Third-party cookies are officially on their way out

Third-party cookies are officially on their way out

Blog Post_Third party cookies_July21

The advertising industry as we know it is changing. Users are valuing and prioritising their privacy more so we, as advertisers, need to prioritise privacy with much greater urgency. This is why we’ve seen new data privacy laws and restrictions on app tracking (like Apple’s AppTrackingTransparency framework), and this is one of the reasons third-party cookies are officially on their way out.

But it’s not the only reason – cookies are outdated, insecure and our use of them has evolved way past what they were originally designed for. Basically, the phasing out of third-party cookies has been a long time coming and is a necessary step for our industry to be able to grow and evolve.

You may have heard that Google has announced its plans to phase out support for third-party cookies on Google Chrome by late 2023, which will be a big milestone in the shift towards a more privacy-focused web as it’s by far the largest browser with over 60% of the web browser market (compared to the next highest competitor Safari at only around 15%). But Chrome isn’t the only browser to phase out third-party cookies, in fact several browsers have already started to block third-party cookies by default (Firefox, Safari etc.). So, although we have a couple of years before Chrome makes the jump officially, the best advertisers are rethinking their targeting and tracking strategies now.

How will this affect advertisers?

Getting the most out of your marketing requires a clear understanding of what actions people take after interacting with your ads. Most advertisers (including us) currently use advertising and analytics software that uses third-party cookies to track user activity across the web, as well as for behavioural advertising and retargeting. If we change nothing about our tracking and targeting techniques, we will soon be unable to:

  • Target users based on their behaviour across the web
  • Track users across different domains or devices
  • Retarget users with advertising who have visited your website
  • Report on website conversions within advertising platforms like Facebook and analytics platforms like Google Analytics
  • Cap the frequency of ads

What are the solutions?

Finding the right mix of solutions for your targeting and tracking needs is a long-term process and will require a test and learn approach before you get it right. Advertisers will need to stay up to date with technology replacing third-party cookies, build up their first-party data pools and also consider adopting alternative measurement/targeting techniques to cover all bases.

Replacing third-party cookies:

There are several different solutions already out there and they are largely grouped into 2 categories:

  • Solutions without personal IDs work without targeting specific user IDs. These are the types of solutions Google are testing in their Privacy Sandbox and suggesting are the most future proof. Examples include Federated Learning of Cohorts (FLoC), Google’s initial offering for interest-based advertising and FLEDGE, their offering for audience creation including remarketing audiences.
  • ID replacements (universal IDs) are persistent IDs stored in the html5 storage space of a user’s browser which is limited to first-party data only. These IDs allow the information associated with the user to be passed on to approved partners in the supply chain. There are several contenders for the most widely accepted solution including The Trade Desk’s Unified ID 2.0 and ID5 Universal ID.

Using your first-party data:

Although it is not yet clear exactly which third-party cookie replacement methods will be widely adopted by the industry and how each one may integrate with first-party data, we do know that first-party data will be critical in the future of measurement and targeting.

Firstly, Google are advising advertisers to build their measurement foundation on first-party data to preserve the future of measurement. In fact, they have recently introduced a new way to measure conversions when cookies are not available. This new feature is called “enhanced conversions” and will work by allowing your site tags to use consented, hashed, first-party data like email addresses from wherever your conversions are recorded. It’s currently in beta but you can start using them in your Google Ads accounts now with a little bit of help from your web development team.

Facebook’s new measurement tool, Conversions API, also seems to be built around a basis of first-party data. Facebook’s Conversions API collects data using server-side tracking rather than browser-side tracking, i.e., it creates a new, direct connection to Facebook allowing advertisers and partners to share information rather than first passing information from your website to the web browser and then through to the advertising platform (which is how the Facebook pixel works). This solution currently only works for lower funnel events that collect personal user information and not for events where there is no identifier being recorded. We are still relying on the pixel to record upper and middle funnel events (e.g. button/link clicks) until more decisions are made about which third-party cookie replacements will be used by the different advertising platforms and how these will be integrated into Conversions API.

Aside from measurement, first-party data can also help you build a more future-proofed audience strategy. Using customer list/match audiences in your campaigns can help you deepen the relationship with potential students who have shown intent by showing them relevant content to guide them along the student journey with you.

Considering alternative techniques:

Alternative techniques for measuring success and targeting your campaigns will be crucial for future-proofing your strategy. Some of the more popular solutions are contextual targeting, intent-based data, data clean rooms and first-party data co-ops.

We think one of the most promising techniques is contextual targeting. This is an older but very viable strategy which scans site content and images in order to serve relevant ads and most importantly, this tactic focuses on search terms and site content instead of third-party cookies. In order to deliver results comparable to today’s cookie-based targeting, contextual targeting has evolved beyond simple keyword targeting. Some of the upgrades include using machine learning for better understanding of the context and sentiment of each page and using in conjunction with first-party data for better analysis.

Our recommendations to prepare for the future:

  • Review your current first-party data collection methods (i.e. lead forms) to ensure there is a fair and transparent value exchange. In order to build your first-party data pool you need to make it clear what you are offering and what value the students will get by giving you their data and integrate these data collection points at thoughtful moments of your website and student journey.
  • Consider contextual marketing techniques in your future strategies and look for opportunities to develop messaging/creative based on different environments and seasonality to simulate a personalised experience for users.
  • Implement Conversions API on Facebook to use in combination with the Facebook pixel to maximise the data you connect to Facebook. This configuration involves making changes to your server’s environment so will require assistance from your web development team. Facebook advertisers who don’t adapt to these changes may experience higher acquisition costs so we will be starting the process of implementing CAPI with our clients over the coming weeks.
  • Implement enhanced conversions on Google to improve the accuracy of your conversion measurement. This can be set up using Google Tag Manager or manually using JavaScript variables depending on how frequently you change your website code. We’ll be getting in touch with clients and their web development teams to get the ball rolling on this new feature in the coming weeks.

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