Is it finally happening? In January 2024, Google rolled out a new feature called Tracking Protection.1 This feature, currently rolling out to 1% of Chrome users, defaults to restricting third-party cookies. This move marks a significant step in Google’s Privacy Sandbox initiative. More notably, it’s a move that will shape the future of digital advertising.
The Beginning of the End for Cookies on Chrome
This is likely not the first article you’ve read on cookie deprecation. Still, here’s the quick synopsis: cookies help marketers tailor ad creative and targeting by collecting user information such as visited sites, viewed pages, clicked products, and completed purchases. However, Google announced they’re phasing out reliance on third-party cookies to increase user privacy. Cookies: great for marketers; a red flag for users.
The introduction of Tracking Protection indicates the initiative will likely take full effect by Q3 2024.2 Once third-party cookies are phased out, marketers will need to switch to alternative audience options. So, what does this mean? It means building reliance on the utilization of audiences with cookieless identifiers (like first-party data or identity resolution technologies), platform-based audiences (interest, in-market) within walled gardens, and contextual targeting.
The time is now. Read on to learn more about which media channels may be impacted by cookie deprecation and how brands can use this critical period to improve current strategies before the full rollout occurs.
Broken Down: Google’s Cookie Deprecation Impact by Marketing Channel
Cookie Deprecation’s Impact on Search Engine Marketing (SEM)
Believe it or not, not all search campaigns will be affected by cookie deprecation. Depending on your marketing mix, this change could affect your business differently. For example, Upper Funnel Push Tactics like Demand Generation and YouTube will be most impacted because they rely heavily on audiences as their primary signals. On the other hand, Lower Funnel Search Tactics, particularly in Search Engine Results Page (SERP) strategies, will be least affected as they focus on users’ search terms as the main signal.
Cookie Deprecation’s Impact on Paid Social
Good news: the impact of third-party cookie deprecation on paid social is expected to be low. Reliance on third-party data is currently less effective in social platforms. Ovative finds a 50-60% match on social platforms for third-party match rates (although they do vary significantly between different data sources).3 When using first–party data, this number jumps to nearly 90%, as it reduces the threat of data loss in this channel. Additionally, many social platforms are at the forefront of advocating for enhanced first-party data collection and conversion tracking through Server-Side Tagging (SST) which will also decrease the risk of cookie deprecation. In other words, don’t panic.
Still, while expected impact is low, marketers should ensure their strategies are ready for the third-party cookie phase out, especially where they‘re not using Server-Side Tagging.
Cookie Deprecation’s Impact on Video and Programmatic Media
Connected Television (CTV)
Like Paid Social, most CTV experiences will have a relatively low impact due to high user authentication rates. High authentication rates in many CTV platforms will preserve the ability to target at the user or household level. However, platforms like Roku, which don’t mandate authentication, will face more significant challenges. The future might see an increase in login pages on these services. Noteworthy players like Disney+ and Peacock are already adopting technologies like The Trade Desk’s UID2 and LiveRamp’s RampID to leverage first-party data signals that preserve granular targeting functionality across their inventory.
Programmatic Display and Online Video
This is where it gets a bit more serious. Programmatic Display and Online Video face substantial challenges due to reliance on third-party cookie targeting and measurement practices. According to Ovative data, first-party data matches ~30-50% and will continue to improve with the adoption of authentication tech,3 while marketers can expect cookie–based match rates to decline throughout 2024. The main takeaway: marketers will need to rethink identity resolution and second-party data integration strategies to adjust to this change both for targetability and measurement.
Cookie Deprecation’s Impact on Retail Media Networks
The impact of cookie deprecation will not be uniform across all aspects of advertising within Retail Media Networks (RMNs). Advertising via retailer-owned or highly authenticated channels can unlock opportunities to use marketer first-party data, platform data, and RMN audiences. These capabilities will make the impact of cookie deprecation relatively low. Phew.
Of course, there’s a catch. The impact becomes more pronounced in the off-platform reach tools that RMNs use. These inventory options are often reliant on third-party data for effective targeting and measurement, and therefore, will face challenges as the traditional cookie-based approach becomes less reliable.
Time Is Running Out: Prepare for a Cookieless World
There are many approaches Ovative experts use with clients to prepare them for cookie deprecation. Here are some ideas for how brands can prepare for widespread cookie deprecation:
Use Alternative Audiences To Prepare for a Cookieless World
First Party Data
Make the most of your first-party data. Marketers should build and leverage it as much as possible. Building relationships and getting consent for data usage will become crucial for marketers to maintain personalized experiences.
Marketers can enhance their first-party data set through many tactics, including:
- Working with their agency partner to ensure CRM lists are up to date and ready for use
- Analyzing first-party match rates with current media partners
- Exploring clean room partnerships for enhanced data collaboration
Target In-Platform Audiences
Many platforms, most notably walled gardens, provide audiences that marketers can target such as interest-based audiences, in-market audiences, or demographic audiences. Marketers should partner with their agency to identify what audiences will reach their target customer. It isn’t a one-size-fits-all.
Target Identity Resolution Audiences
Partnerships with identity resolution companies such as LiveRamp and Neustar are particularly helpful for brands to find their customers online using a first-party data strategy that won’t be affected by third-party cookie deprecation.
Use Behavioral Data To Prepare for Cookie Deprecation
Conversion Tracking
Marketers can use the following tools to track conversions more effectively and most importantly without the help of third-party cookies:
- Enabling first-party cookies in pixels
- Implementing Server-Side Tagging
- Ensuring they have the most updated platform pixels implemented
- Using Google Enhanced Conversions to increase accuracy
Contextual Targeting
One more cookies alternative: contextual targeting. This essentially means placing ads based on the type of content being viewed. This ensures that brands are showing up within the content their target customer is interested in without sacrificing privacy.
Tactics
Leverage Machine Learning and AI Campaigns
We can’t go without mentioning machine learning and AI. Many media platforms are offering campaigns that use these tactics. These campaigns could be a great test for brands as they use smart bidding to optimize campaigns in real-time based on data signals in-platform.
Create Customized Ad Creative
Marketers can work with their agency partners to customize their ads specifically to audience segments or through creative adjustments made in AI campaigns.
What’s Next? Set Up a Phased Approach with Ovative
Face it, widespread third-party cookie deprecation is imminent. So it’s important for marketers to use this gradual phasing-out to adapt their strategies and test the effects. The key? Stay informed, embrace alternative audience options, and optimize tactics in response to the evolving digital advertising ecosystem. Connect with Ovative’s media and measurement experts to help you remain successful in your audience strategy, even after cookies are fully removed.
Sources: [1] Google Developer Site; [2] Search Engine Journal; [3] Ovative Internal Data
