How to market in the cookieless era: the technologies that will matter now

By Elliott Clayton, Managing Director, International Sales, Epsilon.

  • 1 week ago Posted in

Marketers have been using third-party cookies for over twenty years to understand user behaviour across the Internet. Regardless of when it happens, the end of the era will cause significant disruption for brands, advertisers and digital media solutions – yet many marketers are still unaware of just how much their business will be impacted.

Not being able to use third-party identifiers—including third-party cookies, mobile advertising IDs and IP addresses—is increasingly hindering the ad tech industry. Whereas third-party cookies have been deprecated on Safari since 2017, and Apple's ATT restricts usage of consumers' device IDs unless they opt in, Google only turned off third-party cookies for 1% of Chrome browsers relatively recently, in January 2024. This affected roughly 30 million browsers. Google’s plans to phase out the cookies completely has been delayed but make no mistake: With users demanding greater privacy and more control over their data, it is only a matter of time before it does happen.

Marketers are faced with a future where third-party cookies, which they have relied on for years, are no longer a viable basis for connecting with their target audiences. And, according to a recent study by Epsilon, the majority are not prepared, not testing alternative activation methods – and perhaps not fully appreciating how ad performance will drop once cookies go away.

The cookie is crumbling

As the name implies, third-party cookies are created and placed by third parties other than the website a user is visiting directly. Common uses in digital marketing include understanding a user’s browsing data across websites; retargeting – using search activity to retarget visitors with visual or text ads based on the products and services for which they have shown an interest; and ad-serving – making decisions regarding the ads that appear on a website, deciding when to serve these ads, and collecting data in an effort to educate advertisers on consumer insights and ad performance.

While Google is the last major browser to phase out third-party cookies, this move is arguably the most significant as Google has the largest browser share. The lack of third-party cookies will make it much more difficult to identify customers on the open web. Certain campaign types, such as retargeting customers, rely heavily on the ability to locate users across third party websites and these will see a particularly big impact. Marketers will need to find new ways of reaching their audiences online. At the same time, with less identifiable advertising inventory, competition for it is going to get tougher.

Less information available to marketers will also mean fewer chances to personalise ads. Marketers may turn to cohort-based or contextual targeting instead, however those tend to be much lower performing.

Finally, unidentified inventory will make it challenging to measure return on ad spend (ROAS) and potentially lead to marketers over-relying on media mix modelling (MMM), which has significant time delays in delivery and offers much less actionable insights.

Put all these challenges together and you can see how the end of third-party cookies could mean a real step backwards for the advertising world. Organisations working with an external ad tech company to run their media campaigns might hope that their partner has a solution figured out – but if the partner doesn’t have a strong identity solution, they will struggle with the same issues.

What about Google’s Sandbox?

As a response to marketers’ needs in the wake of cookie deprecation, Google’s Privacy Sandbox became generally available to Chrome users in September 2023. By design, the sandbox aims to create a consumer-centric, privacy-forward environment that enables targeting via Topics, a limited set of attributes based on recent browsing history and measurement based on cohorts. However, it’s a walled garden solution with a poor value exchange as brands will effectively become disconnected from their own customer data. Google will continue to allow itself to leverage Google-owned user-level identification while undercutting independent publishers and competing with ad tech companies’ ability to target consumers.

Adding to the problem, Topics is a particularly limited form of contextual data, based on classifying the sites rather than the pages that the user visits, and so it will give advertisers only a little insight into where users go and what they do online.

How to succeed without third-party cookies

So, what should firms consider when planning their approach to digital marketing in the new 'cookieless' era?

The first step is understanding exactly where and how they are currently using third-party cookies – and then identifying how to replace them. Without being able to rely on data from cookies, the foundation for marketing performance will be customer profiles that are rooted in companies’ own, verified first-party data.

If they are not already doing so, organisations should prioritise investing in first-party data collection strategies and data readiness. This includes implementing or enhancing a customer relationship management (CRM) solution that creates a solid first-party data asset in a consented, privacy-safe way. Loyalty programmes are a great way to engage with customers and collect valuable online and offline data on their preferences, needs and buying behaviour. It also gives marketers a better view of real people rather than having to rely on digital identifiers that aren’t unique or permanent, such as email addresses.

Analysing and developing insights from their first-party data will help organisations build a deeper understanding of their customers. This in turn will fuel better personalisation: Partnering with publishers, marketers can then reach their customers and prospects with the right messaging, wherever they spend their time. Data cleanrooms provide a safe and privacy secure environment for connecting the dots between a brand’s own and their publisher’s data to reach the right audiences.

All this will result in more targeted and better advertising. Technology partners can feed back the insights gained through messaging, helping marketers to keep learning about their customers and prospects and to improve and personalise their campaigns further.

Key questions to ask your advertising partner

If working with an ad tech partner, here are some key questions to ask:

· What is your approach to identity resolution? Do you message real people instead of just cookies or devices? Do you focus on audiences or real individuals?

· How does your solution today reach browsers where third-party cookies are already gone? How well do these campaigns perform?

· How are you managing personalisation on Safari and Firefox today? What are your plans for personalisation post-Chrome deprecation?

· Measurement is one of the pitfalls of identifier deprecation. How are you going to approach multi-touch attribution, or are you going to rely on MMM?

· Do you have direct relationships with publishers? How are you ensuring access to identifiable inventory?

· What alternative solutions are you currently testing? How are they performing? Have you tested them in browsers like Safari that don’t accept third-party cookies?

For organisations whose marketing strategies rely heavily on third-party cookies, it’s high time to start exploring alternatives: by finding tools that can help leverage first-party and transactional data, and by looking to partners who can provide stable and scalable identities. Many marketers have first-party data that can be used to better understand and engage their customers across the open web. Because publishers have a direct relationship to the visitors to their sites and apps, it’s important to work with them, or with companies that do.

There is a world in which brands will not just survive cookie deprecation but thrive – and ultimately, get closer to their customers. The key is to ensure they can deliver both privacy and personalisation by future-proofing their digital media and first-party data strategies now.

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