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The Loss of Third-Party Cookies is a Bigger Issue Than You Think

Published

4 years ago

May 18, 2021

The Loss of Third-Party Cookies is a Bigger Issue Than You Think

If you have a well-developed digital marketing and advertising strategy, you’ve probably already been warned about the impending death of third-party cookies. Depending on your news source, however, you will likely have one of two quite extreme views on this subject. Either, according to some, the end of third-party cookies is an apocalypse for online business, or, according to others, it’s not something we should be that worried about.

The truth, as ever, lies somewhere in between these extremes. In reality, the loss of third-party cookies is going to have a huge impact on how we perform web page tracking – more perhaps than how the GDPR affects online business. Luckily, there are also ways of mitigating this impact, and even of emerging from this crisis with a stronger company than ever before.

In this article, we’ll strip away the hype and show you how to prepare for the death of third-party cookies.

What are Third-Party Cookies?

Let’s get the basics out of the way first, so everyone is up to speed. Third-party cookies (sometimes referred to as just 3P cookies) are small files that store data about a user’s web experience across a range of websites. As explained in this step-by-step guide to webpage tracking, third-party cookies can be used by advertisers to gather personal information on website visitors that can then be used to target ads more narrowly.

Though third-party cookies are not going to be banned outright, as of next year, they will not be supported on the majority of browsers. Some browsers (such as Firefox) have long blocked these cookies, but the final nail in the coffin came in March of this year when Google made the formal announcement that its ad tools would no longer support the individual tracking of users starting next year.

Why are Third-Party Cookies Valuable?

Third-party cookies are an extremely valuable part of the infrastructure of online marketing and advertising. In fact, under the assumption that they would be around for years to come, a whole industry has grown up around tagging users with these cookies, analyzing them, and allowing ads to be targeted based on the information they contain.

Most online businesses will use third-party cookies, at least to some extent. The most common application of them is to retrieve information on a visitor to your website. Depending on which third-party cookies they are carrying, you will be able to see which websites they have recently visited, as well as a host of other valuable information relating to their preferences, demographic, and even purchasing history. Based on this information, your marketing engine can present ads that are more relevant for each visitor to your site and promote your business in a way that is well suited to your website visitors.

This practice has become very common, with a recent study by Epsilon of American marketers finding that nearly 70% of marketers say that removing third-party cookies will impact them more than even major privacy laws such as the GDPR.

How Will Losing Cookies Affect Me?

The extent to which the elimination of third-party cookies will affect you depends on the sophistication of your digital marketing system. However, in general, the deprecation of these cookies will likely have an impact in three key areas:

Analytics and attribution based on third-party cookies would not be nearly as efficient, meaning that it will be much more difficult to assess the impact of your advertising.
Since third-party cookies carry information on browsing data, it will be much more difficult for marketers who depend upon third-party cookies to use personalization in their advertising.
Some marketing systems use third-party cookies to perform basic but also essential tasks (such as frequency capping). These could be an issue for online marketers who rely upon third-party cookies, but it is likely that most martech providers will find a way around this.

On the other hand, it’s also important to remember that the death of the third-party cookie is not all bad news. Some cookies of this type have been linked to dangerous cyberattacks, for instance, and consumers are increasingly uncomfortable with how much information advertisers hold on them. The end of third-party cookies might make the web safer and more private, albeit at the cost of truly personalized advertising.

Understanding First-Party Data

The biggest impact that the loss of third-party cookies is going to have, at least for most marketers, is that we will see a marked increase in the importance of first-party data. Up until now, many marketers have relied on third-party data collected and then sourced from social media companies, app manufacturers, and survey companies.

Now, in order to keep the kind of advanced functionality you have become used to, you’ll have to collect all that information yourself. That’s why so many marketers are now making collecting first-party data a priority. According to a study conducted by eMarketer, over three quarters of marketers in both the United States and Europe indicated that boosting first-party data use is a top goal.

For those looking to build such a system, there is some bad news and good news. The bad news is that building a system that can reliably collect high-quality data from your customers can be tricky. The good news is that there are plenty of tools out there which can take the stress out of the process.

Getting Started With First-Party Data

The first step is often to decide which data are most important to you. First-party data collection is generally focused on a smaller number of data points than the kind of exhaustive information that can be collected via third-part skimming. Still, you should be able to collect:

Demography
Visited websites & interactions
Purchase history
Interests
Time spent on website

All of these data points will be specific to an individual website visitor but may not be as tightly focused as you are used to third-party data being.

First-party data have some disadvantages and some advantages over the kind of third-party data you can currently collect via other websites and platforms.

While first-party data are less detailed and can be more difficult to collect, once you have them, you have a much broader remit as to what you can do with them. As long as you collect these data in a way that aligns with the relevant data privacy legislation – the CCPA and the GDPR being the most stringent of these – you can then process, use, and even share these data as you like. In other words, you are not bound by the service agreement you have with your current third-party data suppliers.

This means that first-party data is a valuable asset for businesses, and even if 3P cookies weren’t dying, it would make good business sense to start collecting them.

Collecting First-Party Data

Collecting first-party data can seem like a real challenge for marketers who are new to the idea. It’s hard to imagine that your customers – no matter how much they love your brand – will want to share personal information with you.

That’s partially true. However, there are two ways to address this challenge. One is to make it clear that sharing these data will benefit your customers – whether this is in the form of concrete benefits such as offers or money off their next purchase, or merely in terms of increasing your ability to offer them a genuinely personalized experience.

The second key here is to make sure that the ways you are collecting data are as diverse as possible. Asking customers to enter personal information as soon as they come to your website is likely to put them off – scattering information-gathering forms throughout your site is a much better and more effective way to go about this.

There are typically four types of tools through which you can collect first-party data, and all have their place within your broader strategy:

Landing pages are pages on your site that contain information on a range of products or services. They are typically the first page a customer sees when they come to your site. Because they see high traffic, they can be a great place to collect first-party data on your customers, perhaps via a pop-up that asks for an email address in exchange for a special offer.
Website forms are a simpler tool but no less effective. With a high-quality website editor, you can scatter data collection forms throughout your site, giving customers money off a product if they share info or asking them to provide extra information during checkout, for instance. Diversify your forms, and you’ll soon see that your ability to collect data increases.
A more direct approach is to use polls and surveys. These can be conducted via your website, social media feeds, or through your email marketing. The aim here is two-fold: not only to gather feedback on how well your marketing is landing, but also to gather first-party demographic information on the audience members who are filling out the survey.

The key to collecting high-quality information, no matter which of these approaches you take, is to diversify not only the ways in which you are collecting first-party data but also the media through which these elements are delivered.

That’s why we’ve built our email marketing suite with so many options for collecting data from your potential customers. With Benchmark Email, it’s easy to add data-collection elements to your email that will not only provide you with valuable data, but also get your audience more engaged with your brand.

Prepare for the Future

If your marketing and advertising system relies on third-party cookies, at the moment, there is really only one way to prepare for their impending death: start collecting far more first-person data. In practice, this may be easier said than done.

You will need, first and foremost, to identify where you are reliant on third-party cookies and put plans in place to collect these same data directly from consumers, with their consent. That will require, in turn, creating an airtight privacy policy, and making sure that your data collection, storage, and processing systems are in line with local and federal data privacy laws.

Ultimately, you may have to give up on some of the more advanced ways in which you personalize your marketing in favor of some older techniques – carefully crafting ads that appeal to a broad section of your target audience, rather than relying on hyper-personalization as a marketing technique.

With the correct preparation, though, there is no reason why your digital marketing can’t be as successful after the death of third-party cookies as before it.

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