Data privacy protections are killing the cookie. So what does that mean for digital tracking and advertising?

How do cookies work?

Invented at the inception of the world wide web, cookies have been tracking all of your clicks for the past 20+ years. In short, cookies are small text files that store data on your browser. 

There are two types of cookies. First party cookies are triggered on the actual site you are visiting. Set by the host domain, these trackers are designed to create a better user experience such as saving your login information or items in your cart. 

Third party cookies are the ones that follow you around as you surf the web. Installed by a domain other than the one you are visiting, these are triggered by any website that loads that 3rd party server's code. Mainly used for cross-site behavioral tracking and advertising, 3rd party cookies are the ones that are crumbling.

Why are they disappearing?

Safari and Firefox have already been phasing out of third party cookie tracking for a few years now. In fact, 30% of the web is already cookie-less. So it comes as no surprise that Google is moving this direction as well, compounded with increasing scrutiny by governments around the world. 

Privacy legislation in the US is also picking up quickly, with Nebraska and Virginia following behind California to adopt consumer privacy laws. The EU started enforcing GDPR back in 2018. So as governments are finally getting up to cyber speed, browsers are looking to abandon 3rd party tracking altogether. 

Who’s in charge? Industry Initiatives:

At the moment there are lots of cookie replacement solutions floating around. One thing is for certain, there needs to be KPI and measurement standards across the digital advertising space. So who is spearheading these initiatives and what do they want?

The IAB Initiative Project Rearc is attempting to build a framework for universal standards. A collection of reps from 400+ companies globally will be collaborating on new post cookie technical guidelines. Their goal is to harmonize privacy, personalization and community.

Other working groups are also contributing proposals such as (WFA) World Federation of Advertisers. Many companies are coming together to ask questions and make changes. A giant slice of that is steered by Google itself. 

Overall, all of these groups have the same goal. Standardized approaches to building audiences out of 1st party data. Figure out how to handle and leverage data sets for emerging identifiers like email/crm. Updating measurement best practices and creating consistency in measurement standards. And, hopefully, attempting to create a level playing field whilst supporting consumer privacy.

With all of that said that has been some push back. There are growing concerns around Google’s true intentions. Are they killing the cookie truly out of privacy tracking issues or are they trying to reach for a larger slice of the ad market? Both the American Association of Advertising Agencies and the Association of National Advertising released a statement criticizing the removal of the Chrome 3rd party cookie.

“Google’s decision to block third-party cookies in Chrome could have major competitive impacts for digital businesses, consumer services, and technological innovation. It would threaten to substantially disrupt much of the infrastructure of today’s Internet without providing any viable alternative, and it may choke off the economic oxygen from advertising that startups and emerging companies need to survive.” - Statement

What will replace the cookie?

So, what are all of these groups proposing? There are a few different ideas floating around the digital space at the moment with, of course, Google leading the charge. 

Google FLoC & Sandbox

The Google team strongly believes that regulations will eventually get rid of tracking identifiers altogether. They are leaving them behind and pivoting to an entirely new method. Their solution has been dubbed the Federated Learning of Cohorts, or FLoC. Curated around interest-based advertising, FLoC essentially uses aggregation, on-device processing and machine learning to place users into “cohorts.” Individual Chrome users will keep anonymity within large groups of people with common interests.

Google has also implemented their Privacy Sandbox with the goal to “build out innovations that protect anonymity while still delivering results for advertisers and publishers.” 

Server-Side Tracking

Bring it all in-house. Why rely on another platform to build your audiences when you can do it yourself. Now, it’s a little more complicated than just DIY audience building. There is a lot of upfront cost and buildout to creating your own server set up. However, you have more control of the data and better security. 

Alternative Identifiers

While Google pulls away from identifiers entirely, another post 3rd party cookie idea is to still use an identifier, just not an IP address. Instead advertisers would target an audience based on deterministic data sets like CRMs or email addresses. This is an opportunity for clients and publishers to utilize a more persistent targeting based on actual people instead of browser devices.

Two of the biggest names in the cookieless targeting space are LiveRamp IdentityLink and Tradedesk Unified ID. Both of these platforms are offering better approaches to targeting consumers with a” unique, privacy-safe identifier.”

Data Clean Rooms

Your search information could also be stored in what the industry is terming “data clean rooms.” Here your email or alternative identifier is encrypted or “hashed” and put into cohorts of users based on similar actions or interests.

However, this can lead to issues with “Walled Gardens,” or the fact that all of the information will siloed to individual platforms. And while there will be channel-agnostic clean rooms, they may come with a steep price.

How is Oodle leading the way?

Our first bit of advice is don’t panic. First party tracking is still here. You will still continue to see all of the data-rich insights from your website. This allows you to keep creating and updating a strong UX for your visitors. 

Oodle Partner Ryan is optimistic about the future of cookieless tracking: “They’ve needed an overhaul for a long time. No more probabilistic data. We’re removing all the bullshit.”

The Oodle team has been actively researching new tracking rollouts and participating in beta testing when available. Our suite of vendors and tools are providing us with tons of data to comb through and develop the best possible tracking solutions for our clients.

Drop us a note here if you’d like to dig more into how the end of 3rd party cookie tracking may impact your marketing efforts.