “more private and secure for users.”

Though rather unsurprising given the recent increased international focus on privacy (see the CCPA and GDPR), the announcement was a major blow to marketers and advertisers, who have relied on third-party cookies for targeting and personalization over the past decade. Safari and Firefox already blocked third-party cookies in 2017 and 2019, respectively, but Chrome accounts for about 60% of all web traffic.

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We’re still at the beginning stages of finding a replacement for the third-party cookie, though it’s unlikely that one will be identified that matches the cookie’s individual targeting capabilities. The field of digital marketing is about to undergo a major evolution that will permanently alter the way marketing functions. 

Here’s what you need to know to stay ahead of the curve.

How do advertisers use third-party cookies?

Before we delve into how marketers can preserve audience targeting and personalization in a post-cookie world, it’s important to grasp what exactly is being lost.

Let’s start at its origins. The cookie was brought to life in 1994 by Lou Montulli, a Netscape developer who was looking for ways to improve the user experience on the web. With the invention of the cookie—a data file stored on a user’s browser that allows a web server to recognize a user—he streamlined website navigation. 

For users, this initially did improve their experience. Rather than having to log in each time they wanted to load a new page on a site, for example, users could now just log in a single time, at which point a cookie would be generated that identified the user to the domain server for an entire session.

Advertisers soon realized that they could leverage cookies to not only identify users but also track their behavior around the web. There are two types of cookies: 

  • First-party cookies, which are set by a domain, and 
  • Third-party cookies, which are set by a third-party—for advertisers, this is a supply-side platform that has access to a domain to serve ads.

Third-party cookies are often set behind the scenes, without a user’s knowledge. Say you visit a webpage and are served an ad. At that moment, an advertiser can set a third-party cookie that will then be able to identify you on other websites (often websites that a supply-side platform has agreements with). By tracking users’ activity across the web, advertisers can glean a good deal of information about their audience that aids in targeting, conversion, and frequency capping.

Marketers have come to rely heavily on data-rich third-party cookies to form their strategies and finetune creative. The third-party cookie takes a lot of the guesswork out of advertising. With its impending demise, marketers will need to identify new solutions that allow for the same granularity of data.

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What are the proposed solutions to replace the third-party cookie?

Browsers, publishers, and marketers alike are scrambling to find a replacement that will be compliant with various privacy regulations while preserving individual targeting capabilities.

  • Google is pitching its Privacy Sandbox as a way to maintain ad targeting within Chrome. We won’t get into the details since it’s very much still in development, but the Privacy Sandbox replaces cookies with five APIs (more information here). Advertisers have two main concerns: (1) this is a solution for just a single browser, and (2) most are not confident that Google will release all of the data it collects given that Google has internal advertising teams and business goals in place.
  • On the publisher front, some publishers are working to centralize their first-party reader data into a single platform. Insider, Vox, and Meredith have all been developing their own platforms for the past couple of years, for example. Advertisers are concerned about these disparate solutions creating a “walled garden effect,” where it will be impossible to compare audiences across different platforms.

One thing is becoming increasingly clear: the standardized single replacement that advertisers crave will likely not manifest. The industry is evolving and marketers will need to fundamentally alter the way they operate in order to maintain a comparable level of targeting and personalization in their ads.

How can marketers adapt to a world without third-party cookies?

The third-party cookie revolutionized marketing over a decade ago. In its absence, advertisers still found ways to target their audiences and measure campaign performance. The cookie’s impending end has driven advertisers to lean on older methodologies including surveys, focus groups, and brand uplift studies, all of which are effective, yet somewhat inefficient.

A couple of more innovative and cost-effective solutions exist:

  • CTV/OTT. Connected TV (CTV) and Over-the-Top TV (OTT) have begun dominating the media landscape, drawing increasing viewership from digital and Linear TV. CTV/OTT advertising is an attractive channel for marketers as it leverages first-party data to offer audience targeting capabilities and is hospitable to messaging across the funnel—from brand awareness to direct response. Producing OTT-ready creative can be done quickly and cost-effectively. Read about our best practices for OTT creative here.
  • Video Intelligence. QuickFrame’s Video Intelligence technology aggregates and anonymizes performance data to deliver creative insights that optimize your video production for your target audience. In a newly dry data landscape, you can leverage Video Intelligence to produce data-driven creative that will resonate with your targets and drive your audience to act.

The temptation to ride the third-party cookie wave until 2022 is real, but you must have a plan in place for its inevitable dissolution. And with privacy concerns increasingly influencing global policy, it’s in marketers’ best interests to immediately start incorporating novel solutions to targeting, personalization, and measurement into their strategies.

Learn more about how Video Intelligence can equip you with data that fuels your creative. 

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