The Cookieless Future: What Google Chrome’s Third-Party Cookie Phaseout Means for You

September 4, 2023

Samantha Samuels, Analyst and Harsvardhan Tripathy, Director of Data Science

It’s happening: Google has begun the process to phase out 3rd party cookies.

Since August 2019, Google has been working on the Privacy Sandbox Initiative, a project intended to enhance user privacy on Google browsers. In the launch announcement, Google let the world know that third-party cookies will be eventually sunset on Google Chrome.

This move has been a long time coming. Consumers have been increasingly more informed and concerned about their data privacy.

According to a recent US survey by KPMG: 86% of American adults said data privacy is a growing concern for them and 68% were concerned about the amount of data being collected by businesses.

And businesses agreed: 62% of US business leaders say their company should do more to strengthen existing data protection measures.

Public opinion has been swelling against current data collection practices. As a result, governments and companies have begun to act. In 2018, the CDPA and GDPR requiring user consent for all cookie tracking were passed in California and in the EU. Major browsers like Firefox and Safari have already stopped supporting third-party cookie tracking. Google looks to meet the moment and join them by 2024.

But marketers, analysts, and developers are concerned.

Google Chrome is by far and away the #1 browser used on the web with 64% global market share. Hundreds of valuable partner relationships are driven and enabled by cookies: familiar methods include pixel tracking, personalization modals, and perhaps most notably ad targeting and re-targeting with third-party vendors like Meta & Google. Scores of valuable data and intuitive integrations would be lost.

Luckily, Google has been working on a solution.

On July 20th, Google posted a landmark developer blog about the Privacy Sandbox Initiative. In it, Google announced the first planned production release of their API solutions intended to help companies shift away from third-party cookies and device fingerprinting. In Q1 2024, Google plans to escalate phaseout to 1% with a goal of 100% by Q3 2024. It’s more imperative than ever that companies take the reins on their data collection methods and start considering solutions.

The impact of this phaseout may sound scary, but it provides companies with a golden opportunity. Not only can companies ensure users have more privacy than ever on their sites, but they can enable more accurate, secure, and in-depth data collection than ever before. We’ll address your top questions and concerns and will provide additional suggestions to help you revolutionize your data strategy ahead of the game.

How will things change?

Cookies will no longer be tracked on sites not owned by the cookie writer. Data will no longer be retained between browsing sessions on different websites. Expect massive impact to these most common use cases: ad serving, cross-site tracking, and search re-targeting.

How will this impact my team’s data strategy?

For Marketers:

1. Expect impact on targeting precision:

    Third-party cookies are heavily used by advertisers to track user behavior and present relevant ads. Without a plan to replace them, ad targeting accuracy will decline which could result in less successful campaigns.

2. Expect to strengthen current partnerships and collaborations:

    To access pertinent and compliant user data, advertisers will likely need to work more closely with publishers, content producers, and data providers.

3. Expect impact on content personalization and recommendations:

    Third parties will no longer be able to inform personalized content suggestions via cookie tracking. Less personalized online interactions for users may affect content recommendations and user experience.

For Publishers:

1. Expect impact on monetization:

    Publishers may encounter difficulties making money from their audience data and content as advertisers lessen reliance on third-party cookies for targeting.

2. Expect to build a new strategy around data ownership and privacy:

    To maintain user confidence and adhere to privacy regulations, publishers will need to make sure that there are clear consent mechanisms and transparent data practices.

For Developers:

1. Expect new development around opt-in and transparency policies:

    Users are now asked for explicit consent before their data is collected and tracked. Expect users to have increased awareness of and ability to control their online data.

2. Expect a Digital Transformation to be in the works:

    Expect emphasis on first party data collection: To maintain personalized experiences, businesses will need to prioritize building seamless first-party data collection strategies.

    Expect investment in new technologies: The phaseout will drive investment in new technologies and solutions for identity management, audience segmentation, and targeting.

For All:

1. Expect challenges around regulation compliance:

    Advertisers and tech firms will need to make sure that their practices are compliant with changing privacy laws.

2. Expect enhanced user privacy:

    User privacy will improve by restricting third parties' ability to follow users around the web without express consent.

3. Expect an evolution in AdTech:

    The digital advertising industry will likely see enhancements and innovations in privacy-friendly targeting methods, like federated learning and cohort-based targeting. Machine-learning and AI will begin to find footing in predictive filtering, modeling, and decision-making.

What are the top ways marketers and analysts are building around these changes?

According to a 2020 Epsilon survey, most companies are:

1. Building a customer data platform (CDP),

2. Strategizing around first-party data,

3. Or building out a private ID graph.

These are all great long-term solutions to help navigate the cookieless future.

How can I begin addressing this change in the near future?

Here are just a few of our suggestions:

1. Implement server-side developer solutions like gtag.js, Tealium Eventstream, Adobe Event-Forwarding, and more.

    Begin working with your site development team to move your tagging from client-side forward solutions that rely heavily on third-party cookies like pixel tracking. Craft sustainable data strategies to jump start the transition to API & server calls.

2. Explore Google’s new API solutions.

    Google Topics, for example, is just one of the new APIs for Sandbox. Topics is aimed at building cohorts without needing to collect individual user data. Topics groups users into about ~350 unique categories and anonymizes data while powering business decisions based on your customers’ interests. Other powerful APIs include Attribution Reporting, FLEDGE, & more.

3. Start using your third-party vendors’ APIs.

    Consult with 3rd party partners to see if they have API solutions ready to plug & play. With a new server-side implementation setup, you will be able to work with your partners to implement cookieless solutions that will power tracking, ad targeting, and even more use cases.

4. Begin employing alternative targeting tactics to create audiences and cohorts, including building a first-party data forward system.

    Ask your third-party partners for defined cohorts or audiences to pull from, employ predictive AI to generate audiences, or use contextual targeting. It will be necessary to change your advertising approach to employ first-party data, i.e. information gathered directly from your websites. Invest in a first-party data forward strategy to get ahead and innovate your personalization model.

Google is not the only one pulling out of cookie-based targeting and presenting a localized based solution. In a recent blogpost, we discussed Apple making moves in data privacy and governance as well.

All these new changes represent a tidal wave in the marketing and analytics industry. The experts at Blend360 can help. Reach out to us today to start mapping a strategy for your business to get ahead of the cookieless future.

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