You’ve likely heard some rumblings in the marketing world about the death of the third-party cookie.
Dramatic language aside, some big changes are coming in how browsers handle user site visit information. Those changes will have an impact on how MDR’s digital display advertising works. So, we want to give you a heads up about what’s happening, what it means for you, and what we’re doing to lessen the impact on your campaigns.
Bottom line: We’ve got this, and we’ll tell you how.
Let’s Talk Cookies
Cookies are the little pieces of data that a website sends through a user’s browser to recognize a device for a future visit. They’re primarily used to relay information about a user’s profile and previous activity on the site. Cookies come in two types:
First-party cookies are created by the websites to remember details about you and your visit—things like your preferred language or how many items were in your shopping cart. First-party cookies are considered good; they help provide a better user experience. Because they are created when the user takes action on a site, like putting an item in a cart, the user is considered to have explicitly ‘opted in.”
First-party cookies aren’t going away. In fact, they’re about to become even more critical for digital display advertising.
Third-party cookies are created by AdTech platforms to enable cross-site tracking, retargeting, and ad-serving. Hubspot explains it this way:
“Third-party cookie data allows you to learn about your web visitor’s overall online behaviors, such as websites they frequently visit, purchases, and interests that they’ve shown on various websites. With this detailed data, you can build robust visitor profiles…then create a retargeting list that can be used to send ads to your past visitors or people with similar web profiles.”
Because third-party cookies capture and use online behavior data without the user’s explicit consent, they have raised privacy concerns. Governments have taken action.
What’s Happening with Third-Party Cookies and Why
Overall, the availability of third-party cookies has been declining for over a decade. This is because ad blockers, first introduced in the mid-2000s, prevent AdTech tags from loading on a web page. And when AdTech tags don’t load on a page, third-party cookies can’t be created.
More recently, the decline of third-party cookies has been accelerated by privacy laws like the EU’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and privacy settings enforced by web browsers. Safari and Firefox block third-party cookies by default.
You’ve probably noticed the banners on many websites requiring that you agree to your data being collected in first-party cookies. These are the result of companies complying with privacy laws and securing explicit consent.
However, the true death knell was Google’s decision to phase out third-party cookies on Chrome browsers, now slated for late 2023*. As Statcounter.com shows, Google Chrome is far and away the most dominant browser, so Google’s decision has determined there will be a third-party cookieless future.
StatCounter Global Stats
Browser Market Share Worldwide — March 2020 – March 2021
How Will This Impact Digital Display Advertising?
Digital display advertising uses third-party cookie data in three ways that will be impacted once they go away:
Audience Identification – When third-party cookies stop working, AdTech platforms that power advertising will not be able to identify audiences as they move across sites. This will limit the scale of audiences available to you.
Ad targeting and media buying – When third-party cookies stop working, targeting strategies that rely on this system will become less effective due to a drop in targetable audiences.
Measurement and reporting – When third-party cookies stop working, it will become more difficult to attribute success to advertising, as it will become impossible to track audiences across sites with cookies.
Obviously, the loss of the third-party cookie will be a big shock to the system for digital display advertising. But ever since it became clear this day was coming, marketing leaders and innovators have been exploring alternatives.
Google has created what it is calling a “privacy sandbox,” where it is testing standards that improve privacy and maintain an ad-supported digital ecosystem. Google is taking a Federated Learning of Cohorts (FLoC) approach that enables targeting by identifying groups of individuals that share common interests. Chrome will keep track of a user’s browsing habits across the web, place the user in various cohorts based on those habits, and then allow advertisers to target their ads to cohorts rather than individual users. But FLoC comes with some limitations: It’s a blunt instrument that categorizes interest very broadly, it only works on the Chrome browser, and it makes attribution more difficult.
MDR and our parent company, Dun and Bradstreet, have identified several paths forward for our clients that offer better prospects for online audience identification, ad targeting, and attribution.
Alternatives to Third-Party Cookies
Here are three high-level options we recommend to help you overcome the impact of third-party cookies going away:
- Alternative Channels – In the multichannel world, there are other options to connect with your audience. You can reallocate focus and investment to channels that don’t rely on cookies but that can still deliver audiences by interest—for instance, social ads on Facebook or LinkedIn, or Paid Search on Google.
- Alternative Identifiers – There are alternative identifiers to third-party cookies that you can start using today. Two options we are testing are identity graphs offered by LiveRamp and TheTradeDesk.
LiveRamp’s Authenticated Traffic Solution (ATS) using IdentityLink
LiveRamp’s Authenticated Traffic Solution (ATS) connects consented first-party user data from a publisher’s site, such as an email address, with its IdentityLink database of the individual consumer’s activity across multiple devices and channels, including offline. LiveRamp’s IdentityLink is a “people-based ID” that is anonymous and privacy-conscious.
Let’s say a visitor comes to your website and logs in or signs up for a mailing list. Their email address is part of the logged-in profile. As part of the login or sign-up process, the user is made aware that their info will be matched to the IdentityLink database. This database connects an individual’s online data with offline data to create what the company describes as a profile, rather than simply trails of online browsing habits. Because users authenticate themselves, they maintain control over the use of their data.
theTradeDesk’s Unified 2.0
Similarly, theTradeDesk created Unified ID 2.0., which it describes as “the ad internet’s first universal identifier.” Like IdentityLink, Unified ID 2.0 uses a consumer’s anonymized email address which is gathered when a user logs in to a website or app.
theTradeDesk explains: “At the point of login, the consumer gets to see why the industry wants to create this identifier and understands the value exchange of relevant advertising, in simple terms (unlike today’s cookies). They also get to set their preferences on how their data is shared.”
These anonymized identifiers can be linked via the email address to offline data, like you have in your CMS system, to build a more complete profile of a customer. This is where the first-party cookie comes back into play.
- First-Party Data – Because first-party cookies aren’t going away, the information you gather from opted-in site activity will continue to be a valuable source of intelligence on customer interests and preferences. How you collect that information will determine your success.
Of course, you’d like additional data about your site visitors, specifically firmographic, demographic, and other attributes. But asking for all of this information upfront is off-putting to consumers and can depress sign-ups or form completion.
Instead, you should collect the bare minimum information about your users and slowly integrate additional data collection during the use of the site. For example, focus on email registration to begin with, and then collect additional information as they engage more with your content and offers.
We’ll Help You Embrace the Future
2021 will be a pivotal year in the transition to the cookieless future, with the 2023 deadline for Chrome* to begin blocking third-party cookies fast approaching.
MDR’s industry-leading education database, including millions of email addresses for educators, can be linked to alternative identifiers and your own customer data to power digital display advertising.
While there is no doubt the end of the third-party cookie will be disruptive, you should have confidence that MDR and Dun & Bradstreet are on the job. We’re monitoring the progress of innovative remediation approaches and identifying the most effective options to ensure continued results.
Reach out to your MDR consultant to talk about your digital display campaigns. We have ideas on how we can lessen any impact from the end of third-party cookies and what actions you can take this year to ensure you can still identify, target, and connect with education audiences in the future.
*Note: This post was updated on June 28, 2021, to reflect the recent news that Google is delaying it’s phase out of third-party cookies until late 2023.