WHAT ARE COOKIES?

Most websites use small text files called “cookies” to enable certain features. When you visit a site or re-visit a site, the sites read cookies to remember your login credentials, which articles you have already read, your language preferences, etc. These are stored on your hard drive and are called first-party cookies because they are given to you by the website you are visiting. No other website or domain can read the first party cookie.

WHAT’S THE DIFFERENCE BETWEEN 1st and 3rd PARTY COOKIES?

To help monetize their website or their service, many websites rely on advertising and analytics tools. By doing so, they allow third-parties to run scripts on their website, and these third-parties also create cookies on your device. Unlike the more benign first party cookies, however, these can track you from one place on the internet to another.

For example, let’s take one of Google’s advertising services – DoubleClick. Let’s say that you have visited one of the sites serviced by DoubleClick, CNN. You now have a cookie that has a unique identifier, the time you saw the ad, your IP address, and where on the site you were when you saw it: a home improvement article. Later, you go to ESPN, which also uses DoubleClick, and can therefore read the original cookie on your device. Your unique identifier connects your two interests (home improvement and baseball games) and increases DoubleClick’s targeted advertising accuracy.

WHAT’S CHANGING?

A new era for digital advertising is upon us, as a post-third party cookie world is on the horizon.

 

As you can see in the chart above, this evolution has been going on since 2018, with increased concerns around privacy. With Google’s much-discussed plans to phase out the third-party cookie within the next 12 months, the industry will see fundamental changes to the way marketers connect to consumers today.

It will certainly impact the digital advertising and marketing industries, where over the last 20 years, third-party cookies have been the predominant form of tracking across many key advertising and marketing technology applications.

Although there are alternative IDs in the ecosystem (Mobile Ad IDs, CTV IDs, etc.), there is no alternative to the cookie in the web/browser space, and currently, nothing in the open marketplace that matches its scale. But in the very near future, alternatives need to be established.
Google, as of March 1st, has not provided any insight on how they are moving forward in the 3rd party cookieless world.

SO WHY IS THIS CHANGE OCCURRING?

There is a major cause to the blocking of third-party cookies, and it stems from a breach of consumer trust. While this type of tracking is useful for the online experience, there has been a growing concern about the misuse of this information when it comes to marketing and advertising. Consumers are often unaware that their behaviors are being tracked and used to market to them. This is seen as a breach of consumer trust given that they have not provided explicit consent to leverage their data. Data ownership, transparent use of data, and consent management, therefore, become the foundation of any marketing strategy that aims to remain relevant to consumers (online) moving forward.

PREPARING FOR THE FUTURE.

  • Ensure you have an ethical approach to data collection and usage
    • Privacy policies updated and on the site
  • Scaling your 1st party data is key – “soft” conversions become more important, especially as a supplement to website pixel-based Remarketing and Lookalike Models
    • Email address captures
    • Telephone captures
  • Store your data in a “data clean room,” which is a secure, protected environment where PII
    (Personally Identifiable Information) data is anonymized, processed, and stored so that it’s available for measurement or data transformations in a privacy-compliant way.
  • Brunner is capturing and aggregating data from all channels into our databases and looking at attribution across channels
    • Flighting media at different intervals will help attribute channel ROI
  • Engage in 2nd party data partnerships
    • Use related companies’ audiences (example: furniture retailer sharing list with a home improvement store)
  • Consider Authenticated ID Graphs
    • Google, Rocketfuel, and others are working on this now.
  • Be more relevant with contextual advertising
  • Produce meaningful content

So, at this point, everything is still a moving target. Brunner is monitoring the industry for solutions but will be encouraging clients to think more about “soft” conversion and how important 1st party data is becoming. If you want to discuss more, contact Dan Gbur at dgbur@brunnerworks.com or (412) 995-9589.