Google killed third-party cookies: What's next?

How does Google use cookies, and what's next?

Browsers can use eight types of cookies, although first-party and third-party cookies are the most prevalent. A cookie stores a small amount of data on a user's computer, such as the site visited, login information and pages the user viewed on the site. A first-party cookie only gets data from the site the user accessed.

The gray area for user privacy comes with third-party cookies, which let other sites access data. For example, organizations can serve an ad on social media platforms like Facebook or Instagram for the same shoes a user viewed on a company website. Third parties can also track user behavior across multiple sites. If a user shops for kayaks, an advertiser can use that information to place relevant ads in the user's social media feeds or email inboxes.

Google uses first-party data for user preferences and authentication and used third-party cookies for advertising. Some cookies let Google serve ads on third-party sites, measure campaign performance and conversion rates, and personalize content, according to its support page.

Now, as Google moves toward cookie depreciation, it has rolled out the Privacy Sandbox, which uses APIs to send anonymous user data to advertisers. The intent is to reduce cross-app tracking but still provide marketers with enough data to serve relevant ads to different user demographics, validate identities and detect fraud.

Google segmented Privacy Sandbox's APIs into the following use cases:

• Topics. Google pitched Topics in 2022 to replace third-party cookies. It enables advertisers and marketers to personalize content based on users' interests, such as parenting or fan fiction.
• Attribution Reporting. This use case lets marketers measure ad impressions and conversions.
• Protected Audiences. This lets marketers send ads based on websites the user already visited.

What does Google's decision mean for marketers?

Digital advertising relies on third-party cookies to track website activity, as they can serve targeted social media ads, according to David Farkas, founder and CEO of The Upper Ranks.

"Profiles could not be established, accessed or maintained without [cookies]; customer data could not be collected without user profiles, and targeted marketing could not be conducted without data," Farkas said.

When Google announced its decision to end third-party cookies, many marketers worried they wouldn't be able to track the right data anymore. Yet, the end of Google's third-party cookies doesn't mean marketers lack options; it means they should adjust their strategies to use customer-provided data directly.

"First-party data from customers is the most trustworthy and relevant approach to discover your target audience, their brand engagement, purchase process and the best way to reach them," Farkas said.

Instead of tracking users by their devices, marketers could gather information directly from customers through websites and apps they access. First-party data enables better predictive modeling to forecast what a customer might purchase next, Farkas said.

Additionally, Google's Privacy Sandbox includes APIs that could help marketers target customers, albeit with less personalization than they previously enjoyed with third-party cookies. For example, Topics facilitates interest-based advertising, which records user browser activity and enables ad tech platforms to retrieve topics of interest to the user without revealing other information. So, if a user shopped for boots, the ad tech platform could see the user's interest in footwear, apparel and boots.

First-party data from customers is the most trustworthy and relevant approach to discover your target audience, their brand engagement, purchase process and the best way to reach them.

Meanwhile, the Protected Audience API creates an ad space marketplace to enable relevant ads. It also uses interest groups to let marketers participate in on-device auctions in the user's browser and appear in premium ad space.

Other alternatives to third-party cookies

While first-party cookies serve as one alternative to third-party data, marketers can also use tracking technologies like device fingerprints and contextual targeting that don't rely on user data.

First-party data. Marketers shouldn't overlook the option to get information directly from the source -- in this case, the customers themselves. Asking customers about their preferences to later offer more personalized experiences can help marketers prepare for a world without third-party cookies.

Device fingerprints. These fingerprints can mimic third-party cookies. But instead of the user's machine storing the data, a server-side database stores device fingerprints, according to Philip Pasma, president of Asterisk Marketing. A device fingerprint starts working as soon as a user visits a website, and the tracker -- usually JavaScript code -- collects device information, he said.

Contextual marketing. For this approach -- also called contextual targeting -- users receive ads that match the content they view instead of ads that match their data. Pasma said he considers contextual marketing "future-proof" against the end of cookies because it doesn't require information from users. Contextual ads match the website's content using keywords and topics. For example, a user reading health-related information might see an ad for exercise equipment on the same page, he said.

Contextual analytics often use AI and natural language processing, which help marketers provide more targeted ads to consumers. These analytics can boost video ad performance, according to Michael Schwalb, executive vice president and general manager of marketing at JW Player.

"AI and natural language processing [have] enabled the accurate analysis of video content itself, with the ability to identify objects, people, themes and languages. Ultimately, it offers advertisers the ability to buy user intent at a scalable subcategory level in a way that was impossible with third-party cookies," Schwalb said.

Social media. Consumers are on social media, making these apps a clear way to reach customers with relevant content. Customers can use apps like Instagram for shopping purposes, which lets marketers reach new audiences and target ads on the platform.

Universal IDs. Universal identifiers can track users across websites and devices, but without the same reach as third-party cookies. They can be created with first-party data.

Ultimately, the end of Google third-party cookies isn't the end of digital advertising. However, marketers should reevaluate their strategies and consider alternatives to reach ideal customers and provide personalized experiences.

Editor's note: TechTarget offers ABM and project intelligence data, tools and services.

Christine Campbell is a freelance writer specializing in business and B2B technology.