As Google and other tech giants begin to sunset the digital cookie, we’ll examine what the usefulness of cookies is in current marketing strategies and what the future will (or should) look like for companies looking to move beyond them. 

First, what exactly are cookies?

Do you ever wonder how certain ads just seem to “follow” you everywhere you go online or how certain personal details of yours just seem to populate automatically in the shopping cart checkout process? Well, wonder no more. It’s because of cookies. Cookies are small files stored on your computer, tablet, or mobile device that are designed to hold a specific amount of data. Their primary purpose is to identify the user (that’s you) so your web experience can be customized. The advertising world relies heavily on cookies to build effective retargeting lists or to serve dynamic creative content. By adding tags to a page, advertisers can track you through a browser or device across different websites, building a fuller, more complex user profile so they can serve you more pointed and targeted messages. Does it work? Most of the time, yes. Today, cookies remain essential to how advertisers target, segment, and build effective audience lists. We see much stronger conversion and click-through rates in retargeting audiences than in prospecting ones and cookies play a central role in helping us identify those audiences.

So why are cookies going away?

One of the reasons cookies are going away is the increasing demand for user Privacy in the digital space. Data breaches and privacy incidents, such as the Equifax data breach and Cambridge Analytica privacy scandal have shown consumers the extent to which companies are collecting, storing, and sharing personal data. Public outcry and media coverage, as well as regulatory pressure from state and federal governing bodies, have prompted tech companies to prioritize user privacy and take more definite action to develop, polish and differentiate their privacy stances. For example, Apple, Brave, and Firefox browsers have all built and rolled out tracker-blocking capabilities, thus limiting cookies.

While cookie elimination is an important topic in the digital space, it is not new—Apple first introduced ITP (intelligent tracking prevention) in 2017 to limit cross-screen tracking by degrading third-party cookies after 30 days. After a few iterations, ITP 2.1 introduced a new set of measures to further user privacy: Safari now purges most first-party cookies after seven days and blocks all third-party cookies by default, rendering device fingerprinting and long-term measurement. Other companies are following suit—the latest addition being Google with its announcement of phased-out third-party cookie blocking on the Chrome browser by 2022. As suspected, this statement by the tech giant has re-invigorated discussion around cookie tracking in the advertising world.

What’s next?

While the industry will have to fundamentally adjust to the ways advertisers collect data, we do not think the shift will result in the total demise of the cookie technology, but rather an evolution of the cookie into something newer, safer, and better! Even though there is no direct replacement for third party cookies, open-and-closed web solutions that are emerging in the space offer a lot of opportunity as to how marketers can run effective programs for clients, from relying more on first-party data and alternative IDs to context and predictive modeling.

As we move away from deterministic models to probabilistic models, we can employ different strategies to replace the cookie. These may include: browser contextual strategies, geo-contextual strategies, and a new set of identifiers. Data clean rooms are also very promising and are beginning to be more widely utilized by advertisers in the space. One example is Ads Data Hub (ADH)—a privacy-first analytics tool developed by Google and propelled by BigQuery. Data in these clean rooms is shared at log-level in a private and secured environment.

Stay tuned for our next blog where we will hear from media experts about what they believe is next.

Interested in learning more? Let’s talk!