The Death of the Third-Party Cookie and What It Means for Advertising

  • Categories:

    Industry Trends, Paid Media

  • Date:

    September 8, 2020

The Death of the Third-Party Cookie and What It Means for Advertising



Industry Trends
Paid Media

As you’ve likely heard, Google will eliminate third-party cookies by 2022. What does it mean for the advertising industry and your business?

First — here’s a quick refresher on third-party cookies, which are different from first-party cookies (codes stored by a website owner on their own domain).

Third-party cookies are tracking codes generated on a website by another website that is not the website the user is browsing (e.g., Google generating third-party cookies on HGTV.com). This is set up by the web server or a scripting program such as JavaScript, which creates the code. The code, in turn, tracks information from the visitor’s session and provides it to the entity that created the third-party cookie. A user can find a cookie on a page, or the tracking code, by viewing their settings in their web browser.

Note: This is an evolving issue. Please check back periodically for updates.

How do advertisers commonly use third-party cookies?

1. Targeting

    This data provides an understanding of consumer behavior including frequently visited websites, purchases and interests. It allows advertisers to target the right consumer and serve them the most relevant message. For example, if a consumer visits three different travel websites within seven days, an ad tech vendor can safely assume this consumer is planning a trip and deliver travel-related advertisements to them.

    2. Measurement and Attribution

      Third-party cookies also give advertisers the ability to enhance measurement for attribution capabilities, which allows for campaign optimization. For example, third-party cookies help track users across different platforms to create a holistic view of what goes into a conversion. As third-party cookies are phased out, these multi-touch attribution models will become less reliable.

      Why are third-party cookies going away?

      Removal of third-party cookies is a direct response to increasing data privacy laws. A growing number of consumers are uncomfortable with how their data is shared. They are demanding transparency, choice and control over how their data is used. As a result, some companies have chosen to implement permission-based third-party cookies, while others have begun to phase them out completely and are seeking new solutions.

      When will third-party cookies be completely gone?

      Browsers have begun a phased removal of third-party cookies in the wake of increasing demand for user privacy and stricter data-sharing laws.

      • Apple Safari and Mozilla Firefox announced plans to begin a phaseout in 2013 and have since blocked all third-party cookies.
      • Google announced in January 2020 that Chrome will no longer support third-party cookies, and a complete phaseout is expected by 2022. As of Q1 2020, Chrome held 68.7% of desktop browser market share. As of Q4 2019, the browser held 64.9% of mobile browser share (eMarketer). Consequently, Chrome’s removal of third-party cookies will have the strongest impact on the advertising industry to date.

      Publishers have also shifted to relying less on third-party cookies within their targeting suite. They’ve done so by sharpening the strength of their first-party data, built from site visitors and subscribers, and amplifying their ability to contextually target. For example:

      • Vox Media announced a new platform, Forte, in December 2019. Forte will utilize first-party data obtained from consumers engaging with Vox properties.
      • The New York Times announced in May 2020 it will also phase out third-party cookies and will utilize first-party audience targeting solutions supplemented by the use of third-party cookies

      What will replace the third-party cookie?

      While the advertising industry has yet to settle on a single solution, there are a number of proposals in the works:

      • Google is working on a new solution called The Privacy Sandbox, a privacy-preserving technology to protect consumers. Google will create targeted groups based on anonymous data that can be used by advertisers (e.g., target, retarget, measure, optimize). Over the next few months, advertisers should test these API methods and provide feedback to aid in the development of alternatives that protect consumer privacy while also supporting an ads-based internet.
      • LiveRamp is launching an Authenticated Traffic Solution (ATS) for advertisers. The ATS will gather real-time, consented user data without the use of cookies. ATS provides control and privacy for users through IdentityLink, offering a single opt-out option for platforms and publishers. Advertisers can enhance their audience targeting and measurement capabilities through ATS — without the use of third-party cookies.

      What’s next?

      Third-party cookies have become a pillar for behavioral targeting, but it’s important to remember that they are just one targeting lever that brands can pull.

      • For example, at Wray Ward, we encourage clients to build customer relationships by growing a CRM database. This allows businesses to collect first-party and zero-party data about customers to target them directly.
      • Forming direct partnerships with publishers and retailers (e.g., Amazon) to access their first-party data (technically considered second-party data to the advertiser) is another effective form of targeting that is growing in strength, scale and precision.
      • Contextual targeting will continue to reach consumers at key moments of research and inspiration.

      The end of third-party cookies has been inevitable for some time. While independent ad tech firms are working on their own solutions, all industry eyes are on Google to create a new, unified standard to replace the third-party cookie moving forward. As a Google preferred partner, Wray Ward is staying close to all updates that will impact our clients’ current and future campaigns. Meanwhile, we will continue to provide updates on any key changes related to third-party cookies and new ad tech solutions.

      Need a partner to help navigate the post-third-party cookie world? Email me.

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