The digital marketing industry is in a moment of transition. From the second half of 2024, Google Chrome, a browser with a global share of over 64%, will no longer support third-party cookies. This change represents a significant challenge for advertisers and demand-side platforms (DSPs), which rely on third-party browsing data to target and personalize ads.
But what exactly are third-party cookies?
Cookies are small data files stored on your device (such as your computer, cell phone or tablet) when you access a website. These files carry information that the website can use for various purposes, such as remembering your settings, tailoring specific content for you, analyzing browsing patterns and more.
Cookies are essential for a personalized web browsing experience, as they enable websites to “remember” data about you, such as your language choices, products added to the shopping cart, login information, among other details. This data is saved on your device and relayed to the website each time you revisit it.
There are several categories of cookies, including session cookies, which are deleted as soon as the browser is closed, and persistent cookies, which are saved on your device for a set period of time. We can also differentiate between first-party cookies (created by the website you are accessing) and third-party cookies (created by external websites that offer services such as data analysis or advertising).
Advantages of the end of third-party cookies for consumers
For consumers, the end of third-party cookies represents a victory in the fight for privacy. Third-party cookies allow advertisers to track users’ browsing on different websites, collecting data on their interests and habits. This practice is often seen as an invasion of privacy, as it allows advertisers to create detailed profiles of users without their consent.
Impacts of the end of third-party cookies for advertisers
The loss of third-party data poses a threat to ad personalization. Advertisers often use this data to create targeted campaigns for users with specific interests. Without this data, campaigns will be less effective and less likely to reach their target audience.
However, the end of third-party cookies does not mean the end of ad personalization. There are alternatives that allow advertisers to target and personalize ads without violating users’ privacy.
How can ads be personalized after the end of third-party cookies?
One of the main alternatives is the use of first-party data. First-party data is collected directly from the user, through registration forms, surveys or other interactions. Advertisers can use this data to create user profiles and target ads based on their interests, needs or behaviors.
Another alternative is the use of aggregated data. Aggregated data is browsing data from several users, combined in such a way as to make it impossible to identify individuals. Advertisers can use this data to create user segments based on common interests or behaviors.
Demand-side platforms (DSPs) are also developing new technologies to enable the personalization of ads without third-party cookies. These technologies often rely on machine learning and artificial intelligence to analyze data and identify behavioral patterns.
Here at AGX, for example, we have developed digital marketing solutions that enable ad personalization without third-party cookies. We use a combination of primary data, aggregated data and machine learning technologies to create effective and personalized marketing campaigns.
The transition to a world without third-party cookies is a challenge, but also an opportunity for advertisers who are prepared. Companies that invest in innovative technologies and strategies will have a competitive advantage in the digital marketing market.
Some trends that should shape the future of digital marketing without cookies:
- Increasing importance of primary data: Primary data will become increasingly important for personalizing ads. Advertisers must invest in strategies to collect and analyze primary data from their customers.
- Growth in the use of aggregated data: Aggregated data will also be an important tool for ad targeting. Advertisers should look for reliable, high-quality sources of aggregated data.
- Development of new personalization technologies: Demand-side platforms and technology providers will continue to develop new technologies to enable the personalization of ads without third-party cookies. Advertisers must keep up with these innovations to stay ahead of the competition.
How do cookies and the General Data Protection Regulation (GDPR) fit together?
Third-party cookies and the GDPR are significantly interlinked because this regulation addresses the processing of personal data by companies, and cookies can be one of the methods for collecting such information.
According to the GDPR, it is imperative that companies clarify to users the usefulness of the data collected, as well as the way in which this data will be shared.
We are focusing on personal data here, meaning any information relating to a natural person that can be identified directly or indirectly. However, not all information captured by cookies is of a personal nature.
However, when something as simple as an e-mail address is provided, identification takes place, and it is in this instance that we are dealing with personal data.
Such data is only considered legitimate if it complies with the principles and rights of the data subjects, and if the data protection regime established by the GDPR is respected. Therefore, the collection of personal data through cookies, according to the legislation, must be restricted to what is essential to achieve legitimate, clear and specific objectives.
Although it is not a universal practice, companies should offer users instructions on how to control their preferences through settings on their browser or device.
What is known as “cookie management” goes beyond simply explaining the concept and choosing whether to accept or reject third-party cookies. This management should clarify, for example, how cookies can be removed or deactivated, and reinforce that consent is revocable at any time.
The Termination of Cookies and the Emergence of the Privacy Sandbox
Of course, Google doesn’t just want to stop using third-party cookies without offering an alternative. For those already familiar with the search engine’s approach, the presentation of a next plan was to be expected.
The search for an alternative tool for targeting online ads is obvious, and is exactly why Google has postponed the end of cookies twice. This search for a replacement, which isn’t really a replacement since it wouldn’t be logical to replicate the same system, has been ongoing since 2019. The team responsible for Google Chrome has been working to develop new open standards that allow users’ data to be collected without infringing on their privacy: this is the Privacy Sandbox.
As stated by the company itself, the goal is to: “Promote user privacy on the web, while providing publishers, creators and other developers with the essential tools to establish robust businesses, ensuring a safe and prosperous internet for all.” Until 2021, the Privacy Sandbox housed the Federated Learning of Cohorts (FLoC) project as an alternative to conventional cookies. However, in early 2022, as reported by TechCrunch, FLoC was replaced by Topics.
What is Topics?
It’s an initiative that classifies the websites visited by users into broad themes. This makes it possible to understand users’ interests through generalized categories.
The result? Ads that are also more generic. The rationale is similar to that of FLoC. However, Topics differs in that it anonymizes even more information about website users.
With a duration limited to three weeks, the topics identified are restricted to the user’s device. In other words, there is no intervention from an external server, including Google’s own.
A curiosity: Topics was developed based on the reactions and feedback received by the community during the FLoC tests.
The end of third-party cookies is an important milestone in the digital marketing industry. Companies that are prepared for this change will be well positioned for success in the future.