Third-Party Cookies and Upcoming Privacy Innovations in 2024

Since Chrome announced changes to how cookies work in 2019, web browsers such as Firefox, Safari and Edge have begun to modify their privacy-preserving defaults. The web ecosystem is only growing as the Google website announced that third-party cookies and individual tracking will no longer be of interest to them in 2024.

What are third-party cookies used for?

Advertisers:

• To gain a better understanding of their customers.
• To deliver relevant advertisements.
• To assess the success of advertising campaigns.
• To discover when an ad-click or view results in a conversion.

Individuals:

• To keep one’s email account logged.
• To save shipping addresses on a retail site.
• To remember one’s preferences on the websites they’ve visited.

What’s the issue with cookies?

The primary concern is privacy. According to a Pew Research Center poll, nearly 80% of people are worried about their data, and surprisingly, the same percentage believes that the risks of data collection outweigh the benefits. The fact that marketers must record their audience’s browsing history in order to target them with ads, raises serious privacy concerns.

Also, because there are so many web cookies (persistent, first-party, third-party, secure, session), browsers aren't yet capable of identifying each of them, so every time you delete or reset your cookies, sites forget about your online preferences, your digital profile vanishes, and you are logged out of all the sites you signed up for.

What’s the solution?

The goal is simple – to completely stop using third-party cookies.

Google web site is introducing privacy-preserving APIs. This will prevent individual tracking while also benefiting advertisers by allowing them to deliver more generalized ads.

Google Chrome web browser is introducing a new feature called "Privacy Sandbox". To summarize, it will ensure that people’s privacy is not violated and their digital lives are kept private. This will be accomplished by:

1. Obtaining people's permission to collect their data.
2. Allowing users to disable generalized ads whenever they see fit.

Relying on first-party data

The information you collect directly from people is referred to as first-party data. It contains the following items:

• Information extracted from your website, your behaviors, actions, or interests.
• Location and language.
• CRM (Customer Relationship Management) data.

This data is provided directly and with the agreement of web users. First-party data has been recognized for its value and potentially more than ever before, as it can:f

1. Improve customer connections by offering a more helpful and enjoyable customer experience.
2. Make it easier to implement safety measures and prevent data breaches
3. Develop customized proprietary measurement algorithms in-house, which basically means that data is not commercially available and is not owned by a party.

What does this mean to advertisers?

To put it into perspective, only 36% of marketers understand and know what third-party cookies are. However, 100% of them rely heavily on data collected through third parties. Advertisers, marketers, and publishers will be forced to deliver campaigns with no foundation if they do not educate themselves on these issues. They will also be unable to find their audience or place advertisements correctly.

Post-third-party cookie world and advertisers.

1. Advertisers will need to learn how to replace individual identifiers with common interest groups.

Google’s initiative Federated Learning of Cohorts (FLoC) was developed as a safer tracking tool. It will assist advertisers in reaching their target audience in a more settled manner where a user can’t be identified in the crowd. In essence, advertisements will be distributed to groups of people who share a common interest rather than to individuals. For example: "Show this ad to people who are interested in a marketing tool".

FLoC will be able to keep users’ web history private while still providing relevant content.

1. Ad campaign measurement is critical for marketers. The developers of the 'Privacy Sandbox' had this in mind when they created the "Event Conversion Measurement API". It enables marketers to collect anonymized reports on clicks, conversions, and shares.

Advertisers should be aware of this change, in which campaign evaluation will be measured differently, as it currently HEAVILY relies on third-party cookies.

3. Increased spending on contextual advertising. Marketers may need to increase their budget in order to reach their target audiences through indexed pages and keywords.

1. Walled Gardens could become a viable alternative to the cookie-free future.

Even now, Facebook allows advertisers to run ad campaigns but doesn’t tell them where Facebook places them. This means that platforms may allow advertisers to target their audience, but that audience data won’t be shared with an advertiser.

Another example would be Apple's most recent updates. They released a feature that will allow Apple device users to see when individual apps request access to their microphone, camera, and phone gallery. They will also be able to see which third parties they have connected with in the last seven days. All in the name of increasing and improving people's data security.

1. Use Google Ads tag for conversion tracking. It uses first-party data and publicly available information. Advertisers can use remarketing in the same way that Google does by using data that web users have consented to.

Conclusion

Even though third-party cookies are being phased out, this does not imply that all cookies will be removed as well.

Advertisers and marketers who rely on audience data should not be alarmed; they will still be able to report and analyze their behavior; the only difference is that data will be shared with consent.

However, if your advertising strategy and data-driven marketing decisions are based on large amounts of very specific data, you'll have to monitor the news and consider first-party strategy alternatives for the time being.