A lot of talk is going around about third-party cookies and the future of online advertising. Many people are saying that the privacy improvements that Apple is making with iOS regarding Facebook, and the changes that Google is making with Chrome are threatening the success of advertising.
I respectfully disagree. Let’s talk a bit about what these changes are, and then we’ll cover how you can set up your ad accounts for destination marketing that will perform regardless of these changes. It all starts with cookies.
What are third-party cookies?
Cookies are bits of code – that look or taste nothing like cookies – downloaded onto your computer along with the content of the page you’re visiting, that deliver information back to the website you visited and, ergo, downloaded them from. Most websites do this. If you have Google Analytics on your site, you’re doing the same to your visitors – that’s how you get the data in Analytics.
There are a few different types of cookies but there are only two that really matter in the context of this presentation, and they’re key among these changes we’re seeing.
First-party cookies are limited to only the actions you perform on one property (usually a website). Third-party cookies can grab data on what you’ve done on a number of different websites.
Third-party cookies are traditionally the most valuable to advertisers because they follow the visitor’s actions further and can provide more data back to the advertiser. They’re also more helpful to the end-user since they more often provide more relevant advertising, so you don’t have Viagra ads shown to kids or ads for divorce attorneys shown to happily married folks.
But they’re also the ones most under fire and in the process of being phased out. They’ve also become increasingly unreliable over time, so the fact that they’re going away doesn’t really hurt advertisers that much. Their elimination does reduce the amount of data we get in, and we see our cost-per-click go up and our conversions level off, but this has been gradual, with enough time for advertisers to adjust.
The Slow Decline of Third-Party Tracking
This has been going on for a few years now. Back in 2019, Firefox was the first browser to disable third-party cookies by default. You could turn them back on, but why would you?
Safari did the same in 2020, Google plans to have it set by default next year, and Edge… well, who knows. Microsoft’s browser has so few users now that it doesn’t really amount to much data for tracking.
In fact, Microsoft Edge is only used by less than 5% of all users. The behemoth is Google Chrome and the elimination of those cookies on that specific browser signals the end of third-party tracking. We still have first-party – those aren’t going anywhere but as I mentioned, their functionality is limited.
So, what’s the big deal with cookies all of a sudden?
In 2016, the EU passed the GDPR, or General Data Protection Resolution. This required websites with customers in the EU to implement better safeguards with customer data.
Here in the US, and for businesses that market outside of the EU, it didn’t mean much but it did drive websites to put those often annoying consent buttons on their sites. That action put a bigger spotlight on privacy and made people think far more often about what they agree to when they visit websites. Therefore, more attention was given to privacy and tech companies had to respond. Remember, tech companies started implementing blocks on third-party cookies just a few years after GDPR was put in place.
So, what are Facebook, Google, Amazon, etc. doing about this?
Well, mostly,… nothing.
Much of the value that these channels provide is in creating better, more customized user experiences on their own channels. Facebook doesn’t want you to leave Facebook, Google has a ton of properties from search to Gmail to Youtube, so it doesn’t need to worry about third-party cookies.
Let’s start with debunking the iOS 14.5 release that dropped last week, which is hyped as the Facebook killer and the cause of a ton of speculation and rumors. Even Facebook and Instagram got caught up in the hub-bub. making sure to remind users that advertising is what keeps their services free.
Here’s how Apple presented this feature.
The way that this update has been interpreted implies that Facebook can’t make money without third-party tracking, or that this type of restriction may force Facebook to start charging its members. Neither of those could be farther from the truth.
This release includes a feature that, for the first time, allows users to tell apps not to track their activity across different websites. The keyword here is “across”. Remember, first-party cookies aren’t going anywhere. The pages you follow, the ads you click, the websites they link to – they’re all still as viable as they’ve ever been. And when you look at the amount of data Facebook gets at that activity alone, it’s no surprise that they’re going to be fine.
Sure, advertisers will take this into account and in many cases, this change will turn them off to Facebook. In some cases, particularly in e-commerce where things like abandoned cart retargeting is used, this will be more limited. However, if your goals are website traffic and audience growth, you won’t see a huge difference.
Where you will see a big difference is outside of Facebook. Smaller advertisers are going to have a harder time since they rely more on data outside of a controlled system. I’m going to get to how those advertisers can adapt shortly, but let’s talk about what’s happening over at Google.
How Google is Crumbling Third-Party Cookies
The way Google is adjusting to still gathering data is changing slightly. Instead of using cookies, they’re still using your website history (remember, Chrome is a Google product) to group you into what it calls “cohorts”, groups of people segmented by specific interests instead of knowing everything, including your personal data. I’ll get into how this works more deeply in a bit. What’s important to remember is that this approach that Google is taking won’t allow for cookies to be carried over from Chrome to Safari or Firefox. Your Chrome experience will be limited to that browser alone.
It’s important to note that in no way do advertisers have the ability to target you individually. That’s never been the case. You’ve always been part of a cohort, more or less. They can’t track you personally, they can’t catalog purchases you’ve made and tie that information back to you, specifically. Every channel has safeguards that require a minimum audience of thousands before you can move forward with advertising.
The Return of Contextual Advertising
It’s actually an old approach and one that many of you are already taking.
Welcome to the return of contextual advertising. To make sure that everyone is caught up on the concept, contextual advertising is this not-so-revolutionary idea that if you’re on a site with let’s say, recipes on it, in this case, the ads you’re shown are going to be relevant.
It’s common sense, right? It’s like seeing ads for hair products in a beauty magazine. It also gets rid of that “creepy” factor where something you looked up on Amazon shows up everywhere you go.
The simplest way to use contextual advertising is through Google AdSense. This article does a great job of explaining how to set up a Google Ads campaign to do just that.
To sum up, advertising is changing. It always is. The biggest consumer concern right now is with privacy but with getting rid of third-party cookies is nothing to be afraid of. We should all be concerned with relevance and, if that’s been your mission all along, none of these changes will mean much.
We help destinations shift seamlessly into contextual marketing and away from dependence on third-party cookies. Contact us to learn more!