Data gathered through third-party cookies offers endless ways to grow an audience and build new segments, and it’s easy for brands to access. But as people become more aware of data privacy, more of them are turning to ad blockers in their browsers. In line with this, Google plans to phase out third-party cookies in 2024 to give its users stronger protection for their data privacy.
With an estimated 9 out of 10 internet users doing their online searches on Google, what alternatives do digital marketing specialists have as the American giant moves away from third-party cookies?
The Rise of First-Party Cookies
First-party cookies let you collect proprietary data, also called first-party data, on the users of a website or app. This data is valuable because your company collects it directly and owns it outright, rather than relying on other companies like Google or Facebook. Proprietary data comes from many different online interactions, such as a purchase, creating a customer account on an e-commerce site, filling out a contact form, signing up for a newsletter, or entering a contest.
Data gathered through native cookies is generally more accurate and trustworthy than data from third parties, such as that used in automated (programmatic) ad buying. It also allows for better personalization, making it easier to reach the right people and serve them well. A survey from BCG’s Global Digital Marketing Maturity Survey found that companies who connect their first-party data sources can double their revenue per ad or message and boost profitability by 1.5 times.
The hard part for most companies lies in managing and analyzing this data to uncover insights about their users. Using a customer data platform (CDP), companies can clean and consolidate this data to build audience segments. This information can then be used by automated tools like a CRM, as well as by marketers, to target and personalize ad campaigns.
But doing this is complex and costly. What’s more, Google, which draws most of its profits from third-party data, has already started developing new technology designed to protect data privacy.
Google’s New Technologies
The web giant has already begun developing new technology to balance data privacy with a personalized online experience.
The first attempt, the Privacy Sandbox, launched in 2021. It introduced FLoC, which grouped users together for targeting instead of targeting them individually, based on browsing history. But the idea quickly drew heavy criticism over privacy concerns, and Google dropped it in January 2022.
To address these privacy shortcomings, Google replaced FLoC with the Topics API. This lets the browser sort users into interest categories based on their browsing history from the previous week. For example, if someone frequently visits sites like Airbnb or Booking, their browser will assign them a “Travel” interest category.
The first version of Topics offers 350 categories, so as not to create unique profiles for each person and to help keep people anonymous. To make things more transparent, users will be able to see which categories they’ve been placed in. Each of us will be able to check our assigned topics and remove any we don’t like in Chrome’s settings. Google will also avoid sensitive categories, such as ethnicity or sexual orientation.
The first Privacy Sandbox trials rolled out in early August 2022, and Google plans to make the Sandbox APIs available starting in the third quarter of 2023. Google has also set up a webpage dedicated to updates on the project’s rollout.
On top of that, Google has announced that starting July 1, 2023, Universal Analytics will stop processing standard properties, so businesses need to prepare to switch over to the new version, Google Analytics 4. GA4 will comply with GDPR rules by anonymizing IP addresses and removing the link between users and the data collected about them. Data will also be kept for a maximum of 14 months.
A number of other changes are also on the way, including dropping the bounce rate metric and adding artificial intelligence. Because of this, it’s a good idea to set up a GA4 account alongside your Universal Analytics account now, so you can gradually adjust the way you analyze your data.
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Toward the Basic Attention Token (BAT)?
One emerging idea centers on the attention token, or Basic Attention Token, which uses Ethereum blockchain technology to shake up the world of digital advertising.
Paired with the Brave browser, the BAT idea revolves around three main goals:
- creating a better ad experience for end users while respecting their data privacy,
- paying content creators directly,
- improving returns for advertisers.
This decentralized, transparent ad model pays everyone involved in the online advertising chain fairly. Advertisers create targeted ads, and users are rewarded with basic attention tokens for the attention they give those ads. Publishers, in turn, receive BATs based on how much attention users give their content.
The quality of the content and ads shown to users is at the heart of the Basic Attention Token model. BAT’s rational targeting also helps cut down on ad fraud. The ultimate goal of the token’s developers is to bring this technology to the most widely used browsers, such as Chrome and Firefox.
So the slow disappearance of third-party cookies is turning into a chance to make more use of proprietary data, while keeping an eye on emerging technologies tied to data collection. Slowly but surely, new solutions are emerging to keep data secure and targeting personalized.
