Google has been kicking the can down the road on eliminating third-party cookies since 2019, and they made news once again recently by seemingly abandoning their plan to ditch Chrome cookies cold turkey. The “will they or won’t they” dance has been a pain for advertisers, and it seems that, at least for now, they’ve listened to us and put on the brakes.

The Cookie Conundrum: What’s Really Going On?

This doesn’t mean Google’s effort to remove cookies will go away. In fact, you should still prepare for their departure because they are going by the wayside at some point. And if you rely on third-party cookies, it’s going to change how you reach customers online.

ALL COOKIES ARE DISAPPEARING

Myth. First-party cookies are not disappearing. These are cookies which are set by websites you visit directly and help improve user experience and site functionality. They allow site owners to collect anonymized data about their own customers’ browsing behavior. In contrast, third-party cookies are set by external ad servers and track users across multiple websites, enabling personalized ads, frequency capping, and creation of specific audience segments for targeted advertising. These third-party cookies are the ones being phased out due to privacy concerns.

If you’re wondering what the big deal is and why this matters to you, let’s catch you up. You’re probably at least aware of what “cookies” are — just about every website asks about enabling cookies upon landing on them. Cookies are bits of code that websites place on your browser and track your actions on that browser, even after you’ve left that particular website.

Advertisers, like us, then take that data and fine-tune targeting to your specific interests. That’s why you see bike ads after you look at Walmart’s kid bike tab. They help us encourage you to go back and finish the sale.

Cookies also help keep you signed in on websites and a host of other conveniences that make your experience easier on a browser. However, privacy concerns are driving Google to seek other methods while other browsers like Firefox and Safari have already made retargeting more challenging. Google’s news regarding Chrome is a bit bigger than the others because it’s used by nearly two-thirds of desktop users.

The Implications for Advertisers: A Seismic Shift

The implications of this shift for advertisers are significant:

1. 1. Loss of Precise Targeting: Without third-party cookies, advertisers will lose the ability to track users across different websites, making it harder to create detailed user profiles for targeting.
   2. Changes in Retargeting: Retargeting campaigns, which rely heavily on third-party cookies to show ads to users who have previously visited a website, will need to be reimagined.
   3. Attribution Challenges: It will become more difficult to attribute conversions to specific ad exposures, especially for view-through conversions.
   4. Shift in Ad Personalization: Advertisers will need to find new ways to personalize ads without relying on individual browsing history across multiple sites.
   5. Increased Importance of First-Party Data: Brands will need to focus more on collecting and leveraging their own first-party data for targeting and personalization.

ALL DIGITAL ADVERTISING WILL BE NEGATIVELY IMPACTED

Myth. While some digital advertising will be impacted, some channels will largely remain intact. Search advertising, OTT, and native advertising will be largely immune, at least around their core offerings. On the other hand, networks that are heavily dependent on ad personalization—the creepy ever-present ad networks that are tracking your every move will be blinded—will be massively impacted. This means that display advertising and remarketing, at least as we know it, will be severely impacted. It remains to be seen if viable new technologies that are more privacy-aware will emerge to fill those voids in the coming years.

Preparing for a Cookie-Less Future: Steps to Take Now

As we venture into this new frontier of digital advertising, it’s clear that a cookie-less future demands a significant shift in strategy and approach. But fear not – with the right preparation, this change can become an opportunity for innovation and deeper customer connections. Let’s dive into how you can navigate these uncharted waters.

• Embrace First-Party Data: First and foremost, it’s time to embrace first-party data like never before. This isn’t just about collecting information; it’s about creating meaningful interactions with your customers. Think beyond simple data points. Imagine crafting engaging experiences – quizzes that entertain while they inform, product finders that feel like personal shopping assistants, or loyalty programs that make customers feel truly valued. The goal is to make data sharing feel less like a transaction and more like the beginning of a relationship.

• Explore the Potential of Contextual Advertising: But what about reaching new audiences? This is where contextual advertising comes into play, and it’s not your grandfather’s contextual targeting. Today’s AI-powered tools can analyze not just text, but images and videos too. Picture your ad for high-end cameras appearing alongside a travel vlog about capturing the Northern Lights – that’s the power of modern contextual advertising. It’s about being in the right place at the right time, without needing to know everything about the viewer.

• Test New Privacy-First Identity Solutions: Of course, we can’t ignore the emerging solutions aiming to fill the cookie-shaped hole in our hearts. Unified ID solutions and data clean rooms are buzzwords you’ll hear a lot, but what do they mean for you? In essence, they’re attempting to create a more privacy-friendly way of identifying users across the web. The Trade Desk’s Unified ID 2.0, for instance, uses encrypted email addresses. It’s worth dipping your toes in these waters – test them against your current strategies and see how they measure up.

• Diversity Your Advertising Channels: Diversifying your advertising channels is crucial in preparing for a cookie-less future. While there’s no need to panic about cookie deprecation, you do need to expand your advertising mix to include channels that are less reliant on third-party cookies. Search advertising, which isn’t cookie-dependent, should continue to be a key component of your strategy. It typically comprises the largest percentage of a dealer’s digital ad budgets, as it zeroes in on in-market shoppers.

Additionally, consider exploring Over-the-Top (OTT) TV advertising. OTT advertising typically appears on the living room television, not in a web browser, so it is not reliant on cookies. It offers the broad reach of traditional TV combined with digital targeting capabilities. However, be aware that some Connected TV advertising products blend with online video. If you’re using a blended OTT advertising product, make sure you understand how they’re targeting and what will be affected by cookie deprecation.

Taking Action: Key Next Steps

These changes are indeed imminent as in business, a year can pass you by in the blink of an eye. Therefore, to start making this transition now, you should:

1. Audit Your Current Strategies: Identify where you’re currently relying on third-party cookies and prioritize areas for change.
2. Educate Your Team: Ensure everyone understands the implications of a cookie-less future and is on board with new strategies.
3. Test and Learn: Start experimenting with cookie-less strategies now, even while cookies are still available. This gives you time to refine your approach. Start gathering customer data into your CRM to build out the most complete picture possible of your customers.
4. Invest in Technology: Look into tools and platforms that support cookie-less advertising and first-party data management.
5. Collaborate Across Departments: Work closely with your IT, legal, and data teams to ensure compliance and effective implementation of new strategies.
6. Stay Informed: Keep up with industry developments, as new solutions and best practices are constantly emerging in this evolving landscape.

Remember, while the transition may seem daunting, it’s also an opportunity to build stronger, more direct relationships with your customers. By starting now, you’ll be well-positioned to thrive in the cookie-less future, maintaining effective advertising while respecting user privacy.

We’re already preparing clients for that change, so when that day comes there is not a disruption to your marketing efforts. But know that the days of cookies are numbered, even if Google isn’t ready to give up the sweets.