The development of a privacy-first internet is underway with its users and their needs in focus. In early 2020, the world-renowned multinational technology company Google announced its plans to eliminate third-party cookies by 2023 to protect users who were asking for more privacy online. And as the end of third-party cookies is rapidly approaching, marketers and businesses are forced to think of creative and innovative ways to continue to gain their insights. So, why is it that despite third-party cookies efforts in being phased out and online users demanding more privacy, will the internet never completely be free from it?

Third-Party Cookies

But first, what is a third-party cookie? A third-party cookie is often described as a cookie that is created by domains differently from a website domain directly visited by the user, and saved on the user´s computer to track information about them, i.e. their login information or shopping cart history, and is in general used for online tracking purposes (Dao & Fukuda, 2021). In other words, cookies allow servers to identify users and remember things about them. The concept “Cookies” stems from 23-year-old Lou Montulli back in 1994 when he was an engineer at Netscape trying to solve a pressing problem making websites remember who their users were or what they had done in previous visits (Quartz, n.d.). The intent behind cookies was pure, however, almost immediately, advertisers and marketers realized, learned, and found ways to utilize cookies in their efforts to track users online and increase market shares. Cookies are an effective way for digital advertisers and marketers to learn about web visitors and their overall online behaviors, such as their visitation frequency, purchase history, and interests in various other websites (HubSpot, 2021). And with this detailed data plan, organize and build targeted content and ads for their users.

Cookies are distinguished into two categories; third-party and first-party cookies. Whilst third-party cookies are generated and placed on the website’s user´s device by a separate and different company than the one the user is visiting, first-party cookies are usually generated and placed on the user´s device by the website that the user is visiting (Cookieyes, 2022). First-party cookies are often referred to as the “harmless cookie” due to their characteristics of simply identifying returning visitors so that they do not have to use the username and password to log in on successive visits (Cookieyes, 2022).

Why Are Third-Party Cookies Being Phased Out?

The phaseout is a result of users expressing concern regarding their privacy online, and the demand for transparency, choice, and control over how their data is used. As users, we spend countless hours each day online, and the amount of information available on every user is infinite. The power companies hold in today’s market is immense compared to previous years. Consumers are becoming increasingly more aware of their surroundings and their rights as users, and therefore, sparked an objection to change the web ecosystem to meet and evolve the needs and demands of its users. 

Google Chrome is not the first browser to phase out the third-party cookie, however, it is the biggest (HubSpot, 2021). As early as 2013 did Firefox and Safari take the plunge to ban third-party cookies from their browser, but as data from Statista shows Chrome stands for more than 56% of the web’s total browser market. Due to Chrome accounting for more than half of all global web traffic, Safari at 11%, and Firefox at 3.15%, shows that 70,15% of the total global web traffic will be “free” from third-party cookies in the future. Case in point there has been a significant demand for increased privacy amongst users.

Source: Statista

Exclusive Data Provided by HubSpot and GetApp Discovered That…

  • 41% of marketers believe their biggest challenge will be their inability to track the right data (HubSpot, 2021).
  • 44% of marketers predict a need to increase their spending by 5% to 25% in order to reach the same goals as 2021 (HubSpot, 2021).
  • 23% of marketing experts plan on investing in email marketing software due to Google´s new policy (HubSpot, 2021).

Alternative Targeting Solutions to Third-party Cookies

As previously mentioned, cookies will never completely disappear due to its clear significance within the marketing and advertising fields. The deprecation of third-party cookies set for 2023 has made marketers think of innovative and creative ways for alternative data targeting solutions, and it is believed that there are three new major plans for how the industry will resume to utilize the benefits of third-party cookies without the use of third-party cookies.

Googles Federated Learning Cohorts (FLoC) model:

Google began testing a new technology March 2021 called the FLoC model as a replacement for third-party cookies. The browser tracks users and groups them into cohorts alongside thousands of peers with similar online habits for the purpose of interest-based advertising (Quartz, n.d.). The FloC model informs the site of which cohort users belong to, and based on this information helps advertisers tailor ads to people with similar interests.

First-party data tracking:

Before third-party cookies, there was first-party data tracking which in essence is data about a company´s customers that is collected and owned by that company (Signal, n.d.) The collected customer information is compiled through software and systems that the company itself owns (Signal, n.d.), and from there the data is used to create content, ads, personalized experiences etc. Effectively each company whether it be marketers, advertisers or publishers each collect their own data about their customers respectively.   

Identity-based tracking:

The last alternative data tracking solution is that all web users would be assigned an advertising ID that would allow advertisers to track and collect data every time a user uses a website. Much like third-party cookies, advertisers and marketers will be able to gain insight in user´s browsing habits, and create targeted content and ads based on users advertising ID´s.

Four Quick Key Takeaways from the Phase-Out

  1. Google is not banning all cookies.
  2. Google will not stop data tracking users entirely.
  3. Professionals saw the cookie phase-out coming.
  4. The phase-out will encourage creative and innovative thinking to future data collection.

To Conclude…

Initially there are several challenges and disadvantages with the removal of third-party cookies. The importance and benefits sought from using this tool has over the last few years grown immensely, and nearly every website owner uses cookies in the twenty-first century.  The phaseout is met with heaps of resistance from business owners, however, this development is a reaction to users concern and want for increased online privacy. The evolving ecosystem that is the internet will never be free from third-party cookies as it has become a fundamental part of how the web works, however modifications are being made to meet and satisfy the users demand for privacy.

“Cookies are just a fundamental part of how the Web works, about as essential as Wi-Fi, HTML, or electricity. All cookies do is recognize your computer as it travels between Web pages – so you need them for critical things like logging into a website, or buying something from a store.”  Silktide founder, Oliver Emberton.

If you enjoyed this and want to learn more about third-party cookies and its ban, you should check out “The Third-Party Cookie Ban: Unlocking The Secrets of First-Party Data with Ann Handley” podcast available on Spotify, or “What are Third Party Cookies, How do They Work?” podcast also available on Spotify.