Since the dawn of internet commerce, online marketing has been driven by the ability to freely use third-party cookies for user analytics, cross-site/behavioral targeting, retargeting and any other sort of data-driven advertising. Marketing attribution has also been heavily reliant on access to limitless consumer data.
Data-driven marketing attribution has become a key method for marketers to measure the performance of their various marketing channels. By providing an understanding of all the points of contact with the user and their path to purchase, marketing teams can optimize their activity and provide sales with the valuable lead insights they need.
With the phasing out of third-party cookies by the end of 2023, publishers risk being left with a limited view of how each channel or campaign contributed to their sales. And their job becomes even more challenging when looking at multiple ad platforms and sources. In this article, we explore the ramifications of the end of third-party cookies and the ways in which marketers can continue to understand how each channel contributes to revenue moving forward.
The shifting data privacy landscape
The data protection and online privacy movement has grown significantly in recent years. Here are the key moments:
2002: The EU introduces the ePD (ePrivacy Directive), a general regulation covering the confidentiality of information, treatment of traffic data, spam and cookies, amended in 2011 to make cookies subject to prior consent.
2017: Safari launches ITP (Intelligent Tracking Prevention). This has evolved through several versions, and the current 2.3 blocks all third-party cookies across the board and by default. Websites and trackers can’t use login IDs to digitally fingerprint users, and all non-cookie storage data, which includes localStorage, expires after seven days.
2018: The EU’s GDPR (General Data Protection Regulation) comes into effect, a milestone in data protection which aims to regulate the entirety of personal data processing in Europe. Click here to see how the regulation has revolutionized the world of personal data privacy.
2019: Firefox blocks third-party cookies by default with ETP (Enhanced Tracking Prevention), again evolving through numerous versions. The latest 2.0 blocks all social media trackers, cross-site tracking cookies and also isolates remaining cookies, fingerprinters, cryptominers and tracking content (trackers hidden in ads, videos, and other in-page content). ETP 2.0 also clears cookies and site data from tracking sites every 24 hours.
2020: The CCPA (California Consumer Privacy Act) takes effect, exclusively covering the protection of information of California consumers. It is the first of a wave of privacy regulations being implemented across the USA, including the Washington State Privacy Act aimed at replacing the patchwork of current national requirements with a unified standard pitched at a similar level to the GDPR. The key differences with the GDPR include a broader definition of personal information/individual rights and a different fine system.
2021: Apple’s iOS 14.5 update is a new privacy feature for its mobile operating system that will allow iPhone and iPad users to limit the amount of personal data that apps like Amazon, Google and Facebook collect. It enables users to opt out of what is being tracked across different apps.
Anytime from 2021 onwards..? The pending arrival of the ePR (ePrivacy Regulation), in the legislative pipeline since 2017, will complement the GDPR, ensuring that new players providing electronic communications such as WhatsApp, Facebook Messenger and Skype have the same level of confidentiality as traditional telecoms operators. It will also include a standardized and stronger EU-wide set of rules over cookies with a ban on spam emails, calls and SMSs as well as more effective enforcement.
2023: The CPRA (California Privacy Rights Act) is set to take effect. It’s an add-on to the CCPA which will further strengthen the rights of California residents, tightening business regulations on the use of personal information and establishing a new government agency for state-wide data privacy enforcement called the CPPA (California Privacy Protection Agency).
Late 2023: Google Chrome is set to remove support for third-party cookies following a two-year delay. Their stated aim is to counter the “erosion” of user trust and “build innovations that protect anonymity while still delivering results for advertisers and publishers.”
Growing market privacy expectations
In the new privacy movement kick-started by the GDPR and bolstered by the CCPA in the US, consumers are placing increasing importance on the protection of their data. According to Deloitte, 93% of Internet users worry about their privacy online, 45% do not trust companies with their personal information and 89% avoid doing business with companies they believe don’t protect their data. Gartner also reports that 80% of customers say they’re willing to abandon a brand if their data is used without their knowledge.
At the same time, consumers expect increasingly tailored online experiences and are willing to make a “privacy trade-off” with their personal data. The opportunity for marketers is to provide privacy-first personalization that gives consumers full transparency into how their data is being collected and used.
Working with the walled gardens
Tracking users for marketing purposes has never been simple. However, it has been further complicated by the privacy initiatives of the major platforms. Safari and Firefox have had privacy settings in place for several years to prevent users from being recognized across different sites.
Safari’s ITP automatically blocks third-party cookies as well as restricts the lifespan of certain first-party cookies and deletes data stored in local storage after seven days. Firefox’s ETP by default blocks social media trackers, third-party cookies and device fingerprints. It also allows users to increase the level of privacy protection in its settings.
