In recent years, third-party cookies have been a key tool for online advertisers to track users across multiple websites and serve them personalized ads. However, the use of third-party cookies is slowly being phased out by major web browsers, and its eventual deprecation could have significant implications for the advertising industry and online user privacy. It’s no surprise that advertisers are uneasy about what the cookieless future may hold.
Third-Party Cookies: Controversy and Challenges
Among consumers and critics, the use of third-party cookies has long been a controversial issue. Critics argue that they are a threat to online privacy, as users may not be aware that their browsing behavior is being tracked and their personal information is being collected. A recent McKinsey survey reflects consumers’ unease with third-party data collection: an estimated 600 million devices use browsers with some sort of cookie / ad blocking software, and 41% of consumers do not use tracking cookies.
Moral and ethical quandaries aside, there’s a compelling argument that cookies were never really that effective to begin with. In 2016, Arslan Aziz, an associate professor at the University of British Columbia business school, found that cookie tracking only improved ad performance by 2.6%. And the attribution accuracy of cookies is questionable, with consumer identity match rates hovering between 40% and 60%.
The writing has been on the wall for some time. Apple’s Safari browser has been blocking all third-party cookies since early 2020; Mozilla’s Firefox browser began doing so in 2019. In February 2020 that Google first announced that it would be phasing out third-party cookies on Chrome, to be completed by the end of 2024. And yet in a recent survey, Twilio discovered that 55% of brands are unprepared for the cookieless future - and 81% of brands still rely upon third-party cookies.
The Loss of Third-Party Cookies
But what does the deprecation of third-party cookies really mean for advertisers and online businesses? In the short term, many publishers, advertisers and brands may see a decrease in the effectiveness of targeted advertising. Without the ability to track users across multiple websites, some advertisers may struggle to serve them relevant ads.
However, it's important to note that first-party cookies, which are used by websites to remember users' preferences and login information, will still be allowed. And this distinction is critical: in one survey, 74% of consumer respondents said that they are “willing to share preferences, interests, and demographic information directly with brands if that would improve their online shopping experience.”
In the long term, the deprecation of third-party cookies could lead to a shift towards alternative tracking methods, such as first-party data or contextual targeting. First-party data is data collected directly from users, such as their email addresses or purchase history, which can be used to personalize ads without relying on third-party cookies. Contextual targeting, on the other hand, involves serving ads based on the content of the webpage rather than the user's browsing behavior. In both cases, these methods speak directly to those long-held consumer fears - chiefly, that they’re unwittingly giving up information that they thought was private. And a new authenticated audience approach speaks directly to consumers' desire to have a personalized online advertising experience - one that offers a degree of privacy and transparency. All of this presents opportunities for local market advertisers and media companies.
We're Ready For The Cookieless Future
Frequence is more than prepared for the cookieless future - we’re actively living in it. The Frequence platform utilizes a dynamic model of targeting that relies on hundreds of signals, in addition to the third-party cookie. This model includes contextual, behavioral and predictive modeling, and allows us to seamlessly blend third-party data in - and out - of campaigns without sacrificing performance. Additionally, we’re testing a number of cookie replacement technologies, including TTD Unified ID 2.0 and the Google Privacy Sandbox. As the deadline for Google's cookie deprecation policy in 2025 approaches, we will be prepared to implement all of the solutions available to maintain the current product capabilities.
The transition into a cookieless future may not be an easy one, especially for local market advertisers and media companies, who may not have the access to extensive data pools or the resources to analyze and act upon that data. The future of media might be one without cookies, but with Frequence’s customizable, scalable advertising automation, it’s a future that advertisers and media companies need not fear.
Ready to enter the future of media? Reach out to us today.