The Cookie Monster: the demise of third-party cookies

You can barely visit a website nowadays without being bombarded by a cookie pop-up, taking over your screen, asking you to allow or deny permission for a plethora of use cases for cookie data. Although the implementation of these consent management tools is often shabby and over-complex for the end user, the rationale for doing so is extremely important to meet growing consumer expectations regarding their data.

Cookies have changed very little since their conception in the 90s, typically stored within a browser, containing information about your visit to a website. The information, however, is now used far more widely that at first, with first-party data applications spanning analytics and personalization, and third-party cookie data being used for advertising, re-targeting and profiling.

Regulations have been slow to keep up until recently, with the dawn of the privacy and consent era. Legislations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) now rule the internet roost. They have forced brands to give consumers more control over their data, along with a better awareness of how and where it is being used. From a consumer’s perspective, this is brilliant news, but for an advertiser it’s about to cause a whirlwind of trouble.

The cookie conundrum

Advertisers spend billions annually – $19.2bn in the US in 2019 to be precise – on acquiring third-party audience data and building solutions to analyze and interpret it. In theory, after the blocking of third-party cookies from Google Chrome and other internet service providers (ISPs), much of this will no longer be possible – in its current form at least.

With such a significant annual turnover, tracking alternatives are capitalizing on this opportunity to fill the void soon to be left by the demise of cookies.

What are the alternatives?

There are many – e-tags, universal IDs, fingerprinting, contextual targeting and raw data requests, to name a few. The problem though, first of all, is that many of these alternatives aren’t as precise. For example, in the case of contextual marketing, information from a website is combined with the meta data behind a piece of advertising content to pair the two and display an ad. Unfortunately, the ads are not personalized to the user as a result, and the content can only ever be as good as the meta data sat behind it.

Secondly, the alternatives are complex. Raw data requests, for example, require a server-server setup, which is a complete change of tact, meaning new ways to track, trade and measure ads need to be created and integrated into both DMPs and DSPs.

That said, these are both issues that I think advertisers can overcome with time. What they can’t predict, however, are what alternatives the technology giants will come out with. The majority of Google’s revenue in 2019 came from Google Ads. It’s not going to risk losing part of that revenue to competitor technologies that mimic the ability to profile and target consumers because of a change to cookies brought about from its own browser, Chrome.

So, what should advertisers do?

1. Be agile

   Driving a systematic test and learn approach is key to ensure a suitable alternative can be found. Advertisers need retain organizational agility while time is on their side to gain a better understanding of the alternatives to cookies and remain poised to react to changing market conditions as both new legislations and new technology solutions evolve.

2. Re-think your content

   With potentially less personalization, worse audience profiling and poorer targeting available, it’s an important time to check that your content is still working for you. Adopting a customer-centric approach, creating content with purpose to offer seamless and consistent experiences across all channels and touchpoints is important to drive loyalty and help with data collection.

3. First party, first party, first party

   Advertisers must exercise and leverage their first-party data asset. With less third-party information available for purchase, its critical brands double down on their owned data to maximize both collection opportunities and sweat the first-party asset by using it to help profile consumers.

To learn more about this topic, download and read about Capgemini’s Content Explosion offer. If you want to discuss this topic in further detail, you can get in touch with us here.

Jordan Fisher is a senior digital marketing consultant at Capgemini Invent.

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