The End of Third-Party Cookies
By: Tom Rupp
March 30, 2023 | Digital Advertising
Chrome announced it was phasing out Third-Party cookies way back in 2019 and has since pushed the deadline several times to allow advertisers to adjust. But what does that REALLY mean for advertisers and their targeting? The Oodle team digs into first and third-party cookies and the future of targeting:
What are First-Party Cookies?
First-party cookies are created directly by the website a user visits. They are largely non-controversial and represent an agreement between the user and the site they’re visiting to enhance the experience of the user. These cookies allow the owners of the website to:
- Collect analytics about users’ behavior to make decisions that enhance the user’s experience with the site
- Remember helpful settings like language selection
- Provide other functions that enhance the user’s experience like keeping a user logged in.
Users interact with first-party cookies every day even if they don’t realize it. Amazon is a great example: when a user navigates to Amazon for the first time, Amazon.com stores a snippet of data in the user’s web browser under the amazon.com domain. When they return to the site, Amazon.com requests that snippet and loads the site with the data stored there. If a user chooses to block first-party cookies, they would need to sign in every time they visited the site and would have to purchase items one at a time because the site would not remember the items stored in their cart.
What are Third-Party Cookies?
Third-party cookies are different than first-party cookies in that they are on one domain and shared across other domains using that same tracking code. They’re used almost exclusively for online-advertising purposes to track user activity online and in turn display advertisements based on the user’s activity. These cookies are commonly used for:
- Advertising and retargeting: cookies are placed in a user’s browser when they visit a website and store information specific to their activity like what products they viewed. The cookie allows advertisers to target that user on other channels like paid search and display ads.
- Social Media: Social media sites use third-party cookies to track which sites a user logs in to or share content from and uses that information to display related ads in their social media feeds.
Why are Third-Party Cookies being phased out?
Simply put, third-party cookies are being eliminated because of a major shift to protect user privacy and data. According to Google “Users are demanding greater privacy–including transparency, choice, and control over how their data is used–and it’s clear the web ecosystem needs to evolve to meet these increasing demands.” Firefox and Safari browsers phased out third-party cookies some time ago. Google is working to transition away from them more gradually to ensure that advertisers have enough time to pivot without destroying their advertising business:
Some browsers have reacted to these concerns by blocking third-party cookies, but we believe this has unintended consequences that can negatively impact both users and the web ecosystem. By undermining the business model of many ad-supported websites, blunt approaches to cookies encourage the use of opaque techniques such as fingerprinting (an invasive workaround to replace cookies), which can actually reduce user privacy and control. We believe that we as a community can, and must, do better. (Chromium Blog)
What does it mean for my advertising?
Because Safari, Firefox, and soon Chrome will no longer support third-party data, some areas in the marketing and advertising industry may change; however, many tactics will stay virtually the same. Some important notes on the shift away from third-party cookies and its impact on advertising:
- Google, Firefox, and Safari aren’t banning all cookies: As mentioned throughout this article, third-party cookies are going away, but first-party cookies offer a powerful way for users to share information with websites and their advertisers to continue a tailored marketing experience.
- The transition is slow and measured: This transition is not a surprise to advertising providers, they have worked since 2019 (and in many cases before) to pivot their products to account for a world without third-party cookies.
- Many cookies that appear to be third-party are actually not: Just because data is passed to a third party, doesn’t mean the cookie is third-party. In many if not most cases, a cookie passing data from a website to a third party like Google Analytics is a first-party cookie because the cookie is generated on the owner’s site.
- Innovative solutions are already replacing third-party cookies: Things like contextual signals and behavioral signals from users on-site become valuable sources of targeting. Google also has established its Privacy Sandbox initiative that provides companies and advertisers with user tracking while maintaining users’ privacy online.
Worried about how to handle this transition?
If your business has relied on third-party cookies for advertising or if you’re just not sure how this will affect you, we can help! Reach out to us to set up a free consultation with Oodle and we’ll help you develop a game plan!