Chocolate chip cookie on a laptop keyboard
Digital Implications: What Does the Death of the Internet Cookie Mean to You?
Google has announced it will offer users more control over third-party cookies. Experts say this move marks the beginning of the end for cookies. What implications will this have on the future of digital advertising?

As predicted six years ago, the third-party internet cookie is on its way out. Internet cookies have been the main methods of tracking user activity on websites for over two decades. Rising concerns of user tracking accuracy, digital privacy and transparency have become the main topics of discussion surrounding the cookie’s obsolescence.  

 

 

image of person typing the word "cookies" into a google search bar

 

Many platforms such as Safari, Firefox, Brave and Internet Explorer have already begun to phase out the third-party cookie. Now, Google has announced it will soon be following suit. As of now, Google Chrome maintains 70% of the global desktop market share. Now more than ever, marketers and advertisers are shifting, out of necessity, toward deterministic approaches in order to replace the more probabilistic user tracking the internet cookie has provided.

The Types of Internet Cookies

Until recently, Chrome users could only clear their entire cookie cache, without the option to differentiate which types of cookies you are clearing. In allowing users to clear them individually, there is increased user-friendliness and transparency between the user and the browser.

Let's review the three basic types of cookies.

Session Cookies

Session cookies are the most basic type of cookies. Session cookies do not collect information from a user’s computer. They exist in temporary files which are then deleted as soon as the browser is closed. The information they obtain is solely based on the individual session and does not personally identify the user.

First-Party Cookie

First-party cookies (domain cookies) are used by the website that created them. They are stored within your device's memory and can expire whenever the website dictates. Without first-party cookies, a user’s internet experience would be nowhere near as enjoyable as it is today. These cookies are in charge of tasks like remembering your login information on websites or which products are in your online shopping cart.

Third-Party Cookie

The cookies in question are third-party cookies or cross-site cookies. Third-party cookies allow advertisers and marketers to track your user journey to create a profile around your internet usage. They are created by domains other than the one you are currently on. This information is sold and used to tailor ads or content that coincide with your behaviour online.

Why the Cookie Is Becoming Obsolete

We know the internet cookie has been an important tool for advertisers and marketers alike. The ability to track a consumer’s purchasing journey has proven invaluable for decades. However, with the emergence of compliance changes (GDPR), user privacy concerns, lack of personalization and the inability for cookies to assist in multi-device tracking, strategies are beginning to change.

Here are some of the main reasons why the internet cookie is being contested.

Appealing to Privacy Advocates

Cookies have had lots of enemies due to the fact that they carry information about what you search for. The move Google is making is to give users more control over their information. As Joe Maceda, chief investigation officer at GroupM stated:

“What’s interesting is this seems like a first step, not just on Google’s part but as an industry as a whole, where they are giving a small amount of control to the consumer to be able to have some limitations on how [they] are being tracked”

Google is one of the largest forces in internet advertising. It would make sense for them to follow suit with their competitors and exhibit more transparency. Fatemeh Khatibloo, an analyst at Forrester, went on to mention that the changes being made are surely a method Google is capitalizing on in order to save its large market shareto appeal to those who have concerns over internet privacy.

As Ben Galbraith, director of Chrome product management, and Justin Schuh, director of Chrome engineering, explained:

“The change will enable browsers to provide clear information about which sites are setting these cookies, so users can make informed choices about how their data is used.”

The Viability of Tracking

Cookie-based targeting and analytics solutions are often unable to track users between their mobile, desktop, tablet and any additional device. Advertisers and marketers are faced with the challenge of implementing various other methods to track their users more accurately.

 

image of a magnifying glass looking at a web browser on a laptop screen to depict tracking cookies

 

Just under 66% of mobile devices are non-cookie trackable, and 52.2% of web traffic is being generated by mobile phones alone. This means that a visitor accessing your website on their desktop on one occasion and on their smartphone on another occasion will be recorded as two different visitors, rather than one.

Neilsen conducted a study regarding the viability of cookie-based tracking, and found some interesting results:

  • 58% of cookie-based measurement is overstated
  • 35% of cookie-based demographic targeting is inaccurate
  • 12% of conversions are missed by cookies

There is a need for other, more viable, efforts to be utilized in order to effectively market to individuals.

Implications on the Future of Behaviour Tracking in Digital Marketing

Aside from the privacy concerns and the lack of tracking capabilities of internet cookies, there is another, more concerning, reason as to why Google has decided to oust the tracking cookie. Speculation exists that the new change in policy will surely cripple the ability of smaller advertising businesses to sell ads.

If companies can't learn information about their online audience, advertisers are more likely to buy ads from middle-men ad exchanges, like Google's, rather than directly from publishers. This will create an even more oligopolistic advertising market, further forcing small- to medium-sized firms to change methods.

So what are the methods that marketers can use to reduce their dependency on cookies?

People-Based Marketing

Two years ago, 60% of marketers already believed they would not have to be reliant on cookies by 2020. In addition, 90% of marketers say they see improved performance from people-based marketing, compared with cookie-based probabilistic campaign strategies.

People-based marketing, which has been on the rise, relies on deterministic approaches in order to accurately gauge their audience. This method involves targeting individual people, rather than groups. The approach requires relevant messages to be displayed across different channels and touchpoints in order to be achieved.

 

people based marketing infographic

 

The information needed to allow people-based marketing to be a viable method is reliant on first-person data which will still exist across all browsers.

  • First and last name
  • Address
  • Email address
  • Date of birth
  • Phone numbers

Utilizing this user-provided information enables marketers to create a more accurate and personalized profile, called a persistent ID.

Persistent IDs

Persistent IDs are the identifiers that can be used across multiple devices in order to recognize users and view what they are browsing. Persistent IDs create a more personalized experience. As James Nichols, the founder of a mobile measurement company Apsalar stated:

“Instead of relying on flawed technologies like third-party cookies, the brand can collect information about a user based on a persistent customer ID. Further, that user is likely to appreciate customized marketing from brands that they patronize.”

Conclusion

There is a catch to creating persistent IDs and the use of people-based marketing. By utilizing first-party data to create these user profiles, privacy concerns can become an even bigger issue. If people-based marketing efforts are the way forward, there are a few important considerations for digital marketers:

  • Be transparent
  • Provide clear opt-out options
  • Make it clear what information is or isn't being collected

Regardless of privacy concerns, the reality is that more than 5 billion people have mobile devices, and over half of these connections are smartphones. Cross-device tracking capabilities are truly the way forward for marketers and advertisers to provide a truly accurate user persona. Furthermore, it is estimated that by the year 2020, the average person will be connected across 6 devices, creating an even higher need to change the way we reach users.

Getting away from relying heavily on third-party cookies may not be such a bad idea, as Ryan Urban, the CEO and founder or BounceX stated:

“A growing number of ways to reach your consumers isn't actually a bad thing. Accessing these emerging revenue channels simply requires a unified view of consumer devices. With sticky identifiers like email or a device graph, marketers can unlock a truly People-Based Marketing approach. They'll have the ability to market to prospects on a one-to-one basis, regardless of logged-in status, device, session or browser.”

With cookies on their way out, the clear emerging theme is that marketers will need people-based marketing solutions, allowing them to reach audiences across all devices. Creating a more personalized experience for the user.

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Ryan is a passionate storyteller who thrives on challenging the status quo. He is an avid researcher with a keen analytical mind able to strategize on sales and marketing decisions by analyzing data and behaviours across various industries and technologies.