For decades, marketers and advertisers relied on cookies to monitor website visitors and gather data about them as they browsed the web. Ultimately, the data collected provided website visitors with personalized online experiences. But soon this likely will change as Google plans to phase out third-party cookies on Chrome browsers by the second half of 2024.
What will this mean for businesses that depend heavily on third-party cookies for marketing? This article provides a brief overview of the third-party cookie phase-out and how businesses can prepare for a cookieless future by leveraging self-declared data.
State of the Industry: Third-Party Cookies
Many people express concern about how third-party cookies collect and handle their data. According to a recent Statista study of about 10,000 respondents, more than a quarter said they disabled third-party cookies in their browsers to protect their online privacy.
In light of users’ demand for greater privacy, browsers such as Firefox and Safari deprecated cookies in 2013. Google has been slower to act. In 2020, it followed suit and announced it would phase out third-party cookies in Chrome that year. However, Google then extended the deadline to late 2023. Later, the tech giant hit pause again, adding one more year, to give developers and marketers more time to test the Privacy Sandbox — the new alternative to third-party cookies. This time around, it looks almost certain Google will phase out cookies on Chrome browsers by 2024.
Considering roughly five out of ten people use Chrome to browse the web in the U.S., many marketers are understandably worried by the oncoming change. Some marketers have even dubbed it the “cookie apocalypse.” But should marketers worry about a cookieless future? Can they take measures to cope with the oncoming developments? Before delving into these issues, let’s first explore what third-party cookies are.
Third-Party Cookies 101
First-party cookies are created and stored by the domain visited by a website user. They are only accessible to the website that created them. Typically, these cookies collect data about website visitors’ preferences. For instance, first-party cookies may store users’ language preferences so they view websites in their preferred language during every visit.
First-party cookies can also analyze users’ behaviors and provide personalized experiences. For instance, e-commerce websites often use first-party cookies to provide visitors with relevant product recommendations based on products they viewed during previous website visits.
On the other hand, third-party cookies are created by websites that are different from the websites that users visit. These cookies are stored in users’ web browsers and are accessible to both the websites users visit and the websites that created the cookies.
Typically, advertisers use third-party cookies to track people as they visit multiple websites. For instance, thanks to third-party cookies, if users visit an e-commerce website to shop for certain products, they’ll find similar ads of the products they viewed on other websites. Advertisers use third-party cookies for cross-site tracking to deliver targeted advertising.
As a result, third-party cookies are considered more intrusive than first-party cookies as they allow data to be shared across multiple websites. Furthermore, unbeknownst to the user, advertisers can use them to create detailed user profiles, considered an infringement on privacy.
These issues are particularly concerning because many people don’t understand how cookies work and don’t know how much data advertisers collect about them. For these reasons, Google plans to deprecate third-party cookies to enhance online privacy. But how will advertisers provide users with personalized experiences once Google phases out third-party cookies? If your brand or your marketing agency has largely relied on third-party data, you’re probably in a bit of a panic.
But not to worry, there are effective solutions.
A Deep Dive Into Self-Declared Data
There are two primary types of data marketers can leverage to reach audiences: self-declared data and inferred data.
Self-declared data is data website visitors provide freely through direct interaction. For instance, website visitors can give self-declared data by filling in a contact form on a website, participating in a survey, taking part in an online quiz, and so on.
Self-declared data showcases information about users based on their needs and preferences, making it an excellent way to forge meaningful connections. For instance, if website visitors take part in a survey for small business owners, they typically provide information about themselves such as email, company name, job title, etc. that businesses can leverage to send them personalized ads on a relevant topic.
On the other hand, as the name suggests, inferred data isn’t provided directly by website visitors. Instead, it’s based on information users aren’t aware of, such as the pages they visit, purchases, and so on. For instance, if users spend a lot of time on a website page about cosmetic products, an advertiser could infer that they are interested in cosmetic products and serve them related ads.
As a result, self-declared data is generally more effective than inferred data because it takes the guesswork out of determining what users want. It can allow advertisers to send personalized ads to audiences, enhance experiences and build strong relationships.
Why Self-Declared Data is Far Superior to Cookies
Advertisers and marketers have used third-party cookies for years to collect large amounts of data and invaluable insights about audiences. Yet, while third-party cookies offer several benefits, self-declared data is an excellent substitute for cookies for several reasons.
- Offers better transparency. Users control the information they divulge to marketers and how it’s used. On the other hand, third-party cookies offer little transparency. Users don’t control the information collected about them and often don’t know how it’s used. This can damage the relationship between an advertiser and users if the users feel the advertiser has misused their data. Worse still, it can result in increased bounce rates and lost revenue.
- Offers users better-personalized experiences from advertisers. For instance, advertisers can use self-declared data to serve users relevant ads based on their needs and preferences. In comparison, third-party cookies don’t allow advertisers to gather first-hand information from users. As a result, ads that rely on third-party cookies for data run the risk of being irrelevant because they’re based on assumptions.
- Enhances the browsing experience for users when used appropriately. On the other hand, third-party cookies often ruin the browsing experience on many websites. Typically, whenever users visit a website for the first time, they’ll see a pop-up window asking them to accept or decline third-party cookies. Some pop-up windows are jarring, and they may annoy many users.
- Presents no major hurdles when it’s collected. On the other hand, advertisers may struggle to collect data using third-party cookies, as many users block cookies using ad-blocking software. In fact, according to a recent Hootsuite report, nearly 4 out of 10 internet users use an ad-blocker, making third-party cookies less effective.
These are a few reasons why self-declared data is an excellent alternative to third-party cookies. Besides self-declared data, some other alternatives to third-party cookies include:
- Google’s Privacy Sandbox: The Privacy Sandbox is Google’s initiative to replace third-party cookies. First announced in August 2019, the initiative seeks to enhance people’s privacy online by providing less intrusive alternatives to third-party cookies. For instance, one of its browser algorithms, Federated Learning of Cohorts (FLoC), seeks to group users into segments, such as sports, beauty or travel, to serve targeted advertising.
- First-party cookies: Browsers aren’t going to phase out first-party cookies. As a result, they’ll become pivotal to data collection and advertising. First-party cookies gather information such as user account information, site behavior, and other analytics.
- Contextual advertising: Since Google plans to replace third-party cookies soon, contextual advertising that fell out of favor among many marketers may gain popularity again. Contextual advertising allows advertisers to place their PPC ads on websites that rank for related keywords to their ads. For instance, a marketer promoting home electronics could place PPC ads on a gadget review website.
The end of the third-party cookie is near. However, marketers and advertisers shouldn’t worry about Google phasing out third-party cookies. Sure, a cookieless world may force marketers to find new and more innovative ways to personalize messages, track user journeys and measure performance. However, self-declared data will help marketers navigate the challenges that arise once Google replaces third-party cookies.
Self-declared data will enable marketers to offer users better browsing experiences. Self-declared data will also instill confidence in users that their data is safe and allow marketers to build better relationships with users, giving them a higher chance of success with their marketing campaigns.
Contact us today if you’re interested in partnering with the right team to take on the brave new cookieless world and drive revenue.