MARCH 19, 2020 - NEWS

Google plans on phasing out third-party cookies by 2022

What is a cookie?

We're not talking about the kind of cookie you eat. A Hypertext Transfer Protocol or website cookie is a text file placed on your computer by the websites you visit, according to a 2011 study published by Emerald Group Publishing Limited. You'll usually be asked to accept cookies when you visit a web domain.

Websites place these cookies on your browser to track who visited their site, if you clicked on an ad, to help you remember a password (if you allow it), to save your selected preferences and more.

There are multiple types of cookies. We'll focus on first-party and third-party cookies.

First-party cookies

First-party cookies are obtained directly from the company of the website you're on (or the host domain). According to the previous study, these cookies are typically encoded, which helps keep visitors' information safe. Some examples of what a first-party cookie can collect include the website user's username or which ads they clicked on.

Third-party cookies

For third-party cookies, data is collected from multiple advertising companies or from a data aggregator company (where someone can purchase your information). They can be used across different websites and in advertisements, images or scripts, according to the previous study. This means users will be tracked on their device until their cookies are cleared or expire.

Third-party cookies can collect the same information as first-party cookies, along with a website visitor's information and conversation while using a live-chat. They can also be used for social media tagging.

Google is getting rid of third-party cookies in 2022. Let's take a look at why that is.

Why is Google getting rid of third-party cookies?

While third-party cookies can help you to personalize your interaction with customers, they can also intrude on the lives of your patrons.

"Large scale blocking of cookies undermines people's privacy by encouraging opaque techniques such as fingerprinting," Chrome Engineering Director Justin Schuh wrote in a 2019 article. When someone fingerprints you, they're collecting data and building a profile about you without your permission.

Schuh continues, "With fingerprinting, developers have found ways to use tiny bits of information that vary between users. Unlike cookies, users cannot clear their fingerprint."

According to a 2020 study published by the Proceedings of the International Conference on Business Excellence, recent surveys mention that "two out of three internet users are concerned about the fact that their online behavior is used without their knowledge and consent."

"By analyzing cookie banners' design on a subset of 560 websites," authors in a European 2020 study published by IEEE stated, "we found that 236 (47%) of websites nudge the users towards acceptance by pre-selecting options, while 38 (7%) of websites do not provide any means to refuse consent."

Cookies are also hard to understand for the typical online visitor. A 2020 study published by the Proceedings of the Association for Information Science and Technology found that cookie policies don't match the "readability requirements for the average U.S. adult."

Because privacy is such a large concern for web users, Google is going to get rid of third-party cookies and replace them with an initiative called "Privacy Sandbox."

What is the Privacy Sandbox and how will it affect online advertising?

According to the Chromium Blog, Privacy Sandbox is Google's plan to make the internet more private for users without taking away from the content creation abilities for publishers. Privacy Sandbox will give browsers an application programming interface, which will allow your browser to represent you locally and act on your behalf.

This means you and your customers' private information will be protected, but your customers will still be able to click on ads and give advertisers like you information to work with. However, there still isn't a lot of information from Google on how giving your browser an API will still provide advertisers enough customer information to work with.

According to the Chromium Blog, "New technologies like Federated Learning show that it's possible for your browser to avoid revealing that you are a member of a group that likes Beyonce and sweater vests until it can be sure that group contains thousands of other people."

Right now, Privacy Sandbox is mostly Google's vision of what website privacy could look like. If you'd like to contribute to the ideas and concerns for Privacy Sandbox, you can learn more about Google's Privacy Sandbox proposals here.

According to a 2019 article by Invoca, with the phasing out of third-party cookies, advertisers may begin to focus on keyword contextual-based advertising, which means ads are related to the website you're on and what you're looking at. Or advertisers may use phone calls to find out information about their target market.

"Once third-party cookies are phased out," Sean Downey from Think from Google said, "other ad tech providers may offer a level of user identity for ad tracking across the web that Google will not, such as PII graphs based on people's email addresses."

Practical Ecommerce Senior Contributing Editor Armando Roggio sees advertisers revisiting marketing mix strategies, which means they'll be using a variety of advertising tools to generate sales.

Roggio said advertisers will also use the four Ps of marketing:

1. Product
2. Place
3. Price
4. Promotion

MainAd Chief Strategy Officer Michele Marzan said, "By approaching advertising in a people-based, data-backed manner, brands can continue to drive sales and expand their audience." Similar to Roggio's message, Marzan said you may need to relearn aspects of your business and advertisements to thrive.

In Conclusion

As third-party cookies fade away, we advise you to start thinking about and testing how you can market to your customers without them. Will you better utilize first-party cookies? Or will you use a mix of strategies to reach your goals? Perhaps when Privacy Sandbox becomes a clearer concept, you'll have a better idea of what you need to adjust for your marketing plan.

We suggest you evaluate how you're meeting your customers' privacy needs, too. If a customer feels like you're encroaching on their privacy, they may not want to continue to do business with you and your company. You could reach out to your customers directly and get their opinion on how you're doing.

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