Cookies are the currency of the world of digital advertising. At least that’s how they were once. Now is the time to get ready to phase out third-party cookies and begin using cookie-less strategies. Making the switch to contextual advertising will now require getting ready for a world without cookies.
Beginning today, January 4, Google intends to remove third-party cookies from its Chrome browser by the end of 2024. With 1% of cookies impacted, the tech giant has planned a gradual phase-out that will begin today and give marketers time to adjust before the full removal by the end of the year. Publishers’ and advertisers’ interactions will undoubtedly change significantly as a result of the gradual removal of cookies. It represents a significant policy shift and a move towards privacy-focused transactions.
Google’s third-party cookies phase-out plans
As part of a pilot program, Google will begin gradually phasing out cookies for 1% of Chrome users starting today. To prepare for the big show, Google’s masterminds will observe, evaluate, test, and reorganize. Understanding the nature of the cookie-less environment and its practical implications will be greatly aided by this small-scale deprecation. Although Google did not immediately disclose the precise number of cookies for the impacted internet users, it is possible that up to 30 million cookies are in place. Despite being gradual and phased out, the phaseout would be finished by this year’s second half, most likely in Q3 2024. If regulations allow, Google intends to remove third-party cookies for all Chrome users.
A major shift in the advertising world
Google wanted to allow publishers and advertisers ample time to get ready. Thus, the delayed launch. This will compel significant adjustments to the way digital advertising functions. Some worry that it might force websites to use more obscure tracking methods. Given how heavily the digital advertising sector depends on third-party cookie tracking, the news is probably going to cause controversy. Certain ad tech companies may lose their present capacity to gather data. Rather than being genuinely excited, the advertising industry’s anticipation can best be described as cautious skepticism. It is independent of the segment of the advertising business, be it browsers or ad tech providers.
Origin of third-party cookies
Originally, the goal of third-party cookies was to provide website users with more specialized advertisements. Rather, they evolved into something that was frequently centered on obsolete consumer behavior. To generate behavioral profiles, cookies were combined. Because of retargeting and open conversion loops, website users would still see ads for items they had previously browsed six months ago.
How does the advertising world perceive this?
At the moment, the Privacy Sandbox is not a problem for any ad tech providers. Some vendors may view the partnership with Sandbox as a calculated move to remain relevant and competitive in light of Google’s strong market position. This decision was made easier by the testing grants Google is providing. That being said, some businesses aren’t as welcoming. They are unwilling to support the Sandbox as long as they believe it will further reinforce Google’s supremacy over the advertising industry.
With this first rollout, advertisers, publishers, and creators should take advantage of the chance to test and modify their strategies to effectively adjust to this change. Although the digital advertising industry has had nearly four years to plan, it is now necessary to develop flexible and adaptive approaches to determine what works and what doesn’t.
Important Alternatives to Cookies
It’s safe to say that there are a lot of interesting and complicated third-party cookie alternatives available. Shifts on this scale leave alternative identities in a constant state of change. They face difficulties with privacy compliance, interoperability, and measurement and targeting efficacy. Even the front-runners struggle with personal issues.
To get ready for a world without cookies, advertisers need to gradually wean themselves off third-party data. To address this, first-party data-based solutions must be adopted, enabling advertisers to use their own, consenting user data for targeting. Instead of cookies, publishers and advertisers are experimenting with several first-party data-based solutions.
In the world of digital advertising, first-party cookies are a tactical turning point. Because they are site-specific, these cookies are ideal for meeting the requirements and preferences of different publishers and websites. Everything is connected to Google’s Privacy Sandbox program. The main focus of this large-scale project is privacy compliance. It seeks to satisfy cross-site use cases without using third-party cookies or other tracking mechanisms while balancing the needs of digital advertising with the privacy of individuals.
User email addresses are necessary for a hashed email solution to work. A user provides a wealth of identity and online behavioral data when they log in with their email address. This crucial information, which is now hidden by an encrypted identifier can be shared further up the chain with media buyers for more precise targeting. It can be pushed through a hashed email API and ensures that user data is fully secure. Ad tech companies first proposed hashed emails as a substitute for third-party cookies.
One more of these alternative methods for third-party cookies is to use contextual data, which provides perspective about an online user rather than presumptive behavior. Contextual data assists advertisers in making decisions based on the content a user is currently consuming rather than previous behavior in this way. In addition to being frequently more effective, contextual data is also less expensive to obtain than third-party data. Generally speaking, contextual ad impressions are less expensive than behavioral ones. Given that the targeting is based on context and recency rather than legacy behavior, it can also aid in providing a better user experience.
Google is testing APIs. These include the “first locally executed decisions over groups experiment” (FLEDGE) and the Topics API, which have taken the place of the Privacy Sandbox’s initial federated learning of cohorts (FLoC) proposal. After analyzing a user’s three weeks of content consumption in an anonymous manner, Topics creates five “Topics” every week, one of which is sent in response to an ad request. The FLEDGE API auctions don’t rely on following users around websites because they operate directly within Chrome.
Retail Media Networks
Another cookie-less option that has emerged is retail media networks. Through these platforms, advertisers can reach more niche audiences and gain access to first-party data, including loyalty and point-of-sale data. By expanding the scope of this first-party data outside of the retailer’s owned and operated properties, RMNs assist advertisers in reaching in-market consumers without the need for cookies.
Chartering the course in the future.
The ad tech industry has entered uncharted territory with Google’s third-party deprecation. Everyone is wondering what the world will look like when the last third-party cookie disappears. There’s no denying that this ushers in a new era of digital advertising where privacy is crucial. Publishers will need to adjust to first-party cookies and other practices like hashed emails, and advertisers will move toward more content-based and contextual approaches.
Businesses of all sizes will need to be inventive and flexible to succeed in this new era. This entails making investments in fresh platforms and technologies that can adapt to the change and create new opportunities for efficient audience targeting without compromising user privacy. It’s not all bad news, though. A plethora of prospects lie ahead of us. Recall that in the cookie-less future, flexibility is essential.
- Netra is a Dual Masters graduate in International Business and Marketing. She is a content-writing enthusiast and a social media addict. In her downtime, you will find her headbanging to Pop songs from around the world. She is also a sports fanatic and especially loves F1, Volleyball, and Cricket. Her hobbies are baking and watching Anime.
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