By Stephen DeAngelis
The ubiquitous browser “cookie” has been around since 1992; however, a few of years ago, it appeared the cookie was struggling to survive. In September 2022, Vlad Gozman, Founder and CEO of involve.me, wrote, “The cookie is dying. In response to user privacy concerns, Apple, Google and Mozilla have all announced plans to phase out support for third-party cookies in their web browsers. This will have a profound impact on the digital advertising ecosystem and could lead to the slow death of the cookie.”[1] He added, “The loss of third-party cookies will make it much harder for advertisers to track users across the web and serve them targeted ads. This will lead to less effective advertising and could reduce the overall size of the digital advertising industry. In addition, the loss of cookies will make it harder for publishers to monetize their websites, as they will no longer be able to sell targeted advertising.”
As arrangements were being made to bury the cookie, Google resuscitated it. In July 2024, Google announced that it was canceling its plan to eliminate third-party cookies in its Chrome web browser. Some analysts believe, however, that this latest effort to save the cookie will be in vain. Boston Consulting Group’s Mark Abraham, explains, “Even though this decision means that third-party cookies remain, it’s another step on the long, steady march toward the death of third-party cookies. We’re not there yet, but we’re very much in the twilight of third-party cookies. The fact that consumers will be more easily able to opt out means that companies will simply have access to less of them over time.”[2]
What are Cookies?
Although most people have some understanding of what cookies are, journalist Ryan Browne explains, “Cookies are small pieces of code that websites deliver to a visitor’s browser. They remain as the person visits other sites. These bits of code silently track our online activities, collecting information on what we’re searching for and the kinds of products we tend to buy, for example. They have become a key way for advertisers to fine tune how they target people with ads online.”[3] He reports, “Roughly 40.9% of websites globally use cookies to gather data on users.” Browne indicates there are two principal arguments for keeping cookies alive. The first argument, he writes, is convenience. “Put simply, they can make it more convenient for users navigating around the internet as the ads displayed on devices for shopping are more tailored to a user’s interests.” The second argument in favor of cookies is economics. Browne explains, “They help the web remain free to use — many publishers introduced paywalls and invested in sponsored content in response to the anticipated phase-out of cookies.”
The effort to kill cookies was primarily a response to growing concerns about online privacy. Firefox and Safari have already eliminated third-party cookies. Google, however, found that cookies are hard to kill off. As a result, Google changed its cookie strategy. Anthony Chavez, Vice President of Google’s Privacy Sandbox, explained, “Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators, and will engage with the industry as we roll this out.”[4]
Whether Abraham is right, and cookies are living on borrowed time, or cookies unexpectedly survive after all, James Heimers, Senior Vice President of Analytics at RAPP, says preparing for a cookieless world isn’t wasted effort. He explains, “Those [companies] that have invested in tools to thrive in a post third-party cookie environment are well equipped now with more efficient and effective media strategies. … The initial move to phase out third-party cookies had pushed brands to adopt more privacy-focused communications. And the momentum towards new, privacy-centric advertising technologies continues.”[5]
Life After Cookies
With regulators more concerned about privacy every year, and with greater scrutiny of browsers, Boston Consulting Group (BCG) analysts believe companies should adopt cookieless media practices sooner rather than later. They offer a few suggestions about “how companies can revamp their marketing playbook to succeed with — or without — cookies.” Those suggestions include:
● Maximize first-party data. “Leading companies are investing to build digital relationships with their existing customers through their own apps and websites. They can identify customers through an email or login and track their transactions and browsing history directly — data that is the gold standard for understanding consumer behavior.”
● Look at zero-party and second-party data as well. “Increasingly, companies supplement first-party data with what is known as zero-party data, which entails directly asking consumers about their preferences. … In addition, companies can use second-party customer data, which comes from partnerships that companies strike with brands that have a similar customer profile.”
● Win the battle of loyalty programs. “Loyalty programs have exploded in the last several years, with new programs launching and existing programs seeing major redesigns to attract members, boost sales, and capture customer data.”
● Get better and faster at testing new campaigns. “Experimentation is becoming critical in precision marketing, and companies need to build strong capabilities in rapid measurement and automation. Quite simply, the brands that test more campaigns and learn from them faster will win.”
● Don’t alienate consumers by overwhelming them. “Spam abounds, and generative AI makes marketing content even easier to generate, meaning the problem is likely to get worse. But just because companies can send a marketing message to consumers doesn’t mean they should. A recent BCG analysis found that about two-thirds of consumers have received an inaccurate or inappropriate marketing message in the last 30 days. Without curating marketing outreach and targeting consumers accurately, brands are at risk of alienating them — and losing their business forever.”
On the other hand, leveraging AI capabilities, like the Enterra Consumer Insights Intelligence System™, will be essential to navigate the changing marketing landscape. This System allows clients to quantitatively uncover and logically understand the inter-relationships that lead to heightened consumer understanding, hyper-personalized product recommendations, and new product innovation.
Concluding Thoughts
Heimers writes, “Globally, regulators are tightening data privacy laws. The European Union’s Digital Markets Act and Digital Services Act are examples of legislation catching up with technological advances, including stipulations that may influence how data is collected and used across platforms. Such regulations are not only pivotal in Europe but also serve as benchmarks that could influence global policies.” He concludes, “The clear winners will be those who successfully integrate strong privacy practices without sacrificing the effectiveness of digital marketing strategies. These companies will build better relationships with consumers by prioritizing transparency and ethical data use. Conversely, those who fail to adapt to increasing privacy demands may find themselves disadvantaged, unable to compete effectively without embracing innovations in data privacy and targeted advertising.” I agree with that assessment.
Footnotes
[1] Vlad Gozman, “The Slow Death Of Third-Party Cookies,” Forbes, 12 September 2022.
[2] Staff, “Google’s Latest Decision Keeps Cookies Around—for Now,” Boston Consulting Group, 1 August 2024.
[3] Ryan Browne, “What Google’s decision to keep cookies means for the internet,” CNBC, 23 July 2024.
[4] Jennifer Elias, “Google cancels plans to kill off cookies for advertisers,” CNBC, 22 July 2024.
[5] James Heimers, “Google’s Cookie isn’t crumbling after all… implications for marketing,” TechRadar, 26 September 2024.
