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May 22, 2019

What to Know About Chrome's Decrease in Cookies

Google Chrome now allows users to opt out of third-party cookies, hastening the demise of an ad-targeting solution that never targeted ads well anyway.

Jonathan Crowl

Earlier this month at its I/O conference, Google announced new plans to overhaul cookie controls in its Chrome browser, limiting the use of third-party cookies as a tracking and targeting tool. While users were previously able to block all cookies when using a web browser, the change now allows users to specifically block third-party cookies used to track activity and deliver targeted ads. First-party cookies used for authentication purposes, such as when users log in to their banking or retail shopping accounts, will be unaffected.

The move follows similar actions taken earlier this year by Safari, and together they represent a meaningful shift in the use of cookies as a marketing tool—especially in the United States, where about 80 percent of the browser market share is held by Chrome and Safari. After a recent wave of consumer-friendly data privacy legislation including both GDPR and the CCPA, Google’s new treatment of third-party cookies is both a win for consumer privacy and a change to the status quo for digital advertisers.

How Digital Advertising Will Be Affected

First, it’s important to understand that there are many types of cookies used online, including first-party, session, and secure cookies. Google’s new browser changes only affect third-party cookies, which are used to track an individual’s activity across different websites. Advertisers use third-party cookies to build a profile of your behavior and target you with relevant ads based on that activity.

The profiles that come from this type of cookie are the kind of third-party data that new legislative efforts are making a top priority. Consumers are often unaware of the extent to which these cookies are tracking their activity, and they suffer from a lack of transparency in understanding how cooking tracking has informed the ads displayed to them online.

Advertisers use third-party cookies all the time to target their campaigns to a specific user base. With the availability of these cookies constricted by Google’s browser changes, the user profiles created by those cookies will feature less information and be less accurate as a result. Advertisers who lean heavily on cookies for targeting will likely need to change their strategy or risk seeing the ROI of those campaigns drop.

But this forced change isn’t necessarily a bad thing. Even when third-party cookies could be freely use to target consumers, they also brought clear disadvantages to digital ad campaigns.

Why This Change Was Years in the Making

Google’s announced changes may be a rude wake-up call for some businesses, but it’s not pushing the ad industry into new, unfamiliar territory. In reality, the industry has been moving away from cookies for the last three to five years, as fraudulent practices, poor targeting, and limited ROI drove businesses away from cookie-based targeting and toward more reliable targeting solutions.

As Digiday points out, third-party cookies have been used in fraudulent advertising practices such as cookie bombing, which exploits last-touch attribution tracking to overinflate the value of display ads—even when a consumer’s activity is completely unrelated to that ad. Even in cases where cookie-based targeting doesn’t resort to those unsavory practices, the user profiles created by third-party cookies are often rife with inaccuracies and distortions of a user’s activity, thus hurting a brand’s ad-targeting capabilities.

This shift away from third-party cookies in advertising has been driven primarily by two factors: the rise of mobile browsing and the rise of gateways. Compared to traditional desktop browsing, mobile and in-app browsing now constitute a large amount of web traffic that can’t be effectively tracked by cookies. In-app browsers, for example, each use their own set of cookies, so when a user is active in multiple apps on their device—or even when that user creates multiple sessions in the same app—these extra sets of cookies cause a single user to be counted as multiple different users.

For the practical purposes of targeting ads, mobile makes cookies an untenable advertising tool. Instead, businesses are turning to other, more reliable channels for user engagement.

The Marketing Benefits of Reduced Cookie Reliance

Google’s browser changes only provide extra incentive to make marketing changes that are long overdue. As consumer privacy trends point toward greater restrictions on the collection, sale, and use of third-party data, businesses are smart to start transitioning their marketing strategy to reduce and even eliminate its reliance on third-party data, including cookies.

One important step is to build out your strategy for gathering information via first-party cookies and other first-party data acquisition channels. When it comes to targeting and retargeting your content, first-party alternatives will offer more reliable information and more accurate targeting, even if your user profiles aren’t quite as deep with information as before. You’re essentially trading quantity for quality in hopes of getting better returns from your campaigns.

First-party data still faces the challenges of gaining consumer consent, but marketers are much more capable of presenting a value case for sharing that information. Remember that data is valuable, and consumers don’t like to give it away for free. Just as certain types of cookies are valued because they keep users logged in to certain online accounts, first-party cookies and other data collection vehicles can earn high participation rates from your target audience if you’re able to make a convincing pitch for sharing that data.

It remains to be seen how many consumers will choose to opt out of third-party cookies, since those participation rates largely depend on how well Google advertises this option to its general user base. But with the rise of mobile browsing and the well-documented inefficiencies of third-party cookies, marketers will be glad to put this outdated approach to user tracking behind them.

Jonathan Crowl

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Jebbit Grid Decorative
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