The Death of Cookies and its implications for Advertising Industry
Introduction to Cookies
In this digital age, cookies have become an essential component of the online experience. They are small text files, stored on a user's device by their web browser and play a crucial role in the functionality and personalization of websites. However, their significance extends far beyond mere convenience and user experience.
Cookies are a linchpin in the world of online advertising, enabling advertisers to deliver targeted, relevant content to users. Understanding cookies and their importance in advertising is key to grasping the intricacies of the modern digital marketing landscape.
What are First-party cookies?
First party cookies are cookies that are created by websites when we visit them. This includes web based applications and web based SaaS . They are employed to remember user preferences, login information, and other session details, ensuring a seamless and personalized browsing experience.
For instance, first-party cookies can save language settings, maintain shopping cart contents between visits, and keep users logged in to their accounts. By retaining this information, first-party cookies help websites provide a more efficient and user-friendly environment, which is crucial for retaining visitors and improving overall user satisfaction.
At a technical level, first party cookies are set and available in the same domain.
Are First-party cookies going away?
No, they are NOT. First party cookies are essential to give users an enhanced user experience. They are crucial in providing rich web based user experience for web applications
What are third-party cookies?
Third-party cookies are a pivotal component of the online advertising ecosystem, designed to track user behavior across multiple websites. Unlike first-party cookies, which are created and stored by the website a user is directly interacting with, third-party cookies are placed by external domains—typically advertising networks or analytics services.
In technical terms, third-party cookies are set by domains other than the one being visited by the user.
Why are there user concerns regarding third party cookies?
Third party cookies collect data on user interactions and preferences as they navigate various sites, enabling advertisers to build comprehensive profiles and deliver highly targeted ads. While they enhance advertising effectiveness by personalizing content and improving campaign accuracy, third-party cookies have also raise significant privacy concerns, leading to increased scrutiny and regulatory measures aimed at protecting user data.
As third party cookies grew exponentially we started seeing incidents of cyber attacks where cyber criminals have used this data to impersonate users, steal passwords and financial data.
Concerns for privacy let to changes in regulation that views cookies to contain personal identifier data and hence user consent is required before the user is tracked or data about the user is collected.
When are browsers dropping support for Third-party cookies?
Safari
As of H1 2024, Safari had browser marketshare of nearly 19%. Apple introduced Intelligent Tracking Protection to Safari's Webkit Engine way back in June 2017.
ITP introduced the following changes:
- Third-party cookies are entirely blocked.
- First-party cookie restrictions: If a user does not interact with a website for seven (7) days, Safari erases first-party cookies set from the client side (the browser) and other browser storage items—regardless of whether the user has consented.
- Certain first-party cookies are exempted from the 7-day rule: Cookies set from the server side are good to go if they are not part of the so-called CNAME cloaking, which is a technique used to disguise third-party cookies as first-party to avoid detection by tracking protections like the ITP.
Firefox
Firefox is the 3rd most popular browser in the market. It rolled out Enhanced Tracking Protection in 2019.
ITP introduced the following changes:
- ETP restricts known third-party tracking cookies straight out of the box, using a regularly updated list of trackers.
- ETP also blocks fingerprinting and other hidden tracking methods, including “crypto miners,” which can use your device’s power without your permission.
- And with ETP’s Total Cookie Protection Firefox ensures that first-party cookies are not misused for cross-site tracking.
Chrome
It looks like based on the latest post from Google, that it will be delayed again till end of 2025 as Google works with UK’s Competition and Markets Authority (CMA) on refining its Privacy Sandbox for the Web
Implications for Advertising Industry
One way or other, third-party cookies are going away. Right now they are living on borrow time. This means we as marketers and professionals in the advertising industry must prepare for this eventuality.
Without third-party cookie support, advertising and analytics become more complex and in certain conditions under report the actual number. For example returning visitor numbers could be under counted, underestimating repeat engagement and return cohort numbers.
Other challenges include difficulty in retargeting, creating holistic personal and personalized content strategies and attributing engagement to specific marketing efforts.
Opportunities that it brings?
Every problem is a opportunity to create a more elegant solution. There should be a renewed effort by the industry to work together on an unified approach to focus on regulating the information tracked.
Second, marketers and advertisers should prioritize engagement metrics.
Finally brands should focus on a more holistic approach that includes an omni channel strategy. New channels like DOOH are worth investing given their high engagement rates and recall
References