In the dynamic realm of digital advertising, where innovation is the norm, the winds of change are blowing once again. The recent announcement of the deprecation of third-party cookies in Google Chrome marks a pivotal moment in the history of online advertising. With this step, Google is following the lead of Safari and Firefox by phasing out third-party cookies to protect user privacy better. 

With the deprecation of third-party cookies, the industry is transforming significantly. Privacy concerns and regulatory changes are steering advertisers towards relying more heavily on first-party data, contextual targeting and embracing innovative technologies like Google’s Privacy Sandbox. This shift aims to balance personalized advertising with user privacy, providing advertisers with a targeting option in a more secure environment. 

The ubiquitous third-party cookies have been a cornerstone of digital advertising for decades. In this blog post, we discuss the anticipated effects of third-party cookies deprecation on targeting and analytics pipelines for display ads and how to measure them.

What are third-party cookies and how are they used in display ad campaigns?

Third-party cookies are small pieces of data that are created by domains other than the one a user is currently visiting. They are often used for tracking and collecting information about a user’s browsing behavior across different websites. In the context of display ad campaigns, third-party cookies play a significant role in ad targeting and retargeting. To a certain extent, they contribute to better performance of programmatic display ad campaigns but can also lead to the emergence of, often by users negatively perceived, display ad bubbles.

Here’s how third-party cookies are commonly used in display ad campaigns:

• Targeting and Personalization:
  • Advertisers use third-party cookies to track users’ online activities and build user profiles. These profiles include information about the websites visited, the content viewed, and the products or services of interest.
  • This information is then used to target users with more relevant ads based on their preferences and behaviors. Advertisers can deliver personalized content to specific audience segments, increasing the likelihood of engagement.
• Retargeting:
  • Third-party cookies enable retargeting campaigns, where users who have visited a particular website but did not convert (e.g., make a purchase) are shown relevant ads when they visit other websites. This is achieved by recognizing the user through the third-party cookie and delivering targeted content.
• Frequency Capping:
  • Advertisers use third-party cookies to manage ad frequency, ensuring that users are not bombarded with the same ad repeatedly. This helps maintain a positive user experience and prevents ad fatigue.
• Cross-Device Tracking:
  • Third-party cookies are also used to track users across different devices. This allows advertisers to understand a user’s journey and deliver consistent messaging across various platforms, such as desktops, smartphones, and tablets.
• Analytics and Measurement:
  • Advertisers leverage third-party cookies for analytics and measurement purposes. They can track the performance of their ads, including impressions, clicks, and conversions. This data is crucial for optimizing campaigns and assessing the return on investment (ROI).

Why are third-party cookies being deprecated in Google Chrome?

The use of third-party cookies has faced increased scrutiny due to privacy concerns. In response to these concerns and evolving regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), major web browsers and technology companies have taken steps to limit or eliminate the use of third-party cookies. This shift is prompting the advertising industry to explore alternative methods for targeting and measurement that prioritize user privacy.

The main reasons for the deprecation are:

• Privacy Concerns:
  • Privacy concerns have been growing globally, and there’s an increasing emphasis on protecting user privacy online. Third-party cookies have been criticized for enabling cross-site tracking without users’ explicit consent.
• User Control and Transparency:
  • Users have become more conscious of their online privacy, and there’s a demand for greater control and transparency regarding how their data is collected and used. The deprecation of third-party cookies aligns with the industry’s shift toward prioritizing user privacy and providing users with more control over their online experience.
• Regulatory Landscape:
  • Privacy regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States, have imposed restrictions on using personal data for tracking and targeting purposes. Adapting to these regulations is a part of the motivation behind the move away from third-party cookies.

What is the timeline for phasing out third-party cookies?

Google announced that it will deprecate third-party cookies for 1% of Chrome users from Q1 2024 to facilitate testing and ramping up from there with the goal to reach 100% towards Q2 2024. Such a significant change makes it worth for advertisers to look closer at the effect the third-party cookie deprecation will have on running display ad campaigns.

