Will Google kill third-party cookies?

How does Google use cookies?

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 inbox.

Google uses first-party data for user preferences and authentication and 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.

What will 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.

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.

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.

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.

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, general manager of partnerships and data 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.

Google Topics. An alternative in its fledgling stage is Google Topics. The Topics API groups users anonymously by interest, based on websites they visited in the past three weeks. Topics lets marketers continue to serve targeted ads. It replaces the Federated Learning of Cohorts -- Google's first third-party cookie replacement, which never reached the launch stage. Google is set to launch a developer trial for Topics in the first half of 2022.

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.

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