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A day without third-party cookies is looming: By late 2023, Google plans to eliminate the use of third-party cookies in Chrome—a browser used by an estimated 3.04 billion people worldwide, essentially disabling how most of our advertising and technologies work today.
Third-party cookies have been the backbone of the marketing industry for the past decade. They allow ad platforms to trace individual users across the Web, understand users' habits and interests, and then serve ad content that is relevant to each user's browsing history.
So why is Google removing valuable third-party cookies and wreaking havoc on the marketing world? The answer comes down to concerns about data privacy. Google and other ad tech entities are under scrutiny for their data practices, and those practices began to be regulated with the passage of the GDPR by the European Union a few years ago.
Privacy firms are concerned about personally identifiable information (PII)—including full names, bank account numbers, and Social Security numbers—that can be collected from third-party pixels. People question whether entities (such as ad tech companies) collect PII that could be used on a wider scale or without consent from users. The idea is that those privacy concerns will be mitigated with the removal of third-party cookies.
When Google announced its plans for the removal of third-party cookies in Chrome, it left the industry spinning about how ad tech would function in the future. To reach a solution, Google introduced a Privacy Sandbox where ad tech companies, marketers, and website engineers could submit proposals for potential alternatives to fill the void left by third-party cookies.
Other companies, such as The Trade Desk and LiveRamp, began testing their own identity solutions: Unified ID 2.0 and Authenticated Traffic Solutions, respectively.
Many of the proposed solutions rely on a pixel placed on websites that collect users' data (such as email addresses) when they subscribe or login to an advertiser's or publisher's site.
Although the changes are beneficial for protecting users' data privacy, they pose some challenges for advertisers and marketers, specifically in the following three areas.
Publishers and advertisers can use their own first-party data or rely on identity-mapping solutions to target prospects based on categories.
Google also proposed its Federated Learning of Cohorts (FLoC) solution, which would allow user consumption information to be gathered with consent, PII would be scrubbed, and the information would be placed in a bucket of users with similar attributes who could then be served relevant ads.
A lack of confidence exists around whether new targeting solutions will foster adequate retargeting and frequency capabilities.
If technology cannot target individual users, then how can ads truly be relevant to consumers and appear to them at the appropriate times in the consumer journey? If technology does not allow for third parties to follow users as they browse the Web, then how adequately will advertisers be able to track the frequency of ads shown to a single user?
Disabling third-party cookies will also leave a gap in marketers' abilities to follow a user to a brand's website and measure the effectiveness of their ad campaigns throughout the online consumer journey. Advertisers are eager to know how they will be able to track user activity down to their website KPIs without third-party cookies—especially for upper-funnel tactics.
The multitude of privacy changes uncovered thus far leaves advertisers and marketers itching to know what actions they should take now to combat a world without third-party cookies. Because many of the solutions and their impacts are still unknown, it is difficult to give an exact prescription to remedy the loss of consumer tracking and targeting.
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