The End of 3rd Party Cookies - What Alternatives Do Exist?

Reading time 10 min

As Google implements restrictions on third-party cookies, many businesses are required to update their web presence and change their privacy policies. Consumers are increasingly concerned with how their personal information and data are being tracked, stored, and monitored. As these concerns grow, companies are tasked with protecting their customer's data and providing transparent privacy policies. This is now forcing companies to explore how they collect and store data for advertising purposes and what the future holds for digital marketing. 

The rise of big data and consumer awareness of how companies utilize their information to advertise relevant products or services has created an intersection where brands and websites need to offer more privacy measures while still optimizing the user experience with personalized content. In the past, websites have used third-party cookies to create a picture of individual users by analyzing their search patterns and how they engage with content online.

GDPR forces businesses to adapt their web presence

As we head towards the post-third-party cookie era, it's imperative for businesses to recognize and implement practices that align with new privacy policies while maintaining strategies that allow for personalized advertisements and may actually improve them. When the EU established the General Data Protection Regulation (GDPR) policy in 2016, they established a set of guidelines for protecting user data and personal information that requires data controllers to follow numerous technical practices to protect user's privacy. Moving forward, web design and IT services must not only acknowledge these changes but remain proactive in staying ahead of upcoming EU E-Privacy regulation and user tracking. The GDPR requires data controllers to disclose any data collection upfront, state why they are processing that data, prove that they are doing so lawfully, and state if it will ever be shared with third parties during the time that the information is retained. Additionally, the GDPR outlines six cornerstones for the legality of data processing; consent, public duty, vital interests, contracts, legitimate interests, and legal requirement. The policy also allows users to request the data that has been collected on them and revoke that data at any time.

With Google phasing out third-party cookies, first-party data gain relevance

Publicly Google has framed their decision to ban third-party cookies as a move toward a more private internet where users are protected from tracking and personalized advertisements; some industry insiders believe it's a move to tighten their grip on user data and personal information. Google already dominates both the digital ad and web browser markets and relied on third-party advertisers for a small portion of its revenue. As data information becomes more scarce due to the third-party cookie ban, first-party data analytics will become that much more critical. Google already collects first-party data in Gmail, Google Maps, YouTube, Android, and even its iconic search bar. This data will continue to be collected even after the ban of third-party cookies and will still be utilized to develop personalized ad campaigns. Also, Google was not the first big tech company to ban third-party cookies, they followed suit after Firefox, and Apple's Safari banned them in 2013. Some point to this as evidence that Google may not be operating with the consumer in mind as they have tried to make this appear. Whatever their motivation, one thing is clear, small and medium businesses will need to develop strategic plans and begin implementing these measures quickly.

What are the alternatives for online advertisers?

In the past, third-party cookies allowed data processors vital information about users' habits, but with new policies and guidelines in place, websites and IT professionals must get creative to comply with these regulations and evolve to meet their client's needs and maintain users' privacy. Users' profiles will become increasingly vague as no targeted identification means there is no usable data for online targeted ads. This leaves the market open to discovering and establishing efficient and effective alternatives to third-party cookies while still accessing user data to predict consumer trends and create compelling, personalized advertising content. 

One of the best alternatives to third-party cookies is to opt for first-party data collection and processing, which establishes consent initially and allows websites and data collectors to generate as much data as possible while still keeping users privacy and digital profile secure. In turn, this data can be used to create targeted marketing campaigns that deliver quality advertisements based on users' real needs and desires. This model is the closest to the third-party cookie system and relies on the user granting consent to have their data utilized for personalized marketing purposes. Some industry analysts have seen this as an advantage in that it puts the data collector in an active role instead of playing defense against user privacy advocates and protocols.

How are website owners affected?

Ecommerce retailers and web operators are now tasked with complying with these new bans and allowing their website visitors to opt-out of cookies allowing for a fully anonymous browsing experience. These new regulations do not entirely remove the ability to use third-party cookies; they just require user consent. If you’re reading this, surely you’ve seen these pop-ups on numerous websites that offer links to privacy policies and the option to agree to allow tracking by cookies. Some sites take this consent a step further and provide multiple options for permission. These can include consent agreements based on specific case uses like web performance and analytics, marketing purposes, site personalization, practical uses like research, and essential uses. When a user consents to allow third-party cookies, it’s business as usual. Still, when they opt-out, the responsibility to protect their personal information and browsing habits falls on the website operator.

While online publishers widely view the ban on third-party cookies negatively, it may present unique data analytics opportunities that utilize innovative solutions. One of the most significant shortcomings of third-party cookies was the lack of cross-device tracking capabilities. The ability to reach users across multiple platforms from mobile to PC opens up tons of new data analytics and targeted personal advertisements that will likely shape the future of the customer journey. Third-party cookies shaped how web operators handled advertising and user data in the past but looking forward, they must innovate and explore alternative methods for reaching their target audiences with effective marketing campaigns that don’t rely on outsourced data collection and analysis. 

What businesses can do in the post-third-party cookie era

Ultimately the ban on third-party cookies will still allow for businesses and websites to perform their own data analytics when users visit their site, and they can use this data to develop a comprehensive user profile to identify and create personalized advertising content. As with any evolution, many were shocked at the initial announcement to ban third-party cookies, but advertising professionals have predicted this happening for years. If your business relies on third-party data analytics, it is essential to develop a roadmap for utilizing first-party cookies, unique identifiers, multiple level marketing strategies, and consent agreements to continue your advertising model. 

While no single answer exists for how to respond to the third-party cookie ban, experts have identified some of these alternatives as the most effective emerging trends:

  • Google’s Privacy Sandbox

  • Consent Agreements

  • First-Party Cookies

  • Unique Identifiers

  • Multiple Marketing Strategies

Anonymity protections are being increasingly implemented to protect users, and Google has created what they call the Privacy Sandbox, which will still deliver effective analytic results for advertisers and marketers. However, especially one element of the Privacy Sandbox - Federated Learning of Cohorts (FLoC) is heavily criticized by the Electronic Frontier Foundation for creating new problems while solving the privacy issues. Google is testing this concept in various markets, but users in the EU are not included in the test. It is not clear yet if FLoCs are in line with GDPR.

The internet has transformed nearly every aspect of our lives, from how we interact to the way we consume information and purchase products. The third-party cookie ban is another evolution in the already dynamic, fluid, and fast-paced world of IT services. Developing a thorough understanding of these changes will allow businesses to thrive and prosper as the shape of the internet changes. Working with a well-informed IT team can help anyone pivot their data management solutions to maintain smooth operation and effective marketing solutions.

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