The long-expected crumbling of third-party cookies has begun. Google’s shift away from third-party cookies is a key moment in digital advertising’s ongoing move towards more privacy. This isn’t a new trend; more than half the browsers in use in the U.S., like Safari and Firefox, abandoned third-party cookies years ago.

The evolving digital privacy scenario is becoming more intricate due to the rise of state regulations; soon, 42% of the U.S. population will fall under the purview of various regulations in states such as CA, CO, CT, FL, IA, IN, MO, TN, TX, UT, and VA. These regulations, which limit data collection and usage, introduce an additional layer of complexity to the landscape.

In this post, we cover everything you need to know about how cookies work, how they impact advertisers, and how you should approach a cookieless world.

Note: This post was originally published on January 11, 2021 and has been updated for freshness, accuracy, and comprehensiveness. We will continue to monitor this developing story and inform our readers.

What Is a Cookie?

A cookie is a small text file in the browser that websites can write to, specific to a device (sometimes referenced as the user). Cookies have been around since 1994 with the initial goal of improving the e-commerce experience.

What Is a First Party Cookie vs a Third Party Cookie?

First-party cookies are created, published, and controlled by the website you visit and help with things like remembering your shopping cart, items you viewed, and preferences to improve the user web experience. First-party cookies collect behavioral data to help the website owner improve their services. This type of data collection only relays data back to the owner of the web domain.

Third-party cookies are set by a third-party server (ad-tech) via a code placed on the web domain by the owner of that domain. The data collected on third-party cookies are accessible on any website that loads the third-party server’s code. Third-party cookies allow advertisers to track users across the internet (cross-site) and target advertising wherever that user goes.

Pro-tip: Cookies sometimes get mixed up with other nomenclatures such as pixels, tags, and scripts, but it’s important to understand that they are not the same thing. 

How Do Cookies in Ecommerce Work?

Cookies have evolved in a third-party context; many companies use cookies from websites to track user activity for advertisers to use targeted ads. 

Today, many digital marketing capabilities are powered by cookies. We use them to track website visitors, improve the user experience, create personalized onsite experiences, and collect data to help target ads to the right audiences. We also use cookies placed by advertisers to better understand users when they are not on our website; this is the part that’s going away.

Advertisers use third-party cookie data to learn about a visitor’s overall online behavior. Without third-party cookies we lose the ability to understand what websites a user frequently visits, what purchases they make or interests they have shown on other websites.

Marketers should be prepared that attribution, measurement, frequency capping and suppression, insights, segmentation, activation and retargeting are in for a shake-up.

Privacy-first web browsers such as Firefox, Safari & Brave already block third-party cookies. This upcoming change will be the final shoe to drop that will kill the cookie as we know it.

In a blog titled “Building a more private web,” Google announced that its Privacy Sandbox and other privacy initiatives will gradually make third-party cookies “obsolete.”

“After initial dialogue with the web community, we are confident that with continued iteration and feedback, privacy-preserving and open-standard mechanisms like the Privacy Sandbox can sustain a healthy, ad-supported web in a way that will render third-party cookies obsolete,” writes Justin Schuh, Director of Chrome Engineering.

Why Are Cookies Going Away?

Cookies power all the ways we track, target, and measure performance in digital advertising. Cookies track users silently. As an industry, we didn’t do a great job of educating users how and why we use cookies. And we didn’t give people a way to opt out.

As a consumer, you have little control over who is collecting this information or where it is going—you are able to clear cookies from your own browser, but you’ll never be able to manage or delete servers holding third-party data that has already been gathered.

In response to the perceived lack of transparency and control for individuals, data breaches, and “creepiness” in advertising, privacy legislation from the EU and California now give users control over their data. Effectively, these policies give users the ability to block various tracking technologies or request the deletion of their data. Tech companies have also responded by giving users control of how their data is used both within browsers and devices. 

What is Google’s Privacy Sandbox Initiative?

