How Does the Google Phase Out of Third-Party Cookies Affect Advertisers?

Privacy is a big topic of conversation right now in the marketing world, and it is the driving force behind Google’s current phase out of third party cookies. Google has announced that they plan to phase out third-party cookies in Chrome by 2024, and some browsers have already begun blocking third-party cookies. For advertisers, this creates a frightening prospect: Marketing without the insight of robust user data. However, there are alternative strategies for targeting audiences and creating personalized advertisements without the use of third-party cookies. Additionally, we are likely to see the rollout of new strategies and technologies that better align with users’ privacy concerns. Continue reading for a closer look at what to expect with the phase out of third-party cookies and how you can prepare with changes to your marketing strategy.

How Cookies Are Used in Modern Advertising

Cookies are small text files used to collect and store user data. Essentially, they help websites remember different users. But more than that, they can track a user’s browsing activity to create personalized ads catered to their buying preferences. When you view a product on Amazon and suddenly begin seeing ads for that product everywhere else you go on the web, you’re seeing cookies at work.

First- vs. Third-Party Cookies

To understand the problem with cookies, it is important to know the difference between first- and third-party cookies. Only third party cookies are being phased out with Google’s upcoming changes. These are the most concerning for user privacy because they track users across multiple websites, and the data they collect is shared with various ad tech companies. Alternatively, first-party cookies are created and used on a single website domain. When an ecommerce website saves the contents of your cart, this is a first-party cookie at work.

First-party cookies are generally used to improve user experiences on a site by remembering a user’s language settings, username and password, and other site preferences. Third-party cookies, on the other hand, are used to track user activity and display advertisements based on that activity. However, first-party cookies can be leveraged for advertising campaigns.

Why Third-Party Cookies Are Being Phased Out

Google’s announcement to phase out third-party cookies is nothing new. In fact, the process has been delayed by several years, and marketers have anticipated this change for some time due to an increase in consumer privacy protection laws. For example, California’s Consumer Privacy Act of 2018 granted users more knowledge and control over the personal information businesses collect about them. Internationally, there has been legislation concerning user privacy and third-party cookies as well. Most notably, the European Union’s General Data Protection Regulation Act aims to enhance individuals’ control over their personal data, and this law has served as a model for nations around the world to develop their own consumer privacy protection laws. In fact, 65% of the world’s population is covered by data privacy laws compared to just 10% in 2020.

Pivoting Your Marketing Strategy

Interestingly, consumers still favor ad personalization, but they are simply not willing to exchange their personal privacy for that personalization. While about two-thirds of consumers say they want personalized ads, nearly half say that they are not comfortable sharing their data. Therefore, advertisers are under pressure to explore alternatives to third-party cookies to develop effective, personalized ad campaigns.

    • Implement More First-Party Data Tracking – Users have more trust in first-party cookies because they know who is collecting their data and how they’re using it. Plus, first-party cookies facilitate a more personalized browsing experience when users visit your website, so users are more willing to accept the use of these cookies. Advertisers can take advantage of first-party data collection, which still provides plentiful insight on consumer preferences and user demographics.
    • Explore Alternative Advertising Tools – To coincide with an increased reliance on first-party cookies, marketers should embrace a growing toolbox to ramp up the collection of user data. The following tools require users to opt in, which they are likely to do in exchange for incentives like exclusive deals, rewards, and product recommendations.
      • Email Marketing – The depreciation of third-party cookies will reduce the ability of advertisers to identify users on an individual level. Email marketing can facilitate enhanced conversions on websites by encouraging users to enter their email address, which allows coverage for lost conversions that would not otherwise be tracked to specific individuals.
      • Loyalty Programs – Loyalty programs are another powerful tool for collecting user data in a privacy-friendly way. By opting into a loyalty program, users may become more willing to share their preferences and personal info, which you can then leverage for more personalized, robust advertising campaigns.
    • Prioritize Conversion Rate Optimization (CRO) – Without third-party cookies, you lose the ability to follow users throughout their browsing experience, encouraging them to return to your site. Therefore, conversion rate optimization is going to become a key strategy for closing sales.
    • Utilize New Marketing Tools – To continue to reap the benefits of search and display advertising, you may need to rely on new tools that assist in ad targeting, such as Google’s Privacy Sandbox, which contains various APIs to allow ad targeting without personal identification.

Phasing out third-party cookies is a process that will have a significant impact on digital advertising, but you can give your business a leading edge by connecting with Salem Media Group. Our digital marketing agency offers agile solutions to keep up with the changing landscape of advertising on the web. Our team is constantly researching new solutions to provide effective strategies, so your business doesn’t get lost in the crowd. Contact us today to discover how we can help you surround your target audience in an ever-changing digital world.

Smiling people participate in a standup meeting in an open office
A woman makes a purchase on her laptop

Learn more or receive a free digital presence evaluation. Contact us today.