Third-Party Cookies: Why are They Being Removed?

Need help developing a roadmap for how you can account for this big shift away from third-party cookies? Connect with Malorieand our Media team today.

In the digital marketing realm, cookies are king. Marketers rely on these small packets of data to track website visitors, collect information on user behavior, target ads and improve the user experience.

That could all be changing soon. In 2020, in the face of new privacy regulations and increasing pressure from consumers to provide more protections for online data, Google announced that it would phase out third-party cookies on its Chrome browser by 2022. However, in June of 2021 it updated that, announcing the plan to block third-party cookies has been pushed back until late 2023. Why? Google needs more time across the ecosystem to “get it right,” giving publishers, advertisers and web developers more time to test and build alternatives that work.

The movement for greater online privacy isn’t new, and some marketers have been seeing the writing on the wall. In 2019, in a GDPR ruling, Europe’s highest court ruled that web users in the European Union must actively consent to all cookies when they visit a website. Here in the US, the California Consumer Privacy Act (CCPA), which regulates how businesses handle the personal information of California residents, went into effect at the beginning of 2020.

[Watch now: CCPA: Everything You Need to Know]

Google Chrome isn’t the first to phase out third-party cookies on its browser—Mozilla’s Firefox and Apple’s Safari have blocked them since 2013—but it’s by far the largest, accounting for more than 56% of the web browser market, according to Statista. Because of Chrome’s outsized influence on the web, some digital experts are calling Google’s move the “death of the third-party cookie.”

But is this really as dire as it sounds?

It’s important to note that while all cookies store information, they come in more than one flavor. Google’s phaseout pertains only to third-party cookies. Need a refresher? Here are the broad strokes.

First-party cookies are codes that are created and stored on a user’s computer when they visit your site. These types of cookies help website owners and marketers collect basic website analytics like page views, session length, browser type and some demographics. They also enhance the user experience by remembering usernames and passwords, for example, or remembering the items in a shopping cart—even after the visitor has left the website. Don’t worry, Google isn’t phasing out these types of cookies.

Third-party cookies are a little trickier. These are tracking codes placed on a web visitor’s computer that are generated by a website other than your own (i.e., by a third party). This means that when a user visits your site and others, the third-party cookie tracks the information and sends it back to a third party, like an advertiser. Advertisers can then use this information to learn about users’ online behaviors and interests, in turn using these insights to build visitor profiles and create retargeting lists.

There’s no question about it—the elimination of third-party cookies will have a sizeable and inconvenient impact on marketers. The digital media industry relies on third-party data to understand consumer behavior, track conversions, track cross-device use and target audiences with specific campaigns. The death of the third-party cookie threatens every marketing strategy that is built on data from third-party cookies.

However, marketers are already starting to adapt. We can’t know for certain what the ripple effect of the third-party cookie phaseout will look like, but we have a few predictions.

Understanding your customers—who they are, what they buy and why they buy it—has always been of extreme importance in marketing, but now, this will become even more of a focus. This information can help marketers align strategies and context to the appropriate message and target audience to prompt the right type of action. Since first-party cookies are less impacted by Google’s changes, we expect to see more reliance on data that can be extracted from these markers on website properties owned by brands and publishers directly.

Now is a great time for marketers to think about alternative advertising strategies that are less vulnerable to sweeping policy changes, whether they’re coming from Google or the government. Inbound marketing strategies like content marketing are a great way to reach your audience without relying on third-party cookies or super-targeted ads. If you engage and nurture your audience with helpful content they actually enjoy seeing, you’re building brand loyalty that no cookie policy can take away.

Contextual targeting is a type of personalized online advertising that uses keywords to serve PPC ads to users based on the context of the website they’re looking at. For example, if you sell shoes, your ad might show up on a fashion website. In recent years, contextual targeting has become less popular, because behavioral targeting, which uses third-party data, provided more bang for your buck. However, it may be time for contextual targeting to ride again. Combined with first-party data and strong strategy, we expect contextual targeting to deliver strong campaign performance by combining relevant messaging to users who are seeking out appropriately matched topics and information.

Google’s third-party cookie phaseout isn’t happening overnight, but 2023 will be here sooner than we think. To start, work with Dixon Schwabl on a free third-party cookie evaluation. Digital marketers need to consider their alternatives and begin building the framework for operating in this new world. A great place to start is with an evaluation to build the appropriate tracking and measurement systems now to compare the data we’re able to capture today in the third-party cookie world. Beginning to approach campaigns with a contextually based lens will help us drive learnings now that can be taken to a future without third-party cookies.

Work with Dixon Schwabl on a free third-party cookie evaluation