Performance

Cookieless future – is this really a shift towards privacy?

Soma Tóth

Senior Programmatic Consultant

November 8, 2021

4 min read

Google announced back in 2020 that it would change the backbone of online advertising by phasing out third-party cookies from Chrome browsers in the next few years in order to create a safer, more sustainable, and more private web. Proposed as the Privacy Sandbox, It was first projected to take place in 2022. Later, the transition was extended to mid-2023, mainly because of regulatory pressure to fix the rising concerns about the developing technology over privacy. Anyway, we now have a monthly updated official schedule by Google. In this article, you will find answers to what is expected to happen, how it will affect your online business and what you can do now to be prepared.

What’s this technical stuff about browsers and tracking? Does it actually affect the online presence and advertising of my online business and webshop?

Yes, it actually will affect you as well, to a great extent. Google will go further than its competitors: they will eliminate the current cookie technology for good, and will introduce alternative technologies with similar functionality, but with greater emphasis on privacy. All in all, there’s no turning back or avoiding the upcoming changes.

You may remember the panic over ad blockers some years back, or the ongoing struggle with GDPR compliant cookie consent boxes. This time, the tide is expected to be even greater by this transition, because advertising technology will completely change for good.

We’re only talking about Chrome, right? Then people will change to other vendors and that’s all!

Well, on one hand Chrome is the sole market leader, with a market share around 65%. Besides that, its engine, Chromium, is used by many other browsers too, such as Microsoft Edge and Opera. What’s even more, competitors such as Firefox and Safari have already implemented similar privacy policies and they block third-party cookies by default. Solutions, like when Facebook managed to find a workaround to mask its pixels as they were first-party cookies in Safari browsers won’t work either any more.

Google will step further, and completely eliminate this technology that was, ironically, created and popularized by them in the first place. Even more, some experts feel that with these steps, Google will only monopolize the market even more by sweeping out its competitors and blocking any other alternative technologies, such as The Trade Desk’s unified ID.

All right, I see. So what’s the privacy concern with cookies?

Privacy Sandbox is made to eliminate the ability of individual, 1:1 tracking and identification of users, also called “fingerprinting”.

As of today, online advertising is mostly reliant on so called (third-party) browser cookies. These are basically simple short text files containing an identifier and an expiry date, that are created when you visit a website, and then stored on your device for a specified time. Advertising cookies usually are stored for a month.
There are two main types of cookies, first and third party cookies. First party ones are created directly by the website you are visiting, and these enable essential functions for the page to remember your login data, or items added to your cart.
Third-party cookies are created by other services, not by the visited domain itself. These play a crucial part in online analytics and advertising, enabling retargeting, cross site-conversion tracking, or profiling. An example:

First-Party Cookie: A user visits www.mito.hu and a cookie is created by www.mito.hu to store some settings made by the user

Third-Party Cookie: A user visits www.mito.hu and a cookie is created by ad.doubleclick.net or facebook.com, with the purpose of assigning the user to audience pools that later retarget them with personalized messages.

Each advertising service has fancy names for their trackers, such as Google’s Floodlight, Linkedin’s insight tag or Facebook’s pixel. Don’t be fooled: they are all simply third-party trackers.

All right, so what will take over browser cookies exactly?

I don’t want to get too technical, but let me briefly introduce the new technology. Privacy Sandbox itself is a set of APIs through which online services will be able to communicate with Chrome-based browsers. As Google states: “the fundamental principle of the Privacy Sandbox is that the browser can create a protected space around the personal data you share with the websites you visit”. In other words, Chrome browsers will go on gathering (a lot of) information about you, the difference will be that you won’t be completely recognizable by third parties. FloC (Federated Learning of Cohorts) is the most common abbreviation you may have come across regarding new technologies and controversies as well. This is one of the APIs I mentioned before, which is developed to replace in-market and affinity audiences, by anonymously assigning similar users to groups (cohorts) based on their browsing history. However, some argue whether this technology is any safer and Google has started considering switching their approach.

Diving deeper into technicalities will be the topic of an upcoming article.

What will it change?

Directly advertisers will be mainly affected by the changes regarding:

  1. How you (re)target your audience
  2. How you measure conversions/effectiveness of online channels

Both processes above are currently exclusively based on third party tracking. Of course, Google will implement alternative solutions (APIs), but in order to work properly, you will need to make changes on your side as well. Google itself announced in a blogpost in July that tests were showing a maximum of 5% drop in conversions using the new privacy-focused technology called FloC.

Oh, it will only take effect in 2023, it doesn’t concern me right now.

There’s a possibility that the deadline will be postponed even later in the upcoming periods. Moreover, the Privacy Sandbox is far from complete, let alone legally compliant all regulators. Nevertheless, you can not put off preparation for the transition, you should start acting right now. Only this way you can avoid chaos in 2023, let alone gaining competitive advantage over your competitors by a smooth transition.

All right, so what can I do right now?

As for ensuring your targeting tactics work going forward, you should:

  • Implement a valid, compliant Consent Management Platform (aka cookie box) as soon as possible because everything will be dependent on consent mode moving forward.
  • Put even greater emphasis on your first party data. Create a data strategy, start collecting data of your users, implement a CRM, facilitate loyalty programs. All the data you gather for yourself will still be usable for targeting in the future.
  • As for prospecting campaigns, if you’re heavily reliant on third-party data and audiences, try to broaden your toolset by turning to other possibilities, like contextual targeting and lookalike audiences.

If you have any questions regarding the Privacy Sandbox transition, or would like to get an assessment of how to change your current processes/technologies, don’t hesitate to reach out to us at hello@mitoperformance.hu


Mito is a full-service agency with a passion for clever things. The Performance division is specialised in improving digital performance and increasing sales with performance media, SEO, CRO and analytics solutions.
We are proud to have companies like Decathlon, Wizz Air, Cetelem Bank, Office Shoes and Tungsram among our strategic partners.


Sources:

https://privacysandbox.com/

https://www.theverge.com/2021/6/24/22547339/google-chrome-cookiepocalypse-delayed-2023

https://adage.com/article/digital/google-rejects-plan-replace-third-party-cookies-personal-ad-ids/2318516

https://clearcode.cc/blog/facebook-first-party-cookie-adtech/

https://www.advanced-store.com/en/facebook-introduces-first-party-cookies/

https://headerbidding.co/google-privacy-sandbox/

https://gizmodo.com/stop-letting-google-get-away-with-it-1846414787

https://www.theverge.com/2020/1/14/21064698/google-third-party-cookies-chrome-two-years-privacy-safari-firefox

https://digiday.com/marketing/google-switch-floc-cookie-replacement-fingerprinting-potential/

https://www.adexchanger.com/online-advertising/googles-message-to-the-ad-industry-we-wont-build-our-own-third-party-cookie-alternatives-and-we-dont-want-you-to-either/

https://www.forbes.com/sites/forbesbusinesscouncil/2021/09/13/googles-waffling-proves-we-cant-afford-to-depend-on-third-party-data-and-traffic/

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