Anticipating Changes and Challenges for Advertisers

Phasing out third-party cookies will disrupt the operations of advertisers depending on this technology for targeting their display ad campaigns and measuring their effectiveness. The Privacy Sandbox is an initiative by Google to address privacy concerns related to third-party cookies while still enabling targeted advertising and measurement. It involves the development and implementation of new web standards and technologies to strike a balance between user privacy and the needs of advertisers.

Replacing third-party cookies with the Topics API for ad targeting

The key component of the Privacy Sandbox when it comes to targeting is the Topics API.

• How It Works: The Topics API allows websites to declare the topics they are about or the content categories they cover. With the Topics API, the browser tracks these topics while the user is surfing the Web and creates an interest-based profile. Advertisers can then use this information to deliver relevant ads, similar to contextual targeting.
• Privacy Implications: By relying on declared topics rather than tracking individual user behavior, the Topics API aims to provide a privacy-friendly method for ad targeting. Users’ interests are determined based on the content they are actively engaging with, without the need for persistent identifiers like third-party cookies.

It’s important to note that these technologies are part of ongoing efforts, and their implementation and impact may evolve over time. The goal is to create a more privacy-centric advertising ecosystem that still allows advertisers to reach their target audiences effectively. Advertisers and web developers should stay informed about updates and changes in the Topics API and related solutions. We consider the following three solutions as the most promising complementary solutions for the Topics API:

• First-Party Data:
  • Advertisers can focus on collecting and leveraging their own first-party data, which is data directly obtained from their users with their consent. Building direct relationships with users allows for personalized and targeted advertising without relying on third-party cookies.
• Server-Side Tagging:
  • Advertisers can explore server-side tagging, where data processing happens on the server rather than in the user’s browser. This approach can provide more control over data and reduce reliance on client-side cookies.
• Contextual Targeting:
  • Instead of relying on individual user data, advertisers can target ads based on the context of the content a user is currently engaging with. Contextual targeting considers the topic or theme of the webpage a user is on, ensuring that ads are relevant to the content being viewed.

Impact on Analytics Pipelines

Disrupted Analytics Pipelines:

Traditional analytics pipelines relying on cross-website tracking face disruption with the deprecation of third-party cookies, necessitating adaptation to new measurement methodologies.

Limited User Tracking Across Websites:

Privacy-focused measures limit the ability to track users across different websites, requiring recalibration of strategies for understanding user behavior and preferences.

Targeting Strategies in Flux:

Conventional targeting strategies face challenges with the shift, posing hurdles in maintaining the same granularity in targeting based on comprehensive user profiles.

Impact on Personalization:

Personalized ad experiences, driven by third-party cookies, undergo a shift, necessitating a focus on first-party data and contextual targeting offered by innovative solutions like the Topics API.

Measuring the Change 

It is yet to be seen how targeting will change with the deprecation of third-party cookies. Many innovative solutions for privacy-preserving user tracking are being developed, with the Topics API being the most promising. As third-party cookies are being phased out, seize the opportunity to measure the effects on your and your competitors’ display ad campaigns.

Seamless Transition into the Cookieless Future with AdBubble:

• Monitor in Real-Time: Gain real-time insights into display ad campaigns, allowing adaptable strategies.
• Competitive Analytics: Understand competitor strategies, uncover market dynamics, and refine approaches for success.
• (Re-)targeting Excellence with Topics API: AdBubble equips advertisers with tools for (re-)targeting based on the Topics API, ensuring relevance and engagement in a first-party cookie-constrained environment.

AdBubble, your reliable companion in times of change, offers a free case study to test (re-)targeting strategies, e.g., with the new Topics API. Book a demo today and empower your team to adapt, optimize, and succeed in the new cookieless era.

Are you looking for a tool to secure a seemless transition into the cookieless future?

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