The Background: What Has Happened Recently?
As the privacy concerns and controls about the protection of personal data have been raising since few years, many tech giants such as Facebook and Twitter started to take action to improve their security systems and be clearer about how they keep and use the data of the users. Moreover, the recent legislations like General Data Protection Regulation (GDPR) aims to protect and encourage customers to have more control on their personal data, and to ensure transparency on the usage of customer information by companies. As a result, these protective regulations have also affected the cookie policies and lead to a crumbling of third-party cookies. This trend began with disapproval of third-party cookies by well-known browsers Firefox and Safari and continued with Apple’s decision on the apps that they won’t be holding a device identity unless the related customer consent to that (Remekie, 2021). Lastly, third-party cookies which are also identified as tracking cookies, have been blocked by Chrome, Google’s leading browser. Besides, Google has declared that the company will not publish a substitute for third-party cookies, and in March 2021, it has announced the first-party data will be the new substitution for third-party cookies (Tracking Cookies are Dead: What Marketers Can Do About It, 2021).
After mentioning the terms “first-party” and “third-party”, let’s take a deep dive into the purpose of third-party cookies in general, and then go deep into the future impacts of their loss in terms of digital marketing.
What Does the Loss of Third-Party Cookie Mean?
Unlike the functional first-party cookies which help website owners to collect information; third-party cookies, -also known as marketing cookies- are formed by domains, not by the website. These cookies are used for marketing purposes, mostly for online advertising, by allowing advertisers to track the user every time they visit a website. For example, when a user visits a news website, a first-party cookie is created and held by the website. Then, when the website benefits from ads made via different websites, third-party cookies will be created and these will be held in the computer of a user rather than a website itself (1 et al., 2021). If we have a look at the pros and cons of third-party cookies, it is obvious that they can be beneficial for advertisers and practicable for users by ensuring them targeted ads in the light of “personalisation”. But, on the other hand, visitors have also struggled with privacy concerns as they can’t control which companies are gathering and using their personal data. Even being protected by GDPR’s cookie consent, users wouldn’t able to see for which organisation their data will be using after they have consented to related website (2021).
As cookie-based data is considered as an important input for digital marketing campaigns, basically, demise of third-party cookies means less data to be processed. Therefore, the new conditions lead to marketers and advertisers to find less costly solutions, and to be more creative when it’s come to design a digital marketing campaign. Agencies and brands may be dealing with offering non-targeted ads to their customers by having less clear consumer behaviours. Consumers will be affected positively in terms of privacy issues, but they might be exposed to more irrelevant ads (Juneau, 2021). Publishers will also be affected by the loss the third-party cookies as they rely on cookie-based data. The study conducted by Google among top global 500 publishers, shows that disabling access to third-party cookies decreased the average revenue of publishers by 52% (2021). According to Cookiepedia, The Daily Mail holds 19,136 third-party cookies on its site (Know your cookies: A guide to internet ad trackers - Digiday, 2021).
What Happens Next? What Marketers Need to Do?
- Marketers will be relying on first-party data, high quality data or real-time data.
- Personalisation is still possible considering the value of first-party data.
- Contextual advertising/targeting will be replacing the cookies.
- People-based marketing/advertising will be targeting customer’s real-time behavioural data.
- Advertising might be more human engaged rather than automated systems (Tracking Cookies are Dead: What Marketers Can Do About It, 2021).
Keywords: Third-party cookies, First-party cookies, First-party data, Advertising, Privacy, GDPR
Ilgin Damla Omay
References and Sources
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Remekie, S., 2021. What Happens to Marketing When the Cookie Disappears?. [online] CMSWire.com. Available at: https://www.cmswire.com/digital-marketing/the-demise-of-the-cookie-and-the-rise-of-first-party-data/ [Accessed 21 March 2021].
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