Chocolate chip. Macadamia nut. Shortbread. Most of us can agree that cookies are good for the soul. But today, we’re not talking about grandma’s decadent sweet treats. We’re talking about the cookies that store data and help marketers serve users with relevant digital advertisements.
Why is it important to talk about cookies now? Well, it’s because Google announced that it will join the other Browsers (Chrome, Mozilla Firefox, and Apple Safari) in eliminating third-party cookies and will completely phase them out by 2022. With this move, it’s essential for B2B marketers to begin reassessing and restructuring their digital advertising programs.
Third-Party Cookies…What Are They Again?
Cookies play a fundamental part in digital ads by identifying online users and personalizing the ads they see based on their browsing experience. Essentially, two types of cookies are at play when tracking users.
- First-party cookies are stored and created by a website that is directly visited by a user. It allows website owners to collect analytics data, remember preferences, and provide a personalized experience.
- Third-party cookies are created by domains other than the website a user is directly visiting. They are typically used for online advertising purposes, and their data helps marketers learn about a user’s online behavior such as recent purchases, frequently visited websites, and other online interests. For most B2B companies, targeted ads are the bread and butter for their digital advertising efforts. According to a study by Epsilon, about 80% of marketers rely on third-party cookies for their digital advertising efforts.
Google’s Cookie Phase-Out
In 2019, Google launched its “Privacy Sandbox” initiative as a way to move toward a more privacy-first web experience for users. Shortly after, they announced that they would end their support for third-party cookies on their Chrome browser by 2022. Safari and Firefox were the first to block third-party cookies, so Google’s announcement was the final nail in the coffin. This is especially true since Chrome makes up close to a 70% share of the browser market and handles more than half of the global web traffic.
With privacy being a top concern, it was important for Google to listen to users’ demand for more privacy, choice, and control over the way their data was being used. However, the decision to do away with third-party cookies doesn’t come without its fair share of drawbacks in the marketing world. A study by Google showed that the average publisher revenue in a world without third-party cookies would decrease by 52% for the top 500 global publishers.
Examples of Using Third-Party Cookies
Here are the most common ways marketers are using them in digital advertising:
Ad retargeting – Let’s say someone visits a specific product page on your website, but after a little bit of thought, decides not to do anything and exits your website. If you have retargeting efforts in place, you can serve up to that same user a display or text ad for the product or service from the web page they previously visited. Since retargeting campaigns are solely behavioral, they are heavily dependent on third-party data.
Frequency capping – While your ads should aim to reach new audiences, you don’t want to overdo it. You also don’t want to serve up an ad for a product or service a customer may already have. That’s when frequency capping comes in to help. Marketers can manage the number of times an ad is shown using a user ID that is currently only available via a third-party cookie.
Audience extension – When setting up an ad, you have to designate who you want to target. During this process, you may choose to target anyone who visits your website, but you may also want to reach audiences beyond that. By enabling audience extensions, you can reach look-alike audiences based on the similar behaviors of those who are your primary target. Since audience extension is based on tracking a user’s browsing activity, third-party cookies are deeply involved in this process.
Attribution modeling – Marketers need to be able to measure the impact digital media has on sales. Since third-party cookies help to identify and follow users across different platforms, multi-touch attribution models will become less reliable once third-party cookies are phased out.
Why Third-Party Cookies Worked
Marketers favored third-party cookies because they were convenient, behavioral, and profitable. Not only did marketers find them easy to implement, but they were also easy to manage since the cookies essentially did the grunt work for them. Taking advantage of third-party cookies gave B2B marketers big wins since their behavioral data made it easy to re-engage with prospects and customers (i.e. retargeting). In fact, B2B retargeting outperforms B2C by a staggering 402% for conversions per impression according to Retargeter.
Although online users don’t necessarily enjoy being followed around online, third-party cookies helped keep their ad experiences relevant. Forrester reports that 68% of B2B buyers prefer to do their research online, and 60% prefer to not interact with a sales rep. Third-party cookies helped keep potential customers engaged and allowed them to maintain control over their buying process without intervention from sales reps.
The Problem with Third-Party Cookies
They cause privacy issues. The number one problem with third-party cookies is that they silently track personal data from users. While users can regularly clear cookie data from their browsers, they have little control over who is collecting their information, where it’s going, or how it will be used. This situation doesn’t sit well with both consumers and B2B buyers as they have no control over the vast amount of personal browsing activities these cookies and the companies that use them can collect, use, and sell at will.
They’re device-based. Both first-party and third-party cookie identifiers are device-specific and associated with a single browser. That means that they cannot provide a reliable way to map an individual’s user experience with multiple devices or distinguish multiple individuals that may share a browser. This can create a challenge when trying to accurately target the right individual and when measuring frequency, reach, and campaign effectiveness.
They’re easily blocked. In a world where advertisements are literally everywhere, consumers have increasingly begun to use adblocker extensions to help keep ads at a minimum and prevent companies from following them around online. According to Statista, there were 763.5 million AdBlock users worldwide by the last quarter of 2019. With those numbers, the benefits of third-party cookies have already decreased.
So, What Now?
Although third-party cookies are phasing out, that doesn’t mean it’s the end of personalized ads and one-to-one marketing tactics. If you currently rely on third-party data for your advertising strategies, there are a few alternatives you can implement now.
- Identify ways you can better leverage your first-party data.
Don’t underestimate the power of first-party data. While users may be hesitant to give you their life story with one simple form fill, there are many ways you can slowly begin to build your database up with detailed information about your customers. A few tactics may include coming up with creative ways to ask users to register on your site, incorporating progressive profiling, collecting data via event-based tracking, or uncovering data that may be hiding in your call center. By facilitating valuable exchanges with your users, you can collect and use first-party data that your users know they consented to provide.
- Use people-based targeting.
Today’s users are more mobile than ever, but this makes cross-device tracking difficult when you only rely on cookies. However, with people-based targeting, marketers rely on a unique identifier to recognize a user rather than the device they are using. People-based targeting is growing in popularity and helping to create more meaningful connections with users. In a recent study, 90% of marketers saw an increase in performance when they used people-based targeting rather than cookie-based campaigns.
- Use contextual advertising.
Although contextual advertising might be an age-old concept, you should rethink how it can support your post-third-party cookie advertising plan. Contextual advertising is the method of placing your ads next to relevant non-ad content on the screen. It’s the equivalent of seeing an ad for computers on a technology publication website. This approach is far less creepy and more relevant to users than cookie-based behavioral retargeting. Not only is this method easier and more affordable to implement, but it is also not constrained by privacy legislation the way that cookies are.
- Amp up content syndication.
One of the best ways you can improve your growth strategies is to show yourself as a prominent thought leader in your industry. Content syndication is paying to get your information (an article, infographic, survey, etc) published on third-party sites to reach very targeted audiences. While this method doesn’t involve your products popping up as display ads, it can drive 3 key objectives: increase brand authority, improve lead generation, and boost traffic to your site.
- Stay up to date on the latest news and strategies related to cookies.
Many tech industry leaders, including Google, are currently launching experiments to uncover the next big alternative to third-party cookies. There are several approaches floating around such as Federated Learning of Cohorts (FLoC) and TURTLEDOVE (Two Uncorrelated Requests, Then Locally-Executed Decision On Victory), but nothing has officially been declared the new standard alternative as yet. So, keep a close eye on new tools and tactics that the industry is developing to replace the effectiveness of third-party cookies.
Need additional help preparing for a future without third-party cookies? Our team of media specialists can ensure you don’t miss a beat.