Is this the end of targeted digital advertising?

Does the death of 3rd party cookies spell the death of online advertising as we know it?

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The future is looking pretty bleak for 3rd party cookies.

This isn’t news, as the most popular web browsers have been clamping down on them for some time. Apple introduced Intelligent Tracking Prevention (ITP) on the Safari browser back in 2017, the Firefox browser recently introduced cookie blocking and Google announced, back in early 2020, that it would make 3rd party cookies obsolete in the Chrome browser.

These three browsers account for the vast majority of the overall market share, so they have effectively killed off the use of 3rd party cookies. This does have consequences for online marketing.

The whole ‘what on earth am I going to do about our advertising campaigns’ panic reared its head again with Google’s recent announcement that it has no plans to develop an alternative. In that announcement, they bang the privacy drum and claim:

People shouldn’t have to accept being tracked across the web

It actually isn’t as drastic as it sounds as they put that in the context of being able to get ‘the benefits of relevant advertising’. Advertising serves as the economic foundation for the internet and it is logical to feel that, if you are going to be subjected to ads, it would be a better experience to see relevant / interesting ones.

But, it can feel creepy and the current obsession with privacy does not sit well with being shown endless ads of those shoes that you didn’t buy. Google, in particular, is eager to be seen as a ‘privacy-first’ organisation and is definitely bowing to public / political pressure regarding the use of personal data.

What is the difference between first party and third party cookies?

Although very similar in terms of technical specification and functions, there is a crucial difference between first and third party cookies.

First party cookies are used by a website for monitoring activity on that specific website. This is generally to help improve the user experience, e.g. maintaining a shopping cart or remembering settings such as a language selection when using the site.

Third party cookies allow behaviour to be tracked on other websites. This data can then be used to create user profiles, based on the sites visited and other online behaviours. These profiles can then be used to permit highly targeted online advertising campaigns.

The knives are only out for third party cookies. There is no indication that there are any plans to kill off cookies entirely, as the user experience is improved through the use of first party cookies.

How can I target users across the internet without third party cookies?

There are actually alternatives to a cookie based targeting engine, e.g. Universal IDs / Device Fingerprinting / DigiTrust / etc. They all try to permit user based targeting. In many cases, they are actually better than cookies, as cookies typically identify a device, rather than individual user, so can be limited.

To be honest, it is too early to call which of these emerging technologies may win the race, but I think Google’s recent announcement about not developing an alternative to cookies could be a little ominous.

I get the impression that Google wants to appear to be whiter than white and suspect that the Chrome browser will be on a constant war footing to combat technology that threatens its commitment to privacy. This is important when you factor in the fact that Chrome is the world’s most popular web browser, used by over 60% of web users.

Isn’t Google shooting itself in the foot?

The commitment to privacy will come at a cost to Google, as it obviously monetises the 3rd party cookie data that currently drives a lot of its own advertising revenue.

It is, however, important to remember that first party cookies are going nowhere so Google will still be building a competitive advantage by analysing user behaviour on its own properties, chiefly search and YouTube. The death of the third party cookie is much more of a threat to other AdTech vendors as they simply do not have the online real estate to benefit from first party cookies.

Google is also launching initiatives such as Federated Learning of Cohorts (FLoC), which will leverage the advantage I outlined above to enable the search giant to sell highly targeted advertising. It may not be as granular as individual targeting, but you can bet your last dollar that it will be a powerful engine.

What does this mean for advertisers?

In simple terms, any online marketing that you currently do that relies on third party cookies is sailing into troubled waters. There is no beating around the bush on that front. Yes, there are alternatives out there but there is no guarantee that they will work in the long term as it feels inevitable that legislation is coming to ‘protect’ the individual user.

I do believe that Google will introduce new solutions that will allow you to continue to create highly targeted advertising. There are already solutions such as FLEDGE and TURTLEDOVE, as mentioned in this thread:

As far as I can tell, using just first party cookies will still allow remarketing lists for search ads (RLSA) as Google will know which sites you have visited from its search results pages. So you should still be able target users who have been on your site, but only on Google’s own web properties.

I believe that FLoC will be powerful and will allow you to advertise to very well defined groups. No doubt at a cost, so Google will be winner and build on its dominance. As you

This rise of contextual advertising?

I also expect to see a renaissance in contextual advertising. Advertising can be sold on relevance to the content of any given web page rather than targeting individual users. This will put an end to those pesky shoe adverts you are bombarded with when reading a news article but would allow ads to be shown that are relevant to that news article.

Contextual advertising is not new and it seems very logical to show ads that relate to the content of a web page, but the hunger to target individual users has resulted in a staggeringly personalised ad serving environment. I expect this to shift to an interest / theme based approach.

It is also likely that advertisers will offer to work more closely with publishers in order to benefit from their first party cookies. I expect that we will see a dramatic increase in web publishers using their own ad solutions, but dread the fragmentation that this will create.

So, it isn’t panic stations?

I confess that I am (slightly) dreading the loss of those retargeting campaigns that currently perform really well, but it is what it is and there is no point in panicing. There will be emerging solutions that allow you to target users and I have no doubt that the targeting will be very granular.

Certainly one to watch and we may well see ROAS being challenged, but I do not think it is panic stations. There remain plenty of options to get your brand out there. Paid search is still always going to outperform display advertising and the money you save on your remarketing campaigns can be invested in your organic profile :-)

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