The Death of Third-Party Cookies (What Marketers Need to Know)

---

In early 2022, Google made it clear that third-party cookies would slowly be phased out in the name of better privacy protection for web users. Originally, Google said 2023 was the end of the line. But as time went on, Google Chrome held onto them, opting to delay for the sake of developing a more sophisticated rollback. 

Years earlier, Apple’s Safari and Mozilla Firefox got rid of third-party cookies, but these platforms only represent a small portion of internet users, making Google’s move much more significant. 

With the arrival of 2024, Google’s cookie deprecation of just 1% of global cookies represents 30 million Chrome users — and the target is 100% by the end of 2024. 

The shift will end cross-site tracking and other advertising techniques that use this tracking. For brands, it will mean losing paid visibility and reach, so unprepared marketers will have to scramble for alternative marketing methods. This post covers the current state of the third-party cookie and what marketers can do about it now.

Understanding internet cookies

To understand third-party cookies, you need to first understand their place in the digital ecosystem. In general, cookies are files that collect data about internet users.

For years, web browsers have leveraged cookies to track users and save their personal information. Marketers rely on this information to improve audience segmentation, multi-touch attribution models, user experience, messaging, website analytics, and advertising campaigns.

Web browsers use two main types of cookies to collect user information: first-party cookies and third-party cookies.

What are first-party cookies?

Websites use first-party cookies to collect data on their own domain visitors. This information helps website owners understand who their visitors are and how they interact with their site. Marketers use this data to help them better connect with their target audience.

First-party cookies can also save user information for future visits. For example, the Chrome browser can save your username and password and quickly log you in next time you return to a website. Or, it can remember configurations for customizable pages you visit frequently.

First-party cookies also help inform basic website analytics, such as page sessions and user demographics. Once a user leaves the domain, first-party cookies can no longer collect their information.

“

---

For users and website owners, first-party cookies are positive tool that helps deliver a more efficient and personalized online experience.

---

TERAKEET

Third-party cookies, however, are more controversial.

What are third-party cookies?

MARKETING
TERM
DEFINITION

Third-Party Cookies

Simply put, third-party cookies are tracked by websites other than the one a user is visiting. When you visit a site, it places third-party cookies on your device to track your online activities and better target you for online advertising.

Website owners use third-party cookies to track users after they’ve left their site. Third-party cookies work by embedding a file on a user’s computer. This file collects data on the user as they move across the web.

Brand marketers use third-party cookie data to build profiles on their target consumers. They may also use this data to understand what their visitors are looking at on other websites. Ad tech companies also use third-party cookies to communicate and build larger data sets.

How exactly is user decision-making being influenced by cookies?

How do third-party cookies currently benefit brands?

Third-party cookies are the engine that drives the online advertising business model. When a user visits a website and consents to cookies, they can be tracked across the internet. In other words, brands utilize a consumer’s online history to influence them to make a purchase.

Third-party cookies aid brand marketing efforts in several ways, including:

• Retargeting: Brands use cookies to track users and serve them ads for items or pages they previously viewed.
• Personalized ad targeting: Using information collected by cookies, brands can serve users specific ads based on their browsing history and individual profile.
• Cross-site tracking: Third-party cookies can track user touchpoints after they’ve left a website. Third-party cookies can also track web users’ activities on social media networks like Facebook.
• Social media buttons: Publishers and retail sites use social media login buttons as identifiers to further track user demographics and interests.

Many brands dedicate large amounts of their marketing budgets to these strategies. When third-party cookies go away, the data marketers currently rely on will go with it.

Why are third-party cookies going away?

While valuable to marketers, third-party cookies have raised privacy concerns among internet users regarding their browsing history.

According to the Pew Research Center, 81% of U.S. adults are concerned about how companies use the data they collect about them while 67% have little to no understanding about what companies do with this data. The growing anxiety around online data privacy has prompted big tech companies and lawmakers to take action.

In response to rising privacy concerns, lawmakers have already implemented new privacy regulations. The European Union’s General Data Protection Regulation (GDPR) states users must consent to cookies when they visit a site, typically by a pop-up. These regulations ensure users don’t automatically opt in to browser cookies when they visit.

The California Consumer Privacy Act (CCPA) also protects the personal information of California residents, including information that cookies collect. Under these laws, California residents have the right to reject having their data sold to third parties, the right to request disclosure of data already collected, and the right to request any data collected be deleted.

These trends will only continue as internet users become more knowledgeable about where their information goes. Instead of waiting for the other shoe to drop, Google and other big tech companies decided to control their own destiny.

Google’s previous deadlines

Google initially announced their third-party cookie phase-out in January 2020. The total phase-out was then set to the start of 2023. The new plan is a total deprecation by the end of 2024, giving Google and other industry leaders time to plan for the change.

The delay also gives marketing teams more time to process the news and chart a new course of action. Marketers will have to reallocate their time and money to effectively connect with their audiences.

Tracking Protection and the end of third-party cookies

On Jan. 4, 2024, Google launched Tracking Protection, a feature that restricts website access to third-party cookies, effectively signaling the end of online tracking. 

As mentioned, the Q1 launch only impacted 1% of global Chrome users (30 million) selected at random. If you’re one of the selected users, Chrome will provide a notification upon launch and, in the case of any potential site errors, will allow you to turn third-party cookies back on.

Google decided to gradually phase them out to allow time to assess the impact and also give web developers time to adjust. By the end of the year, Google plans to activate Tracking Protection for all Chrome users. 

Assuming the stated time frame is realistic, that represents a monumental change for the web as we know it. The death of third-party cookies is here.

How will the death of the cookie change the advertising industry?

Marketers are left wondering how they will target the right consumers online without the data provided by third-party cookies. Many believe the loss of these cookies will have a profound impact on the future of digital advertising.

