What will the impact of Google Ending Support for 3rd party Cookies tracking be?

In this episode I talk about Google’s announcement regarding phasing out support for 3rd party cookies. What are 3rd party cookies? What do Brands need to do to prepare for the changes and what is google proposing as an alternative to 3rd party cookies?

What is Googles privacy sandbox?

Ad Exchanger calls it the “Cookie Carnage”  some are calling it the “Cookie Apocalypse” because Google announced details more on and initiative called ” Privacy Sandbox” which in their own words is “to develop a set of open standards to fundamentally enhance privacy on the web… web more private and secure for users”  They make the case that cookies which among other things were initially designed to make advertising more relevant to buyers are now being used in way far beyond their original intent.  So the will be phasing out support for 3rd party cookies. So as a marketer you should better be paying attention because the potential impact on the Adtech /Martech industry is HUGE. Here’s a primer on everything you need to know about the ban of 3rd party cookies; who the winners and losers will be and what you can do now to prepare before 2022 which is when 3rd party cookies will no longer be supported.

Who invented website cookies and why are http cookies important?

Cookies were invented in 1994 Netscape programmer Lou Montulli which was initially designed to save server space for Netscape by storing data on the users computer instead of the browser companies servers. So as a consumer you know how these days you go to any website and you get a notice that indicates the site uses cookies and asks you to accept their use? Well when you do that you allow the publisher to drop a cookie which is a small piece of data “a unique number”” “Session identifier or token” from that publisher that is stored on your computer while you’re browsing their website: Why? well it allows the site owner / Publisher to do many things including keep track of things like items in your shopping cart, things you looked at so it can suggest others.

What is the difference between 1st party cookies and 3rd party cookies?

This type of cookie is a 1st party cookie and is unique to that website and allows the website owner to do things like:

  1. Track your browsing behavior including pages you visit, your preferred settings, your geography, things you buy, things you looked at so it can suggest and personalize your experience.
  2. Cookies also remember your login details so when you return to a site you don’t have to login again
  3. Cookies also allow website owners to track unique visits distinguishing new visitors from return visitors

So what are 3rd party cookies and how do they work?

3rd party cookies which are cookies which include cookies dropped by the web browser you use when browsing the web and or cookies dropped by advertisers on a site – it allows advertisers and ad networks to:

  1. Track which sites you visit what  you buy and build an anonymous profile of your interests and affinities
  2. Advertisers can then serve you targeted ads, they can know which ones you’ve seen and which ones you’ve clicked on
  3. Ad networks can combine cookies to put you into an audience segment which allows advertisers to serve relevant ads
  4. Ad companies buy and sell these 3rd party cookie data

So when Google phases out support for 3rd party cookies in 2022 and they no longer work how will that affect the Adtech, Martech and advertiser publisher ecosystem. Well there is a lot that needs to be figured out but let provide some context because we are talking about chrome which has 63% of the Browser reach and because Firefox and Safari who have already blocked 3rd party tracking this means that for advertisers 82% of the browsing ecosystem is affected.

So what is Google proposing as an alternative to 3rd party cookies?

The Privacy Sandbox will have 5 Application Program Interfaces API’s which Digiday says “Advertisers will use each API to receive aggregated data about issues like conversion (how well their ads performed) and attribution (which entity is credited, say, for a purchase)” these 5 Privacy Sandbox API’s will replace 3rd party cookies as follows:

Googles 5 API’s that replace 3rd Party cookies: (Credit Digiday)

  1. The trust API is Google’s alternative to CAPTCHA; it will ask a Chrome user just once to fill out a CAPTCHA-like program and then rely on anonymous “trust tokens” to prove in the future that this person is a real-life human.
  2. The privacy budget API will limit the amount of data that websites can glean from Google’s APIs by giving each one a “budget.”
  3. Google’s conversion measurement API alternative to cookies will let an advertiser know if a user saw its ad and then eventually bought the product or landed on the promoted page.
  4. The Federated Learning of Cohorts will rely on machine learning to study the browsing habits of groups of similar users.
  5. The final component is PIGIN (referring to private interest groups, including noise), which lets each Chrome browser track a set of interest groups a user is thought to belong to.

What does replacing 3rd party cookies mean for  Brands, Advertisers and publishers?

In my opinion there will be Winners and Losers as follows:

Winners: Old School Marketing Email and List Building Tactics will Experience a Renaissance

The Brands with a strong and intentional 1st party data programs will win. Email could experience a bit of a Renaissance even as brands need to be expanding their 1st party data set to include cell phone numbers. Email will still be a solid part of a marketers arsenal and those 1st party cookies. Even old school attribution like last click might see a come back.

Winners: Data consolidation, hygiene and cleansing technology

Data hygiene internally will become even more important and tech that enables brands to have a single consolidated view of the customer will win.

Winners: Big Brands with big pockets that can acquire Adtech and data tech will win

This is why you see brands like Nike acquiring AI tech like Celect , Zodiac and Design firm Virgin MEGA; or McDonalds acquisition of Dynamic Yield According to Bloomberg: “Dynamic Yield Ltd. develops a machine learning engine that enables marketers to increase revenue through personalization, recommendations and automatic optimization across web, mobile and email. Its platform provides solutions in the areas of segmentation, omni-channel personalization, optimization, behavioral messaging, recommendations, personalized emails, mobile personalization and dynamic advertising.”

P&G that has amassed over 1.5 Billion   online IDs globally which it is using to build smart audiences. Marc Pritchard Brand Officer at P&G talks about how they have been acquiring device ID’s and PII through their DTC – Direct to consumer sites which enabled them to bring programmatic buying in-house. All these power moves put them in less of a vulnerable position than their peers in my opinion.

Winners: Large publishers with Walled Gardens and those with direct deals with them

Publishers with logged in users will finally have the last laugh after programmatic RTB platforms had snatched their crowns for a while. Publishers with large walled gardens with sticky content and have the ability to provide advertisers contextual advertising will have some leverage. Native advertising will morph with players like Outbrain/Taboola who have these network relationships that enable both the rotation of the publishers own content and advertisers content should be ok. Platforms like Linkedin, Facebook that enable the use of 1st party data targeting through custom audiences will win.

Winners: New Tech Notifications platforms, SMS, Messaging, Mobile in general

Mobile strategies and device oriented ID’s will experience accelerated adoption

Winners: The Browsers will win

The power shifts from the web servers to the web browsers who as google indicates have had the challenge of not having a way to classify cookies and differentiate between the cookies that maintain your login credentials vs ad tracking cookies for example so when a user clears their cookies it’s all or nothing. They don’t want to outright block all cookies because this also gives developers who have hostile intentions; interlopers the ability to find other ways to track you with what is called “fingerprinting” … Google says “With fingerprinting, developers have found ways to use tiny bits of information that vary between users, such as what device they have or what fonts they have installed to generate a unique identifier which can then be used to match a user across websites. Unlike cookies, users cannot clear their fingerprint, and therefore cannot control how their information is collected.” Google is working with all stakeholders to create standards that balance out protecting users privacy but also allow for the continuation of the ad supported free content model.

Winners: Universal ID proponents

Is it going to be one of the traditional players like Google or Facebook that become the keeper of the universal ID or will it be data consortiums like LiveRamp’s Universal ID? Or will it be a blockchain enabled platform like Brave … the jury is still out on that… it might be a whole new paradigm

Winners: Content will remain king and the publishers with premium content win

need I say any more?

Or will Voice Technology make this conversation all irrelevant? I have no idea but as a marketer you can be sure I’m personally getting ready.

So Who Will The Losers of the 3rd party Cookies Apocalypse be?

Losers: Ad Platforms reliant on dropping cookies for tracking.

Ad platforms will have to re-engineer their platforms to work with this new 5 API structure and invest in more Publisher deals.

Losers: Brands with low brand equity and no 1st party data strategy

Developing and nurturing a trusted, memorable Brand becomes even more important. We’ll see the reduction of clickbaity sites as their advertiser pool will dry up. Brands who have been reliant on programmatic but dont have the brand clout or budget to do direct deals with publishers will struggle.

Losers: Retailers and any of the advertisers who have been reliant on cross-domain tracking

Poor retailers… its been a rough last few years and it’s about to get event rougher if they do not prepare for cross domain tracking to change, Industries like auto that have relied on audience segmentation which combines 3rd party cookies basically have 2 years to start figuring out.

As you can tell there is still so much to figure out but if I were you I’d be looking at being more deliberate about your data strategy.

Here are 5 things you can do now to prepare for the phasing out of 3rd party cookie tracking in Google Chrome

  1. If you don’t already have one and you are a large enterprise you need a Chief Data Officer or you need someone whose job it is to think about this all day.
  2. Build a 2-5 year data plan that includes focusing on diversifying your 1st party data set to include email, device IDs, SMS, Messaging and a universal ID. Get the expertise and technology you need to enable personalization in all your experiences.
  3. Focus on Data consolidation and hygiene work on getting a single view of your customer in a single database.
  4. Focus on your Brand because this going to be where the battle is won or lost for some of you. The Brand that buyers know even when they are not in the market to to buy is going to win. The brand that is the defacto will be able to ride out these challenges.
  5. Invest in building native content and advertising relationships with premium publishers /podcasters/app developers and Influencers in your industry or sector.

 

 

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