In 2020 Google announced it will join Apple and Mozilla in phasing out third-party cookies in its web browser by 2022. Between them all, Google Chrome (64%), Apple Safari (19%), and Mozilla Firefox (4%) take up 87% of the global browser market.
This means that third-party cookies – which have driven the online advertising economy for the past two decades – will soon be consigned to internet history. Although it is still unclear what will follow in their tracks, we can be sure that the world’s biggest tech companies will invest heavily to secure a reliable alternative.
As of mid-March, Apple and Mozilla have already implemented their cookie clampdown, but Google has given itself until 2022 to make the gradual transition. Without doubt, this will lead to a radical overhaul of the online economy that will impact all marketers.
Let Us analyze the following:
What are cookies?
Cookies are text files with small pieces of data — like a username and password — that are used to identify your computer as you use a computer network. Specific cookies known as HTTP cookies are used to identify specific users and improve your web browsing experience. Data stored in a cookie is created by the server upon your connection. This data is labeled with an ID unique to you and your computer. When the cookie is exchanged between your computer and the network server, the server reads the ID and knows what information to specifically serve to you.
There are many distinct types of cookie. The two most important types are first-party and third-party cookies.
- First-party cookies: are stored by websites. They enable these websites to remember a user’s settings and they can significantly improve the user experience. These cookies are not targeted by the recent and upcoming changes.
- Third-party cookies are created and stored by external sites, and not by the site the user is visiting. They can track the user as they move across domains and retarget them with personalized messaging.
Future of cookies:
The end of third-party cookies won’t leave a vacuum for advertisers. Platform companies large and small are working on new technologies and business models to support digital advertising that’s more sensitive to privacy concerns. It’s too soon to tell which will dominate, but it’s obvious that marketing and sales options will multiply. Platform giants that currently focus on advertising (such as social media companies) will offer more sales channels. Those centered more on sales (such as digital retailers) will offer more advertising. Smaller platforms (such as those used for video conferences, doctors’ appointments, or online learning) will get in the game, too, with more sales and advertising options. Omnichannel marketing will have far more channels than ever before.
We might also see a wave of business failures. Today, some companies might be entirely dependent on third-party cookies to understand their clients or customers and make sales. Those that don’t adapt will fall further behind. Many won’t survive.
The endgame is a new competitive landscape: giants that are more gigantic, more business failures, and a host of new digital channels you can use to reach consumers.
There is no need for marketers to panic about these ongoing changes. All the above stems from a customer-centric view of how the online world should operate. If marketers keep this in mind and focus on maintaining customer privacy, future regulations will offer little concern. That shift in emphasis will not remove the pressure to deliver results, of course. But as an industry, we all need to move on from an economic model that requires invasive tracking to deliver those results.