A year ago, Google announced its intent to phase out third-party cookies. On March 3, 2021, they made it clear that they have no intention of providing companies with an alternate means of gathering user information through Chrome, and third-party cookies will be obsolete by 2022.
This isn’t a new development, but the implications are still big. Marketers have come to rely on third-party cookies to track campaign effectiveness, particularly around digital ad spend and retargeting. We use it to understand clicks and impressions tied to ads, retarget users who have been on our websites, and vendors rely on it to personalize our web content to cater to users’ historical preferences.
We’re getting a lot of anxiety-fueled questions about identity resolution. For the most part, we’ll still have the information we need, but many companies will have to beef up their analytics infrastructure to lean more heavily on their first-party data.
What’s the Big Deal About Third-Party Cookies?
Third-party cookies are stored in user’s browsers when they visit your website and they are generated by a different domain than the one you own. For example, if you’re using Facebook’s third-party cookie pixel tracking and have installed the code on your website, some of the cookies generated on a user’s browser when they visit your website will be generated by a domain other than your own (Facebook). Google has code all over the web on many, many domains, making them one of the largest third-party cookie proliferators.
First-party cookies, on the other hand, are cookies stored in a user’s browser that are generated by your domain. We’ll talk more about first-party cookies and why they’re useful in a bit.
Third-party cookies allow advertisers to capture information about web visitors’ browsing habits without serving up forms. Vendors use this information to follow people around the web and serve up advertisements on unrelated pages.
For example, this is how advertisers know I buy my dog a specific brand of prescription dog food on a retailer’s site. They take that information and serve up an advertisement for a different dog food retailer while I’m checking the news and then reading an article on Forbes and then searching for funny t-shirts for my friend’s birthday. As a consumer, it’s creepy. As a marketer, third-party cookies are great!
Third-party cookies allow us to hyper-target (and retarget) people who already demonstrated some interest in our product, which tends to be a more productive targeting mechanism than advertising to broader cohorts.
Interestingly enough, this is exactly the direction Google’s advertising division is moving. They will continue collecting information and placing people into broad cohorts instead of passing along detailed user information. In other words, their “walled garden” approach is going to look a lot more like Facebook’s advertising playbook than what we’re used to. Only time and testing will determine how this will compare to today’s digital advertising methods.
Even if ad effectiveness drops, Google’s advertising business will continue to thrive after this big change. A few cynics have pointed out this move gives Google an even larger competitive edge. Smaller online advertising businesses are going to struggle. This particularly applies to retargeting platforms.
Why We’re Not Panicking
While the days of third-party cookie data are numbered, first-party cookies aren’t going away, and we’ve yet to meet a customer that has gone all-in on retargeting. Most of us will be able to research websites that attract our target audience and inquire about advertising or work with an agency to do this on our behalf to fill the retargeting gap. Who knows? Retargeting companies may already be pivoting because the death of third-party cookies has been coming for a long time (Firefox and Safari got rid of third-party cookies quite some time ago).
First-party cookies collect data related to user’s preferences on your website. The ability to organize this information and use it for identity resolution is going to be vital for marketers, and there are several companies that have already figured out how to make this data work for them. For example, first-party cookies are how Amazon knows which product recommendations to make on the home page and whether you still have items in your cart. It’s also how websites keep track of your language preferences and whether you’ve recently logged in.
What did concern us was a recent webinar featuring industry experts on this very topic. Someone suggested falling back to “directional” influence and media mix models to report on marketing effectiveness. Another person suggested gating everything. Just, no. No to both.
There are far better options, friends!
Worried? Here’s What You Can Do Today
There are three things we would recommend doing today to minimize any data gaps you’re likely to encounter in the future:
- Create UTM guidelines and have people stick to them (note that UTM parameters aren’t Intelligent Tracking Protection compliant and may reduce the lifespan of your first-party cookies)
- Clean, enrich, and normalize data across your tech stack for a unified view of your accounts and contacts/leads (or work with a marketing analytics company that can help you)
- Invest in a data warehouse or data lake that can house your first-party web data so you can retroactively deanonymize data (or work with a marketing analytics company that can help you)
Getting the most out of your first-party cookies and honing your UTM usage means you’ll have the opportunity to provide personalization (using Optimizely or Real-Time Personalization) without third-party cookies. For example, suppose you have a self-service product and an enterprise-level product, and you can tell a website visitor has been digging through how-to self-service pages. In that case, you can still improve their experience with personalization.
Cleaning and unifying the data you collect today will be the largest hurdle for most marketers, but it’s worth jumping. B2B marketers must catch up with their B2C counterparts and begin leveraging customer data platforms (CDP). CDPs allow companies to view all activity and data associated with a person or account (depending on the level you’re aggregating at for a given report) regardless of where it happened.
Using a CDP means the difference between only understanding what took place immediately before a form fill and having the ability to trace backward from a sale to what caused the first interaction with a website visitor from that company. Because a CDP should have plenty of storage (enough to store website activity data), you’ll be able to build a person’s history up over time, retroactively updating historical data as more information comes in. (CRM not built for scale).
Why go to this effort (or hire a marketing analytics company that specializes in this technology)?
We don’t see executives’ reporting expectations changing because of Google’s announcement, so we’ll stick with our mantra that more insights are better than some. The demand for proof that marketing is making the most of its investments has been intensifying over the years and will only continue to climb. Don’t let Google get in your way of scaling your business—begin advocating for a customer data platform today.
If you have questions about identity resolution or how CaliberMind can help you prepare for the death of third-party cookies, contact us.