Google Pivots on Cookie Deprecation

What we know now and have known for years: Consumers want privacy, and the third-party cookie marketplace, which has powered advertising ecosystems and enabled open and free web, is no longer sustainable in the way it once was. This is nothing new. Apple, Safari and others have already placed measures to block third-party cookies, and we have seen greater adoption of cookie consent, which gives consumers control over what information is collected about their browsing habits. Legislature at the state level has been enacted, and this will continue with a possibility of federal regulation for consumer privacy control. While Google has announced it will not pursue the complete block of third-party cookies, there are some important considerations for the future.

Overcoming Signal Loss and Collecting Consumer Data

While the cookie will remain, consumer control over what information is collected and shared has become much more important as consumers opt out of tracking more frequently. This limits a marketer’s ability to collect rich information around consumer behaviors and actions and the opportunity to target consumers using third-party methods. To help overcome signal loss, there are a few important steps. 

As of now, there is less immediate urgency for the adoption of identifiers like UID 2.0 (Unified ID) from The Trade Desk, or even fully utilizing Privacy Sandbox. While these solutions may come to play a bigger part in the advertising ecosystem later on, this move at least delays the need for marketers to make drastic shifts—although the web will continue to evolve and consumers will take more action around what data is shared and with whom. With this in mind, first-party data should remain a top strategy for brands.

Developing methods to collect first-party data on active consumers remains incredibly valuable. The advantage in having this information, including the ability to segment, analyze, target and build loyalty through your current customer base, is invaluable for a brand. A clear value exchange between the brand and the consumer regarding sharing information will give consumers a reason to share. This can come in the form of personalization, offers, incentives or other communication options with the brand, and the ability to clearly opt out at any time.

Cookieless Approaches to Targeting 

While the cookie will remain, cookie-based third-party targeting has been diminished, and we will see this trend continue. For programmatic media bought on the open web, there are some readily available alternatives to ensuring you can reach precise consumers without relying on third-party cookies.

Verified Purchase-Based Targeting

Using verified purchasers, effectively another company’s first-party data, either through a retail media network activation or a partner (e.g., NCS, Circana, Numerator), provides the opportunity to reach consumers within a specific category or brand segment. These consumers are highly targeted within the purchase cycle of a particular product or category. This targeting can be competitive in nature to conquest and gain share against key competitors, or to keep your brand front and center with current customers to ensure it’s top of mind as they browse a shelf or category.

Contextual

Another approach to targeting includes finding contextually relevant places and spaces to reach targeted consumers. For example, a flour brand may want to advertise bread-baking recipes since that consumer is very relevant to the brand. Contextual targeting scrubs web pages, articles or videos in seconds and ensures that ads appear in environments where the audience already has interest. This relevance to the user makes it more likely to resonate and drive engagement. Targeting contextually helps mitigate any risks associated with brand safety concerns. A great programmatic team can help find extremely relevant content, which would be suitable to advertise based on the brand’s consumer base, brand safety standards and other signals.

First-Party Data

Using your own first-party data is not only a fantastic way to reengage current customers but also build rich lookalike/actalike segments to reach new consumers. These models will help reach new potential customers who are similar to those in your data pool based on characteristics and patterns of your current customer base. The advantage of utilizing your own first-party data for targeting is a lower-cost alternative compared to paying a third-party fee for targeting segments, and you control how these segments are built based upon cohort behavior. Some attributes may be based on purchase behavior of your product, like RFM (Recency, Frequency, Monetary Value) or the retailer where a consumer purchased a product.

Measurement Strategies 

Understanding the impact of your campaigns will help you make the most of precious budgets, optimize campaigns and build better strategies to achieve incremental growth. Due to the signal loss and opt-out consumer behavior, this will remain important even as the third-party cookie will remain. A few strategies that can be employed include leveraging clean rooms (if you have strong first-party data and can leverage retailer or publisher clean rooms), comprehensive media mix modeling studies or other approaches like control/exposed testing across consumers in a structured way. These approaches do not rely on a third-party cookie but rather on statistical methods to understand success, with varying levels of granularity and timing.

Moving Forward

Though Google will retain third-party cookies, it is clear they have heard and will heed the consumer call for heightened privacy. While we will continue encountering third-party cookies moving forward, their value to marketers will continue to diminish as more consumers opt out of being tracked. Instead, the emphasis on first-party data and innovative targeting has become paramount. This pivot sets the stage for a more transparent and resilient advertising ecosystem. By embracing these changes, marketers can continue to drive meaningful engagement and growth in an evolving digital world.