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2022 will bring huge changes to the world of online marketing as Google moves to eliminate third-party cookies from the internet. In January 2020, Google announced its hugely popular Chrome browser would follow Apple’s Safari and Mozilla’s Firefox browsers in blocking the use of third-party cookies.
Third-party cookies have been the cornerstone of online marketing efforts for years. Their elimination from the Google Chrome user experience effectively means the death of third-party cookies. So why does this represent such a gigantic change for online marketing and what will online marketing look like after the cookiepocalypse?
Third-Party Cookies are small pieces of data that are downloaded to a user’s computer by their web browser. First-party cookies are generally very useful to users. First-party cookies are how websites seem to recognize users when you visit their page. They store details such as the username used to log into a website.
Third-party cookies are downloaded by the browser from a source other than the website being visited. Most commonly, these will be downloaded when advertisements appear on a website. These third-party cookies can build a detailed picture of a user’s online browsing history. This data is what drives the type of target advertising which means that advertisements the user sees on websites reflects things they are likely to be interested.
This data collection has become increasingly controversial in recent years. Legislation has been acted to restrict this mass collection of user data through third-party cookies. Most significantly, the European Union introduced legislation dubbed the General Data Protection Regulation (GDPR) in 2018 which requires websites to obtain explicit consent from users before using cookies to track their browsing history.
But with Google confirming Chrome will block the use of third-party cookies from 2022, the age of third-party cookies is coming to age. This represents a huge shift for all businesses which use online marketing. So what are the alternatives to targeted advertising through the use of third-party cookies?
1. Google FLoC
When Google announced Chrome’s move away from third-party cookies in January 2021, the online search giant also proposed its own alternative: Federated Learning of Cohorts (FLoC).
Instead of using third-party cookies to build a picture of each individual’s browsing history, FLoC groups users together based on their interests. This anonymizes the data to a much greater extent than third-party cookies. Google is pushing FLoC as a more privacy friendly alternative to third-party cookies which still allows highly targeted online advertising.
Not everyone is a fan of FLoC. Almost all major competitors to the Google Chrome browser have said they won’t enable the use of FLoC as a third-party cookie alternative. Opera, Apple, Microsoft, and Firefox creators Mozilla have all issued statements saying they have no plans to implement FLoC within their browsers at this time. However, this may change as we move closer to the 2022 end date for Chrome’s use of third-party cookies.
The creators of the Brave browser have gone even further, stating that FLoC “materially harms user privacy, under the guise of being privacy-friendly” and Brave will not “will not support the FLoC API and plan to disable it, no matter how it is implemented.” Brave’s statement claims that FLoC “does not protect privacy and it certainly is not beneficial to users, to unwittingly give away their privacy for the financial gain of Google.”
PARAKEET is an alternative to Google’s FLoC which is being developed by Microsoft and Harvard’s Institute for Quantitative Social Science (IQSS) and the School of Engineering and Applied Sciences (SEAS). PARAKEET is similarly intended to enable targeted advertising without specifically tracking each individual user’s browsing history.
PARAKEET is an acronym for Private and Anonymized Requests for Ads that Keep Efficacy and Enhance Transparency. Like FLoC, Microsoft‘s proposal seeks to target users based on their similarity to other users. It limits the collection of individual identifiable data which has made third-party cookies so controversial.
Documentation released by Microsoft on GitHub claims that PARAKEET will operate similarly enough to third-party cookies to cause minimal changes for those serving targeted adverts while also increasing user privacy.
Both FLoC and PARAKEET are currently in the development phase. Like all technological format wars, it will take some time to see which of the two is more widely adopted and whether both can co-exist.
3. Walled Gardens
Targeted advertising allows all kinds of website to monetize content which is provided to users for free. As the common online maxim goes, when the service is free, the product is the user.
The websites of newspapers such as The Wall Street Journal, Washington Post, and New York Times already require users to pay a subscription fee to access their content. The elimination of third-party cookies may push more online content hubs to created walled gardens of paid content.
This approach can be effective for sites which already have a large userbase and widespread brand recognition. However, it will be much more difficult for less well-known online entities to seek funding through this model.
4. Contextual Advertising
Contextual advertising is already a very effective monetization strategy for many online content creators. Things such as sponsored Instagram posts and YouTube videos fall within the realm of contextual advertising.
Before Google’s announcement regarding third-party cookies, policy changes for its YouTube video sharing platform have already caused content creators to move toward this model. Many YouTube content creators have outspoken about how moves to demonetize videos based on controversial content or copyright claims have caused them to lose a large source of their income.
Reaching out to websites and content creators who serve a similar audience could be a very effective alternative to targeted advertising based on the data gathered by third-party cookies.
There is also a rapidly developing movement to use artificial intelligence and machine learning to make widespread contextual advertising more effective. The Yandex browser is more popular than Chrome in its home country of Russia. Yandex is one of several companies seeking to use deep learning techniques to more effectively analyze the content of webpages in order to more effectively serve contextual advertisements.
5. First-Party Cookies
The death of third-party cookies doesn’t mean cookies will no longer be an essential part of the online experience. First-party cookies will still be used to recognize users when they log into a website. Data such as the user’s email address can be used instead of third-party cookies to serve targeted advertisements to each user.
Unified ID 2.0 is an open-source system currently being trailed to use this first-party data to better serve advertisements. Spearheaded by online marketing company The Trade Desk, Unified ID 2.0 requires users to opt-in to having their website activity used to serve targeted advertisements. Websites including Buzzfeed, Foursquare, and Newsweek are part of the Unified ID 2.0 beta trial.
Google and others have dismissed this alternative to third-party cookies, saying these proposals do little to better protect user privacy.
A World Without Third-Party Cookies
Google’s announcement of the removal of third-party cookies from Chrome means a huge change is coming to the world of online marketing. It is vital that all companies which use targeted online advertising carefully consider the alternatives.