After years of push-back due to opposition from the marketing sectors, on the 4th of January, Google announced it was finally starting to phase out third party cookies. This will begin with 1% of all users and they will be phased out completely by the end of 2024.
Whilst it has been coming since 2019, the demise of third-party cookies in Google Chrome (with an estimated 65% of browser usage) is a significant turning point for how businesses look to reach their potential audiences/customers.
Google have made this decision to protect users’ privacy and to comply with an ever-evolving regulatory position.
Cookies have been used for many years on the web and can be extremely useful for marketing purposes and analysing behaviours. A first party cookie will remain supported by all browsers and is a type of cookie that is directly stored by the website that the user is visiting – it allows the website owners to collect data, interests, remember personalised settings (such as language or sign-on credentials), what the user has placed in their shopping basket and other functions that provide a good user experience.
However, they can’t be used to track a user’s activity away from the original website. This is where third-party cookies come in to play. A third-party cookie is a type of cookie that is created by a website other than the one that the user is currently visiting. These are used for marketing and tracking purposes – for example, you visit a website that has third party cookies enabled to look at some trainers – this website could then track your browsing activity and allows for targeted marketing - helping businesses across a huge number of sectors to reach out to potential customers and increase their sales.
Despite the warnings that have been given by Google (and other providers) in relation to the removal of third-party cookies, many businesses are still not ready. According to various reports, third party cookies were still being used for around three quarters of programmatic ad buys across all industries as of the third quarter of 2023. Those businesses that have invested heavily on third party cookies to build their strategies for 2024 and beyond are going to have to have a re-think and quickly.
Google has announced a limited third-party cookie deprecation trial to allow some websites time to make changes – but to qualify you have to meet strict criteria and even then, it is for a very limited time.
So, what comes next? It is clear that businesses will need to find the right marketing solutions going forward. We are advising on commercial agreements and data protection law across several alternative strategies.
One alternative, and the one we are being asked about the most, is “contextual targeting” – this solution does not rely on tracking across websites and makes it a privacy-friendly option.
Examples of this approach would be: 1) search engine advertising – adverts appearing on the search page linked to the keywords that have been used; 2) in-game advertising – where products or services linked to the games content and audience are advertised; or 3) social media advertising – products advertised based on users’ interests. Given that they have decided when to switch off third party cookies, it probably won’t surprise you that Google has its own ‘Privacy Sandbox’ ready to go as one of the solutions.
There is also the solution of how best to use first party data – that is data collected directly from a user. Many businesses are looking at how they can use such data and what can be put in place legally to allow them to share such data, including creating partnerships with other businesses and anonymising data.
One thing is for sure, businesses need to move away from third party cookie-based marketing and find innovative ways to reach new customers.
