A Cookieless Advertising Future + What It Means for Marketers
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Pathlabs Marketing |
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April 19, 2023 |
CONTENTS
Have you ever been browsing a website and noticed an ad for a site you just visited popping up? We call this a retargeted ad. These ads use third-party cookie data to follow your online behavior and place advertisements accordingly.
Cookies have been a topic of significant attention over the past few years. With recent regulations from major players in the tech world (such as Google), marketers have to adapt to a cookieless environment in their campaigns.
In this article, we will discuss the definition of cookies, the controversy surrounding them, what a cookieless future would look like, and what marketers should do to prepare for it.
What Are Cookies? Why Are They Controversial?
Cookies are small pieces of data stored on web browsers and devices that allow websites and servers to display personalized content based on user behavior and preferences. When a user browses a website, a cookie is placed on their web browser. When they revisit the web, their browser provides the cookie data to the server, which remembers the user's preferences and interests.
Marketers have access to different types of cookies, including first-party and third-party. First-party cookies track login information, page layout preferences, and shopping cart items, and they aim to enhance the user's online experience. On the other hand, third-party cookies track user data related to their browsing history, behaviors, and preferences for advertising purposes.
Third-party cookies are more complex because a third-party service like Google AdSense handles them. These services connect websites to online auction platforms to serve relevant ads to users. The cookies collect extensive data about users and share it across multiple websites, which can be controversial for some users who consider it a breach of privacy.
Overall, cookies have received significant attention in recent years, particularly as large tech companies like Google have announced new regulations that will affect how marketers use cookies in their campaigns.
“Our marketing ecosystem is seeing big companies having to change the landscape and eliminate the use of third party cookies – a method that was originally meant for storage and to help remember your data as you jump from page to page. Not advertising.”
As marketers prepare for a cookieless world, they must adjust their strategies to deliver personalized content and advertising to their target audiences effectively.
What is Cookieless Advertising?
Cookieless advertising is digital advertising that doesn't rely on third-party cookies to target and deliver ads to users. With recent changes to privacy regulations and browser policies, marketers and advertisers seek alternative ways to reach and engage with audiences online.
Initially, cookies were meant to promote utility for users and websites because they simply tracked who was visiting the page and a few other identifiers about the user. Nowadays, they can track everything from age, location, browsing, and search history to what links we have previously clicked on. This raises privacy concerns, therefore making third-party cookies a thing of the past and kicking off the age of cookieless advertising.
The shift to cookieless advertising presents both challenges and opportunities for marketers. On one hand, it limits the amount of data available for targeting and tracking, making it harder to reach audiences with precision. On the other hand, it encourages more creative and innovative approaches to advertising that prioritize user privacy and consent.
How Cookieless Advertising Works
In cookieless advertising, the fundamental concept of fielding content to users remains the same as in traditional advertising. However, the significant difference is that the process of delivering content cannot depend on third-party cookies. Instead, marketers must resort to alternative methods to reach their target audience.
First-Party Cookies and Data
Although third-party cookies will phase out, first-party cookies are still available. These are the cookies and data the marketer implements on their home webpage, allowing them to track some user info, especially general preferences, to enhance the user experience.
Gated Content and Questionnaires
These commonly block a user from accessing web content until they complete an action. This action may be to complete a quiz, questionnaire, or even an email subscription. This provides extra data on the user for the marketer. The drawback here, however, is if the content could be more important or valuable to the user or when prompted to take a quiz or questionnaire, they may exit the page immediately.
Zero-Party Data Collection
This is a solid alternative for third-party cookies because it forces websites to ask if they can track user data and implement cookies. This pops up right when a user accesses a page, states the use of the cookies, and allows the user to opt-in or out. These are useful because if the user has no problem with cookies or info sharing, they will opt-in and provide the marketer with this valuable data.
Google Topics
Google is currently working on this replacement for third-party cookies. This model looks at web pages users recently visited and places them in specific topic categories accordingly. For example, if a user looks up five different tennis equipment websites, Google will put them in a sports or tennis-specific topic category. The user's categories determine what ads Google will field to them.
This alternative is attractive because it allows users to keep their personal information private while still receiving relevant content from Google. Marketers can still achieve topic specificity with their ads, although they will have less insight into the user's identity that they are targeting.
UID 2.0 by the Trade Desk
This alphanumeric identifier system is an alternative to third-party cookies. Users will visit a website connected to the UID and be able to consent to have their information tracked. They will also enter their phone number or email, receiving a unique but anonymous identifier.
The UID then shares this info with different SSPs and DSPs, allowing them to serve relevant ads to the user still. Overall, this provides more consent on the user's side, and lots of encryption is also involved to ensure that no user data is left unattended or vulnerable.
What Cookieless Advertising Means for Consumers
In a cookieless advertising world, users will regain some of their online privacy and control over their data. In the past, third-party cookies could track user data without their explicit consent, but with new regulations, the amount of data collected has decreased, and users can now block most third-party cookies.
As a result, the digital user browsing experience will also change. Users will not be able to rely as much on third-party cookies to generate personalized and relevant content. This means users must put more effort into searching, inputting information, and finding products, services, and content that match their interests.
However, despite these changes, users can still navigate and use the internet effectively.
“With the phase out of third party cookies, consumers are more empowered and have strong control over what ads they want to see. What doesn’t change is the model of free content access to users in exchange for relevant content provided to marketers. If not, we have to pay for website content, which nobody wants.”