But the real game-changer came at the start of 2020 when Google announced that Chrome will phase out third-party cookies by the end of 2021 (now postponed to 2023). Google aims to create a “Privacy Sandbox” that will replace its current third-party cookie advertising processes such as ad targeting, retargeting, measurement and attribution.
Many regard the move as an attempt by Google to propagate its market share in the non-competitive online landscape and effectively crush small independent players that do not invest in the tech giant, as spelled out in the infamous 2019 Shadow Profiles report. This includes Amazon in June 2021, which blocked Google’s FLoC cookieless tracking and targeting method from gathering data in its valuable e-commerce data pool.
For marketers, the end of third-party cookies means that as of 2023, access to the majority of their valuable consumer data will be drastically reduced.
How will marketing attribution be affected?
Along with the rest of the ecosystem, marketing attribution models will be significantly affected by the changes to third-party cookies. Without the old methodology, it will become far more difficult to identify, target, frequency-cap and measure users and generate consistent user IDs across the funnel. It will also present a challenge for data management platforms (DMPs) and demand-side platforms (DSPs) that rely on cookies to identify, group and target audiences as well as reporting on user behavior and conversions. This means that advertisers and publishers from all verticals will have to move fast, both technically and strategically, to prepare for a world without third-party cookies.
In Piano’s recent ‘How to Win the Post-Third-Party Future’ whitepaper in partnership with Ad Age, Piano Chief Growth Officer Joanna Catalano looks on the bright side. She says publishers need to ask how they can use this opportunity to drive the value of a brand - “Third-party data won’t be completely eliminated, but brands that make a substantial effort to protect their users will reap the benefits. Data is a powerful tool, but considering the sheer number of new platforms and models that are increasingly available, savvy consumers have more than enough choices if their current favorites disregard their privacy,” affirms Catalano. “Third-party cookies have made people lazy and learning how to personalize the ad experience in a post-cookie setting will take some long-term innovation and rethinking about how brands interact with the public and deliver real value exchange to consumers. [Publishers need to] take advantage of the availability of options, take advantage of the fact that there is information widely available. [They need to] be empowered by it, be creative with it and fear not.” she continues.
Marketing attribution beyond third-party cookie deprecation
Despite fears of the impending “cookie apocalypse” over the last year, audience measurement will not only still be possible once third-party cookies are retired, but is likely to improve. Research by the MIT, Group M and the Melbourne Business School has clearly shown the staggering inaccuracy of third-party data. Combined with widespread fraud in programmatic advertising, the vast majority of impressions and clicks used in today’s marketing attribution are from bot activity. Nevertheless, the shift from the traditional attribution methods (although flawed) will be dramatic.
By adopting a zero and first-party data approach, you can significantly overhaul your attribution practices and target your real audiences.
To carry out effective marketing attribution beyond the demise of the third-party cookies, it will be necessary to focus on three key areas:
- Campaign reporting: Marketers and publishers will want to continue to see consistent KPIs for viewability, reach and click-through rate across segments. Without third-party cookies, they can expect to see a decrease in total impressions, but an increase in click-through rate, since the zero and first-party data the industry will use for targeting impressions will be much more reliable.
- Match rate: This will be key to understanding the value of unified identity systems. In other words, how many of the IDs we recognize are also recognized by brands? By observing match rates pre- and post-third-party cookies, you can determine if unified IDs are as reliable as third-party cookies.
- Revenue attribution reporting: The revenue generated from ads and the ability to attribute that revenue to individual pageviews, users, segments, content types and more will be critical. The industry will also need to keep close tabs on the average CPM (the price of 1,000 advert impressions on one web page) pre- and post-third-party cookies as it’s likely that they will go up.
By leveraging first-party data on their users, publishers can offer powerful contextual targeting, which will grow in a post-cookie future. Brands can also tap into site-specific analytics that track user attributes and related campaign performance. Using first-party data, brands may still be able to remarket, albeit at a significantly reduced scale.
The future of marketing starts now
With the end of third-party cookies, the entire digital ecosystem is at a turning point, from media teams to agencies, publishers, platforms and data providers.
From now on, businesses will fundamentally need to rethink the way they use data, not just in terms of privacy policies, but ethically. They need to take responsibility for notifying their customers of how data is used, giving them ways of opting out of those uses and designing the entire ecosystem for the benefit of consumers, with better products, better advertising and more transparency. There is also a need to educate consumers about the positives of handing over their personal data — something that allows publishers to produce higher-quality content, a wider range of products and more relevant and overall less needless advertising.
To survive the cookieless future, both buy- and sell-side need to be proactive in finding the most appropriate approach for their business, starting now. The entire industry must test all the solutions they can and share their feedback with the publishing side, brand side and the tech side. By working together through testing and learning and investing in effective solutions, publishers have a chance to level the playing field with the walled gardens and major media groups and help build an ecosystem that champions transparency and trust.