How could a household baked good betray me? While I often find myself asking this question by mistaking an oatmeal raisin cookie for a chocolate chip, we’re actually talking about a different kind of cookie. On your computer, cookies are small text files that websites you visit save to your web browser or hard drive. Cookies often improve your web browsing experience such as remembering you added that item to your shopping cart but changed pages or remembering your login information. However, in the current user privacy and regulation renaissance, we are seeing a drastic shift away from the use of third-party cookies that bolster a billion-dollar advertising industry.
The above cookie examples like login information or shopping cart activity seem fairly innocuous and helpful, right? That’s because these are first-party cookies, not third-party cookies. First-party cookies come directly from the website you are visiting and are only stored on that domain. On the other hand, third-party cookies are created by other domains than the one you’re visiting. This allows other companies to build a browser profile for you based on your browsing behavior, shopping habits, or even interests. This kind of cookie data has been a foundational rock for the advertising industry recently by letting them reach the desired niche of users based on their previous behaviors or interests.
So is User-Targeted Advertising Dead?
Not at all; it’s simply evolving. This evolution has been expected for some time. Safari and Firefox, two of the most popular web browsers, have announced this removal of third-party cookies for years. However, given Google Chrome’s market dominance, their announcement of phasing out third-party cookies by December 2022 is what’s pressed the topic to the forefront.
Given this runway, a new process for targeting users will need to be defined, but is it the level playing field we all want?
What We Know of the New Era
In announcing the end of third-party cookies, Google of course came prepared to show their solution as well; Privacy Sandbox. The privacy sandbox is a cookie-free alternative that will give advertisers anonymized information different from before.
With a little less than two years until third-party cookies leave, Google is making this information available in a sandbox format (where anyone can read and understand what the future holds) so that they don’t surprise stakeholders, unlike Safari and Firefox. At the most basic level, rather than run through cookies, the information will be passed through a series of web browser application programming interfaces (APIs). So far, these APIs include:
- Trust “token” verification – An alternative to CAPTCHA for security and reducing fraud risks.
- Conversion measurement – Informing an advertiser if a user saw or clicked on an ad. This allows return on investment (ROI) to be measured but doesn’t compromise user-specific information.
- Aggregated reporting -Condensing information across websites into a single, anonymizing report. This breaks away from cross-site identifiers like cookies.
- Privacy budget – Capping the total amount of information a website can pull to ensure that a user can not be identified nor shared with third parties.
- Larger grouping of interests – Rather than target an individual’s interests, this lets advertisers learn the behaviors of a larger group of similar individuals. This is being called the Federated Learning of Cohorts (FLoC) similar to a flock of people.
- Individual interest-based anonymization – Advertisers won’t have the interests of a user, but the browser will. These interests can’t be combined with other information or learned from. To note, this is being called “Two Uncorrelated Requests, Then Locally-Executed Decision on Victory or ‘TURTLE-DOV.’”
Bringing all of this together, it means that your web browser works for you and only passes along information deemed as anonymous as well as a budgeted amount.
As I’m sure you’re wondering, “shouldn’t my web browser always have been working for me? And if Google was part of the problem, how can they be the solution too?” This transition away from third-party cookies does create a new wave of user privacy unlike before, but it is unfortunate that it took this long. With the transparency in the sandbox, it takes a certain level of faith that Google will not tip the scale in its own advertising platform’s favor. As a leader in both the web browser and advertising world, questions are and will continue to be asked to make sure their platforms are subject to the same data permissions.
From a user perspective, this doesn’t change how you use the browser at all. For advertisers, this change is gradual and will continue to be monitored and understood as it gets closer. Advertisers and businesses alike will continue to want to ensure a strong ROI through these changes.
Creating a Marketing Strategy with User Privacy in Mind
This stands as a great reminder to continue a balanced approach in advertising and marketing by investing in other strategies like content marketing, social media marketing, or even search engine optimization. If your business needs help with this balanced digital diet without all the cookies, our team of digital marketers is here to help.