What Cookieless Advertising Means for Advertisers
Advertisers are impacted by cookieless advertising, as third-party cookies are no longer viable. As a result, they need to explore alternative methods, such as gated content or Google Topics, to reach their target audience.
Some marketers are turning to zero-party and first-party data, as these are still valuable sources of direct feedback from users. However, first-party data can only be collected by the website owner rather than generalized to a broader audience identity.
Due to cookieless advertising, marketers also have to shift their ad budget and media strategies significantly. While some programmatic platforms and services still have valid user data and target audiences, marketers may have to switch from cookie-based to non-cookie-based platforms.
Additionally, marketers are exploring different channels and ad methods, such as display, dynamic search, and mobile ads, and focusing more on user context
The Challenges of Cookieless Advertising for Marketers
Cookieless advertising is a challenge for many marketers because cookies have been a critical component of their marketing and programmatic strategies for the past two decades. However, as the flow of unregulated data through cookies is ending, adapting to this change is proving difficult.
Advertisers should invest more time in attribution – knowing which touchpoints users interacted with before converting. Cookies were like little breadcrumbs, tracking users and depicting this user journey. However, marketers now have to get crafty by using first- and zero-party data to paint this picture.
Finally, cookieless advertising presents a challenge because there isn't a perfect substitute for the original method that is being restricted - third-party cookies. Despite this, many marketers are currently working on developing alternative solutions, and the increasing prevalence of cookieless ads is pushing the industry towards more significant innovation.
“There is no silver bullet replacement for cookies. The approach we are taking at Pathlabs around newer cookieless methods is to utilize current technologies that ensure we meet our goals. At the end of the day, many of our other methods, like CTV don’t use cookies at all; so there is no threat or change here. We will only use cookie alternatives when our clients want them or they make sense to the campaign.”
How Marketers Can Prepare for a Cookieless Future
There are several steps that marketers can take to adapt to the new era of cookieless advertising. These include:
Do a Status Check
To better prepare for the age of cookieless ads, marketers should start by evaluating their current use of cookies, which are likely first-party cookies. For those who do not use cookies, it is crucial to understand the reasons behind this decision. Is it because cookies are unnecessary, or do they not align with the campaign's goals? By assessing the use of cookies, marketers can determine how to adapt their strategies to the changing advertising landscape.
Lean Into First-Party Cookies or Find Alternatives
If the advertiser wants to consider investing in cookies, they should assess what viable options of cookies they can use – especially after the third-party cookie phase-out.
Alternatively, advertisers should switch to less cookie-based ad methods. The sooner they can transition, the faster they can work through their learning curve and optimize their ad delivery methods. An integrated media method could work, using cookie-driven and cookieless methods.
Prioritize Zero and First-Party Data, and Context
Marketers should prioritize collecting high-quality zero and first-party data, regardless of whether they continue using available cookies. This data comes directly from the audience and reflects the most engaged users. Collecting this data in non-intrusive ways tailored to the user's context is essential.
A practical method for collecting zero-party data could include an email subscription button during online orders and follow-up with a survey via email. This enables marketers to collect valuable zero-party data from the survey while also aiding in attribution by tying the email and purchase to the user.
Marketers should be strategic in prioritizing data that reflect user behavior and has a valid impact on conversion.
“Marketers should feel free to test out these new alternatives to cookies. However, it is not wise to invest all funds and resources into these methods.
Instead, marketers should focus on ensuring that the marketing methods they currently employ are ensuring all areas of the funnel are properly watered. If cookieless methods make sense to meet the funnel goals, then so be it.”
The Future of Cookieless Advertising
As the industry shifts away from third-party cookies, we want to share three key takeaways for the future of advertising: data protection, bias elimination, and innovation.
Data Protection
The extinction of third-party cookies is a breath of fresh air for those concerned about how much data these cookies track. With the containment of data, multiple popups will likely ask to use cookies and cookie blockers that help users meticulously manage what websites track.
Elimination of Bias
New methods like Google Topics focus less on gender and race-identifying data and try to hone in more on activities and interests. The hope is that eliminating third-party cookies will lead to a positive shift in removing bias in advertising. Cookies put a lot of weight on demographics which can perpetuate stereotypes or prejudice. While it is not a perfect solution, it is a step in the right direction toward more inclusive advertising practices.
Continuous Innovation
Lastly, marketers will likely have to go through multiple learning curves and iterations with cookieless advertising methods. Even Google has replaced its original replacement for third-party cookies with Google Topics because the playing field continues to change. This need to adapt is not new to marketers; they must keep an eye out for new methods and not completely resist innovation and evolution.
In the meantime, there are steps that marketers can take to prepare themselves for the future of cookieless advertising. They should first consider what cookies they currently use and prioritize ways to collect more quality zero and first-party data, strategically prioritizing data that speaks to user behavior and has validity in effect on conversion. By placing data collection methods in the ideal context, marketers can collect zero-party data rich in user engagement. They should also keep an eye out for new methods and be willing to evolve their strategies to ensure their success in the future of advertising.
In Conclusion…
The elimination of third-party cookies is ushering in a new era of advertising that poses challenges for marketers. While the use of cookies has raised concerns about data privacy and biases in advertising, their absence presents an opportunity to collect high-quality first-party data and explore innovative approaches to audience targeting.
As marketers prepare for this paradigm shift, they must prioritize strategies respecting user privacy, fostering transparency, and generating meaningful insights. By embracing the new age of cookieless advertising, marketers can build stronger relationships with their audience and achieve better campaign outcomes.
