The Future of Cookie-Less Advertising
The Future of Cookie-Less Advertising
The cookie-free future represents an alteration in the world of technology in the wake of Google's planned phase-out of cookies from third parties in the Chrome browser, which was announced in January of 2020 (now delayed until 2023).
A huge amount of online marketing operations rely on information from third-party cookies. Much of the ad technology sector - including advertisers, publishers and marketers - are now caught in an enormous, chaotic search for viable alternatives.
Precise customer data
Alternative identification solutions based on non-cookie identifiers (such as email addresses) are a crucial element of the technology that is not Google.
But the quality and quantity of the first-party data it collects will determine the effectiveness of a company's usage of cookie replacements (for instance, alternative ID technology). As such, numerous businesses' plans are shifting towards collecting large amounts of accurate and reliable customer data.
What exactly does ‘cookieless’ mean?
‘Cookieless’ refers to a kind of marketing that relies less on third-party cookies, which are small bits of information sent between advertisers and include personal identifiers for consumers as they navigate the internet.
This profoundly impacts websites that use third-party cookies to track users and then target users with relevant ads or marketing.
In general, cookies store data regarding your computer to identify you as a unique user, by storing unique identifiers such as session IDs or registration numbers.
When cookies are removed, other identification numbers (your IP address, for example) can uniquely identify your computer and help discover more about who you are on the internet.
In April 2021, Google split from other companies in advertising by announcing that it would not gather personally identifiable information (PII) graphs from other sources of identification, such as email addresses.
In short, cookieless websites store your information using different methods, such as your device's IP address as identifiers, instead of cookies. These methods can now monitor you online.
The loss of third-party cookies could be a significant issue for marketers who rely upon analytics information (like session IDs) to personalise ads and target their audience.
Google has opted out of PII methods for collecting data as the company has designed what appears to be a safer option: Federated Learning of Cohorts (FLoC), also known as Privacy Sandbox.
Google declares that FLoC is a ‘privacy-first’ as well as an ‘interest-based’ marketing technology (AdTech).
Instead of tracking third-party cookies on users' browsing habits across the internet, Google's browser for web, Chrome, will do this for you.
Users will be put into an audience or ‘cohort’ category following their behaviour. Advertisers are then free to direct their advertisements to these unidentified cohorts instead of individuals.
Why did Google discontinue cookies?
Google's rationale for phasing out third-party cookies is that its users are demanding greater privacy, which includes transparency as well as control over how their data is utilized.
Indeed, 86% of respondents surveyed said they had increasing concerns over their private data. 78% expressed concern about the collected data volume.
However, there's a possible second aspect to Google's decision to remove third-party cookies: the data protection commission of Ireland's (DPC) probe into Google's advertising business. It's not a stretch to say that similar investigations on a national scale and the growing public concerns have created the perfect storm that Google has to deal with.
The implications of a cookie-free future
In a future that doesn’t use cookies, audience sizes will shrink until they're no longer sufficient to support media buying, resulting in low conversion rates and ineffective targeting.
That means that marketers will have to develop fresh analytics of their audience's strategies and use other marketing strategies, such as email marketing.
In addition, businesses which process and sell advertising data also need to develop methods for securing, collecting and combining audience data that don't rely on third-party cookie technology and where the DMP technology's first-party methods may be useful.
These first-party information methods are crucial to determining future steps that companies and marketers need.
First-party data strategies are vital to ensure personalised experiences throughout the customer journey, while ensuring that secure data and relevant ads are targeted.
The consensus among data experts is that the most important requirement for a reliable and up-to-date data strategy for a cookie-free future is to establish a system that can update the profiles of consumers in real-time.
Real-time systems can guarantee that consumers' consent is respected when an opt-out occurs on a particular channel.
The system keeps the data in a state that is accessible, allowing businesses to respond to the data promptly (e.g., opting into another channel or opt-in to an additional channel).
These real-time events trigger consumer profiles on a large scale and deliver seamless, customised experiences.
However, when marketers and businesses remain silent, they are at risk of applying last-minute solutions that can result in information silos.
From here, this could result in irrelevant and unintentional targeted ads which could be exposed to the threat of being fined or having negative returns on investment (ROI).
Are cookies going to disappear?
There's a bright side that with a greater focus on gathering data from the first party, companies and marketers will be more likely to design specifically targeted and targeted marketing campaigns that will yield an excellent return on investment.
While the loss of third-party cookies collected on the internet could make it more difficult to determine who is the user or groups of people, contextual advertising and cohorts can fill in the gaps and ensure that the right message is being delivered to the right people.
Seeking innovative ways to drive more traffic to your website? Contact the experts at EWM today.