Cookies have been a vital part of the PPC advertiser’s arsenal for many years, helping marketers to understand how consumers behave and what happens after they click on an ad.
However, that importance and usefulness has begun to wane thanks to the impact of new channels, new devices and new technologies. Paths to purchase are no longer as straight as they once were; it’s not uncommon for an ad click to be followed by extensive research, the use of mobile and desktop devices and a non-linear progression towards conversion.
There are also privacy concerns and cookie blockers incorporated into modern browsers which also eat into usefulness. We are now entering a new phase; that of the cookieless world.
Cookies, Google and Chrome
Google announced plans to drop Chrome support for tracking cookies back in January 2020, saying it would be done within two years. This move will coincide with the introduction of the Chrome Privacy Sandbox. This is a pivotal decision by Google, with Chrome holding nearly 70% of browser market share. A Chrome move away from third-party cookies will result in other browsers doing the same.
As third-party cookies are used to track users, building a profile of them and their interests based on the sites they visit, they play a vital role in personalisation. That information can be used to determine which adverts are most appropriate to that person, making them instrumental in digital marketing success.
Of course, ad targeting is also instrumental to Google’s success as a main driver of ad revenue. This is especially true right now, when the platform is facing stiff competition for ad dollars from Amazon, which has its own wealth of shopper data to inform its ad targeting. Google will instead rely on FLoC (Federated Learning of Cohorts). FLoC will keep track of a user’s browsing habits across the web, and then place the user in various audiences, or cohorts, based on those habits. Advertisers will then target their ads to cohorts, rather than directly to an individual user.
Google has adopted FLoC in order to advance its privacy-first agenda. It describes this evolution as a move towards interest-based advertising while still transitioning from third party cookies.
Timeline for change
- 2019 – The Google Privacy Sandbox is launched with a goal to personalise web ads while keeping user privacy in high regard
- 2020 – Google announces that it will end the use of third-party cookies within two years
- 2021 – Google announces FLoC
- 2021 – Google rolls out FLoC origin trial. This currently affects 0.5% of Chrome users
The impact for advertisers
With FLoC still in trials and the final phasing out of third-party cookies not scheduled to take place for another six months or so, it’s still too early to measure what impact the cookieless world will have for advertisers.
Effect on ecommerce companies
E-commerce sites should still be able to personalise their own ads and recommendations to shoppers on their own platforms. That said, it’s important that ecommerce brands also see this as an opportunity rather than a challenge. That could mean investing in more data-driven marketing strategies, investing in multi-channel attribution measurement tools and exploring other personalisation options. Deloitte recommends that brands also ramp up their own data-collection processes and develop more robust first-party data collection practises.
Effects on SMEs
Although Google Chrome isn’t the first browser to announce that it will end use of third-party cookies, criticism has been levelled at the search engine for this decision, with some detractors pointing out that advertisers will only now know what Google wants them to know.
For SMEs without large budgets this could be a thorny issue but, there are options on the table. Deloitte recommends looking into second-party data, such as that made available by Facebook, explore targeting options like VisualDNA and experiment with other targeting options within the PPC framework, such as geo-targeting and time-parting. For SMEs, taking steps to obtain good quality first-party data is also important, but can take time to grow.
Effect on Big Companies
Larger businesses, such as publishers, who collect data from their sites to then offer to third-party data providers will face a loss of revenue and will need to explore new methods of collecting and monetising user data.
Effect on Marketing Agencies
Adrac has been preparing for Chrome to phase out third-party cookie data since the announcement in January 2020. Amongst the steps we are taking:
- Saving all the data we can (reports, user journeys and conversion funnels for example)
- We have set up a dedicated data sciences department
- We have overhauled our performance reporting platform
- Setting up affinity audiences
You can find out more about how we are working behind the scenes to mitigate the impact of a cookieless world for our clients in our detailed blog post here.