The Privacy Sandbox, led by Google, is an industry initiative aimed at enhancing online privacy while preserving key advertising aspects like interest-based advertising, targeting, reporting, measurement, remarketing, and custom audiences. Companies can still grow and reach their audience effectively on Chrome without tracking individuals across the web.

Here’s a simplified view of how Privacy Sandbox will function in the future ad tech landscape:

Browsing Interests vs. Individual Tracking: Instead of tracking individual web activities, the browser will share general topics of interest based on site visits, maintaining privacy.

On-Device Data vs. External Collection: Personal data will be processed on the user’s own device, rather than being collected by companies, enhancing privacy.

Anonymous Measurement vs. Identity-Revealing Metrics: Instead of measuring how people respond to ads in a way that could reveal their identity, individuals can be kept anonymous by limiting how much data can be shared about them.

Since 2020, Tinuiti has been committed to ensuring that our partnered ad tech platforms align with Privacy Sandbox integrations, allowing our clients to seamlessly keep pace with the evolving digital advertising landscape. Tinuiti is equipped to guide marketing strategies in this new, more private web environment.

Other browsers, including Apple’s Safari, Brave, Firefox and Microsoft Edge, have pushed to cut tracking for the last few years. On iOS, all web browsers, including third-party ones like Google Chrome and Mozilla Firefox, are required to build upon the same WebKit browser engine as Apple’s Safari browser, further limiting third-party tracking on iOS. Combined, these alternative browsers represent nearly 51% of the browsers that access the web in the U.S. today. Combined with other privacy technology, like ad blockers and iOS privacy-enhancing technologies, we’re missing nearly 70% of third-party signals online today.

Next Steps for Marketers in a Cookieless World

Tinuiti offers strategic services to assist clients in navigating the privacy-by-default future, ensuring they are well-equipped to adapt through effective marketing strategies.

Let’s explore several ways in which Tinuiti is currently providing support to its clients:

Transition to Google Analytics 4 (GA4): We guide the implementation of GA4 for its advanced tracking and analytical capabilities, ensuring our clients leverage its full potential.

First-Party Data Prioritization: We assist in employing strategies like Google’s Customer Match, GA4 Audiences and other first-party data strategies to maintain effective targeting, segmentation, activation and personalization.

Server-Side Tracking Emphasis: Our team specializes in deploying robust server-side tracking mechanisms, to offset the diminishing utility of third-party cookies. We also highly recommend deploying Google’s Enhanced Conversions as a durable solution.

Proactive Measures and Training: We are also actively involved in workstreams and training initiatives to stay abreast of these changes. 

Experts Takeaways:

Despite the initial concerns surrounding the end of cookies, Tinuiti’s experts anticipate a limited immediate impact but emphasize the need for proactive adoption.

It’s important to note that the initial phase of Google’s update, targeting 1% of Chrome global users in Q1 2024, has a minimal impact on US internet users. This represents less than 0.5% of the US internet population, given Chrome’s less than 50% market share. As mentioned before, most other browsers have already done away with third party cookies and tracking. Globally, this equates to about 30 million users, with around 1.5 million in the US. Therefore, we do not foresee any immediate significant performance issues or changes for our client base. 

Tinuiti has actively adapted to the evolving digital landscape, responding to changes by major tech companies and regulations. We’ve implemented or recommended privacy-compliant audience and targeting methods, minimizing disruption for our clients’ campaigns. 

For more information on how to navigate the changes with third-party cookies and tracking, contact us. 

This article was a collaborative effort, with contributions from Nirish Parsad, Practice Lead, Emerging Tech, at Tinuiti, Kolin Kleveno, SVP, Partnerships at Tinuiti, Aaron Levy, Head of Paid Search, at Tinuiti, Josh Brisco, GVP, Acquisition Media at Tinuiti, and Michael Ward, Director of Growth Media, at Tinuiti.