Google Will Block Third-Party Cookies In 2023 (How Will This Affect Marketers?)
Updated on: 16 December 2021
If you’re all ready to into the new year with the top 10 marketing trends in 2022, your marketing game is all set. But don’t forget about 2023, the year after, the following, and so on! Marketing is an ever-changing cycle, and being constantly aware of Google’s always changing updates is more important than ever.
Google announced in February of this year that there will be a third-party cookie ban, which will have a significant effect on the ads industry. The search engine giant has been building up to this for some time. In August 2019, Google rolled out “Privacy Sandbox,” an initiative to target web ads while preserving user privacy at the same time.
In January 2020, Google then announced that they were planning to block third-party cookies from its Chrome browser by 2022, something that Safari and Firefox have done years ago. According to Google, they are going to replace third-party cookies with the Privacy Sandbox technology they have developed.
How important are third-party cookies?
Third-party cookies are cookies that do not come from the website operator. For example, if you visit a site for the first time, the web server will generate so-called first-party cookies, storing all the important settings and user data. When a user visits the site again, the third-party cookies will retrieve the data and settings stored in their server.
Third-party cookies are hosted by an ad server. They are used to record user behavior and path on the internet, which will be used to create a user profile. The different user profiles created will then be the basis of personalized adverts shown to each user. This means that third-party cookies are powerful Search Engine Optimization (SEO) tools that can improve your ranking.
These tracking cookies collect these kinds of information:
- Personal information, such as age, gender, and location
- Time spent on the site and its webpages
- Subpages visited on the site
- Site visited through which the cookie was generated
While third-party cookies are beneficial for advertisers, they have disadvantages for users. For one, these cookies will read personal data that allows marketers to personalize ads. This makes these tracking cookies controversial under the data protection law. Aside from that, the presence of third-party cookies gives users the impression that your site cannot be trusted. Additionally, website operators will need to inform users about using third-party cookies, which can be annoying to many people.
Why is Google banning third-party cookies?
Google’s third-party cookies are on millions of sites. They track your activities online to help website operators build a profile of you based on your interests. All of this is geared toward creating personalized ads for each user, which will help site owners improve user experience. However, people have become wary of the privacy issues that these cookies bring. A lot of people use the pop-up blocker features of their browsers to block these cookies.
Enter, Google’s Federal Learning of Cohorts (FLoC). It’s a privacy-first, interest-based advertising technology that will keep track of users’ browsing habits, and then place the user in different audiences or “cohorts.”
What advertisers will do to create personalized ads is to target their ads for different cohorts, instead of the usual individual user. This means that Google will still deliver targeted ads to you, but without violating any privacy law.
Google says that marketers will get virtually the same ROI from FLoC as they would through cookie-based tracking. They are currently testing FLoC with advertisers to determine whether it can be a legit replacement. While there is a possibility that this new technology will not work out in the end, Google is confident enough to announce that tracking cookies will die eventually and they are not replacing it with something similar.
However, Google announced in June that it is delaying its plans to ban third-party cookie tracking with a less invasive technology until 2023. Nevertheless, the term “cookiepocalypse” has been making the rounds online since Firefox and Safari have already started blocking third-party cookies.
Google also announced that the decision to block cookies in mid-2023 is “subject to our engagement with the United Kingdom’s Competition and Markets Authority (CMA).” This means that part of the delay is due to the need of working more closely with regulators to come up with better technologies to replace tracking cookies for use in advertising and marketing.
What does it mean to marketers?
A lot of marketers and advertisers will be affected once the third-party cookies ban will come full swing.
For one, it will make it harder for businesses to track users across the web. But it doesn’t mean that you won’t be able to target ads. There are still ways to track user activity. Google says that with FLoC, advertisers will be able to aggregate and anonymize the information. Even if third-party cookies are taken out of the equation, FLoC will allow marketers to effectively track online users and place them in cohorts, or within large crowds with common interests.
Come 2023, when the banning of third-party cookies will fully take effect, all major web browsers will stop supporting tracking cookies, making it impossible for advertisers to set up audience targeting. Non-personalized ads will rule the internet, and there will be a decrease in the effectiveness of advertising campaigns.
Interactive Advertising Bureau (IAB) Vice-President Orchid Richardson says that brands are the least prepared for this move. She also said that marketers are hoping that someone will come up with an alternative solution before the ban is completely implemented. As for forward-thinking brands, they have already started using first-party user data from CDP platforms, CRM, and offline contacts in their advertising campaigns, allowing them to customize retargeting and offer more products to loyal customers.
IAB reports that advertisers could lose up to $10 billion in ad revenues when the third-party cookies are completely phased out. According to research conducted by Google, most advertisers could lose up between 50 and 70% of their revenue if they don’t take the appropriate steps by 2022.
Aside from that, revenues will significantly decrease as brands direct advertising budgets to sites with their authorization systems that consistently collect and process user data. Large technology platforms, like Facebook, YouTube, Amazon, and media houses that receive user data after registration, will be the ones that will benefit most from this move.
Since CPC (cost-per-click) and CPA (cost-per-action) models don’t require control over reach and frequency, they will become more popular come 2023. However, such models won’t be as profitable to publishers as the tracking cookies are. Aside from that, publishers won’t be too trusting with the programmatic ecosystem because of the potential increase in traffic fraud, which can only be rectified when verification systems are in place instead of third-party cookies.
Conclusion
It’s important to reassess your marketing strategy with regard to third-party cookies before it’s too late. You should make it a point to determine the consequences the third-party cancellation will have on your business to be able to formulate solutions that will help you maintain digital marketing efficiency even after Google rolls out the ban of tracking cookies.