Announced by Google and feared since 2020, the end of third-party cookies has now become a reality. This Thursday, January 4, 2024, marks the beginning of tests for the removal of third-party cookies by Google Chrome.
While an ordinary user may not necessarily know what it entails when faced with a consent banner, marketing professionals know that third-party cookies were very useful for creating audience profiles, personalizing content, and measuring the impacts of advertising campaigns.
Without these cookies, targeting individuals becomes more complex, foreshadowing an alarming cost increases for advertisers. According to a study by McKinsey, companies unable to use their 1st party data and replace 3rd party data may have to spend up to 20% more to generate the same revenue. The most alarming predictions even speak of potential revenue loss up to 50%.
But then, how to prepare for this new "cookieless" era to avoid seeing marketing costs skyrocket?
Here is your comprehensive overview of the reasons behind Google Chrome's removal of third-party cookies, the expected impacts, and the solutions to be considered.
Why end third-party cookies?
💡 if you're not sure what they are, take a look at our resource on how cookies work.
The end of third-party cookies is mainly due to growing concerns about privacy. This issue is not new, and the advertising environment has already been heavily impacted by:
The tightening of GDPR and CNIL regulations, requiring the display of a cookie acceptance banner to all visitors of a website (approximately 25% loss of information).
The increasing use of ad blockers (approximately 25% loss of information).
The end of third-party cookies on Safari and Mozilla (accounting for 30% of internet traffic in France today).
Less and less information are available for marketing purposes
The end of third-party cookies on Google Chrome is even more concerning, as the browser is the most widely used in France. With these new restrictions, the proportion of information ultimately available to advertisers could fall to 10% of the initial information.
Chrome plans to disable third-party cookies for 1% of users starting today (January 4, 2024) to facilitate tests on the Privacy Sandbox, then increase the capacity to 100% of users from the 3rd quarter of 2024.
Timeline for third-party cookie depraction
Google presents a series of good practices to be implemented immediately to prepare your sites for this change.
What are the impacts of the end of third-party cookies?
The consequences of the end of third-party cookies are significant and require a thorough review of the marketing methods used so far.
Until now, third-party cookies were mainly used for:
Retargeting: a classic marketing technique that involves targeting a person who has already interacted with the brand. For example, a user may view a product on an e-commerce site and leave without making a purchase. Later, they could browse Instagram and see a sponsored ad banner for the product they previously viewed. Without third-party cookies, Instagram cannot easily know who viewed the product and therefore cannot associate it with its account for retargeting.
Acquisition, through lookalike campaigns: this acquisition technique targets people "similar" to a brand's best buyers. Without third-party cookies, it is no longer possible to know a user's browsing history, making it difficult to determine if they are a "digital twin" of a top buyer or not.
Performance measurement, especially to understand the impact of digital advertising through post-view conversion attribution. Without third-party cookies, it is no longer possible to know which banner/video was seen by whom, making performance analysis complex.
Thus, the impacts of the end of third-party cookies are significant: advertisers have less visibility on the performance of their digital activations and will suffer from significant revenue declines.
However, the end of third-party cookies should not be perceived as the end of personalized marketing. A new era is opening up, with new work methods to explore.
On average, 10% of the CAC is spent on existing customers
What are the solutions to cope with the end of third-party cookies?
Collecting and using first-party data to limit cost escalation
The end of third-party cookies means limited access to data. It is then essential to invest in collecting clean data to better understand your audience. However, optimizing data collection is crucial for successful strategies based on 1st-party data.
If you are not authorized to use your data for your marketing use cases, your collection will simply be useless. Unfortunately, from a simple opt-in collection by channel to a goal-based collection, the volumes of collected data can change significantly.
It would be foolish, however, to miss out on such a gold mine. Companies can encourage customers to voluntarily provide personal information in exchange for certain benefits (newsletter, loyalty program, special offers, etc.). A good content strategy, favoring the collection of personal data, is a simple response to the end of third-party cookies.
After collecting a large amount of data from various sources (CRM, stores, website, etc.), it is essential to centralize them in a single source of truth. Using the same data in all tools is important for a unified and up-to-date view of customers. Highly promoted by companies, cloud data warehouse solutions such as Google BigQuery or Snowflake perfectly meet this need.
All data can be stocked in the data warehouse
Using first-party data allows for new marketing strategies, such as using high Lifetime Value (LTV) audiences or new possibilities for marketing automation. To navigate this new cookie-less era successfully, it is essential to send all your data, both CRM and conversions, to advertising platforms.
To send conversions data to your platforms, use Conversions APIs! Check our Guide on Meta Conversions API or Google Enhanced Conversions API.
The end of third-party cookies also means new experiments. It's time to explore new horizons and strengthen your multichannel strategy. The key to success lies in clearly defining your goals and understanding your target audience, again thanks to your 1st-party data.
Several targeting options are also beginning to stand out: the use of a universal ID, the new boom of contextual targeting, and the arrival of cohort-based solutions, to name a few.
Alternative measurement solutions
Adopting new marketing strategies is good, but being able to measure results is crucial to know which ones to deepen or abandon.
The shockwave caused by the announcement of the removal of third-party cookies has led to new measurement alternatives emerging:
Unique but diversified identifiers (especially universal IDs) allow tracking a user across different sites and even different devices. They can track a customer's purchase journey and help guess what potential interactions they may have had with the brand.
Marketing Mix Modeling, an analytical technique used to assess and optimize the effectiveness of different marketing levers of a company, is increasingly used. Although existing since the 1950s, it is now favored as it does not rely on individual tracking. It can be more or less complex, relying on multi-linear regression techniques or Bayesian models.
The use of Google Chrome's Privacy Sandbox will enable the analysis of campaign performance on conversions. This suite offered by Google consists of a set of APIs (FLoC for cohort targeting, Topics for interest-based targeting, and Attribution Reporting for measurement) and will be fully available in Q3 2024, date of the end of third-party cookies.
Other methods include declarative-based approaches, advertising attention analysis (eye tracking), data clean rooms, etc.
We can only advise you to explore these new methods to determine which one suits you best.
Conclusion
The end of third-party cookies is near, and taking a lead is essential. It is important to explore new alternatives today: new channels, new A/B testing campaigns, and new exploited data.
At DinMo, we help you use your 1st-party data in all your tools. If you want to learn more, feel free to contact us.