In fact, many individuals in the marketing industry have expressed concern over how they will continue to hit their goals. According to a recent survey by GetApp:

It’s true that digital marketers will be forced to find new ways to target their audiences. This may require a shift in strategies, channel investments, and marketing budgets.

In order to change with the times, the industry will need to reexamine its approach to genuinely connecting with customers. In a cookie-less world, marketers have to come up with fresh strategies to win.

What will replace third-party cookies?

So, what’s next? The good news is: you won’t have to rebuild your marketing strategy from scratch. Google has already announced its own solution — the creation of new technologies that would provide similar user insights.

Google’s Privacy Sandbox initiative

Reducing and eventually phasing out third-party cookies is a massive undertaking. As of January  2024, Chrome boasted 64.84% market share across all desktop browsers globally. All told, and with mobile users included, Chrome has over 3.2 billion users.

In response to growing concern about cookies and consumer privacy — while recognizing that cookies can’t be turned off without causing major problems for developers and brands — Google started the Privacy Sandbox initiative.

Privacy Sandbox aims to mitigate the potential shockwave of just turning cookies off by doing two things:

1. Commits to phasing out third-party cookies to protect consumer privacy as soon as alternative technology is feasible and available
2. Cuts cross-app and cross-site tracking but aims to do so without breaking the web content ecosystem or access to online conveniences

Browsers will track consumers in new ways

Google’s Privacy Sandbox proposes that all individual user data remain in the browser, rather than ad agencies and technology companies controlling and selling it. Google claims this shift would support consumer desires to control their privacy, but still allow personalized ads to reach them.

“Some ideas include new approaches to ensure that ads continue to be relevant for users, but user data shared with websites and advertisers would be minimized by anonymously aggregating user information, and keeping much more user information on-device only,” wrote Justin Schuh, Director of Chrome Engineering, in a Google blog post.

“

Google

Our goal is to create a set of standards that is more consistent with users’ expectations of privacy.

Google also proposed a new technology called the Federated Learning of Cohorts (FLoC). FloC aims to collect user data and organize it into groups rather than build out individual profiles. Google would then share those user profiles with advertising companies. This would allow Google to permit targeted ads while maintaining control over the data.

Critics of Google’s approach say the tech giant is simply finding new ways to infringe on user privacy. Some even claim Google’s approach may lead to discrimination and predatory targeting.

As we get closer to Google’s third-party cookie phase-out, the industry will continue to learn more about these technologies and debate the ethics. For now, brands and advertising agencies will want to consider what their overall strategy looks like with and without Google’s alternatives.

First-party cookies will still be used

It’s important to note that Google’s decision will not discard all cookies. First-party cookies will still collect data from website visitors. Google has also stated the importance of first-party data will grow to support the company’s Privacy Sandbox initiative.

“We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers. And we’ll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with,” wrote Temkin.

In order to get the most out of first-party data, marketers will have to consider new tactics to connect with users and earn their trust. This might mean thinking beyond e-commerce product page optimization or retargeting items from a user’s shopping cart.

Instead, brands should consider publishing relevant content throughout the conversion funnel to attract the right audience. Not only can marketers retarget users based on their actions, but they can also leverage premium content to collect contact information. For instance, you could offer a webinar or a white paper in exchange for an email and phone number.

Revival of old strategies

What’s old can be new again — and now is the time to reinvest in tried and true strategies. For example, contextual advertising is an alternative to behavioral marketing that brings relevant ads to website visitors.

Contextual advertising is the practice of inserting relevant ads into a piece of content. The strategy allows you to target websites based on similar keywords. One example might be to place furniture ads within articles about home decorating.

Contextual ads aren’t tailored to a user’s actions and personal data. Instead, they’re tailored to the content itself. These types of ads are far less jarring to privacy-conscious users. As government regulations and laws evolve, marketers will want to revisit these less-invasive advertising techniques.

How marketers can prepare now

Marketers don’t have to wait until Google officially kills third-party cookies to update their approach. The change presents a challenge and an opportunity for marketing teams that need to modernize their strategies. Those that adjust their game plan now will have an advantage over competitors that wait.

To prepare for the phase-out, teams should closely watch industry news and the discussion around current cookie alternatives. As the discussion evolves, industry leaders and tech giants will present us with new ways to reach consumers.

Marketers should also consider what channels are providing the best overall return on investment (ROI). Are your digital advertising dollars truly driving the most value?

Look beyond the advertising channel

As the end of third-party cookies approaches, digital marketers must rethink their budgets rather than seek workarounds.

A recent report by Terakeet also shines a light on the lack of long-term value in online advertising. The report details how millions in advertising dollars are currently being lost to fraud and inadvertent clicks. When the information from third-party cookies goes away, marketers will also lose transparency into the performance of these ads.

The marketer’s alternative to third-party cookies

To remain at the forefront of competition, marketers should consider reprioritizing their marketing spend toward more sustainable, long-lasting solutions. This means prioritizing owned brand assets, turning them into performance channels to build equity, and making authentic connections that matter.

Investing in owned assets creates avenues for direct, brand-to-consumer connections that work across channels. Digital ads live in one place, but assets can be everywhere, including organic search. The organic search channel offers a superior return on investment (ROI) and greater compounding value than paid media. By analyzing search data, marketers can understand exactly what consumers are asking for and connect with them early on.

With third-party cookies vanishing, brands need to start moving to search data and consumer intent analysis to keep the connection going. Marketers that diversify their strategy now can begin to see results far before the competition does. As the privacy revolution continues and lawmakers step in, brands and individuals that stop relying on invasive advertisements will reap the long-term benefits.

Start with owned asset optimization now, and you can work toward mitigating the major impact such a sweeping change will have on brand marketing. Begin here: