The end of third-party cookies: How marketers should prepare

The end of third-party cookies may seem daunting, and the coming iOS update is a sure sign that that day is near. Luckily, there are data-driven solutions worth investigating as alternatives — and many brands are already using them.

The end of third-party cookies: How marketers should prepare

For the past few years, the marketing world has been abuzz about the decline of third-party cookies. With concern about consumer privacy and trust on the rise, the use of cookies has been increasingly questioned – and policymakers are taking notice. Currently, customers must opt in to cookie tracking on sites, GDPR has raised consumer privacy standards in Europe, and major web browsers have eliminated third-party cookies all together.

But despite how long marketers have been anticipating the full-on removal of tracking cookies, most businesses that rely on cookies for digital advertising aren’t prepared to go without. This hits particularly hard right now as marketers await the coming Apple iOS 14 update, which will mandate that Apple users actively opt in to receiving ads from brands that track their cookies across apps.

The challenge this poses for marketers

Third-party cookies have been central to digital marketers' strategies for years. In order to prepare for what's next, it's important to understand where the absence of cookies will be felt most.

Retargeting and attribution

Third-party cookies allow businesses to gain insight into where else their site visitors spend time online and how they behave. This data also gives businesses the opportunity to get in front of those consumers — who are valuable targets because they've already shown interest in the brand — by retargeting them with relevant ads wherever they show up across the web.

A popular and effective form of advertising, retargeting will take a hard hit with the removal of third-party cookies and will force brands to rethink their digital targeting strategy.

Multi-touch attribution will be affected as well, since advertisers will no longer be able to use third-cookies to trace the path customers took to conversion. Last touch attribution may be the only insight marketers get regarding the origin of their customers’ conversion – and such a shallow understanding of customer behavior will limit potential understanding of customer behavior at scale across the web.

Facebook advertising

At the moment, perhaps the biggest story on third-party cookies is the impending Apple iOS 14 update, which comes with some changes to permissions around tracking Apple users across devices, websites, and apps. Facebook is the platform that will perhaps feel this change the most.

Specifically, iOS 14 users will have to opt in to allow apps like Facebook to track them across websites and apps owned by Facebook advertisers. As data privacy has become a much larger concern as of late, Facebook is not expecting much more than 20% of its users to opt in to tracking. This leaves businesses advertising on Facebook in the lurch, with a large data gap that marketers aren’t used to having to make up for. These are a few ways we anticipate how this will affect Facebook campaigns:

  • Ad sets are optimized to achieve particular actions, and with less data on who performed those actions, ad sets will likely have a harder time performing efficiently.
  • Retargeting campaigns may be less effective with fewer people to target and less data to optimize delivery of the ad sets.
  • Lookalike generation may be less effective as there will be fewer people to use as a seed audience (as well as less data on what makes the seed audience unique).

A lack of user consent to cookie tracking will also limit advertisers’ ability to use web conversion events from Facebook pixels, changing the scope and accuracy of reporting user conversions. New restrictions may delay reporting up to three days, and attribution will be limited to seven-day click, one-day view windows. Marketers who rely on conversion reporting for products with longer sales cycles in particular will see fewer conversions, as Facebook will no longer count conversions as far out as 28 days.

Learn how Faraday mitigates the limitations of Facebook LALs for innovative consumer brands

Data-driven solutions you can use now

The end of third-party cookies may seem daunting, and this iOS update is a sure sign that that day is near. Luckily, there are data-driven solutions worth investigating as alternatives — and many brands are already using them.

Replace retargeting with contextual ads

Contextual advertising is a great alternative to using cookies, since it's also intent-based. Essentially, ads that are relevant to a given site page are displayed to all visitors, relying on keyword targeting and the consumer’s inherent interest in the content to drive clicks (and ultimately revenue).

For example, a page with a how-to article about sewing may display ads for an online fabric store in the margin. This display ad system can be easily set up and managed with Google Ads to optimize keywords and ad placement.

Replace third-party cookies with known-identity data

Known-identity data — first-party and/or third-party — that is ethically obtained from consenting consumers can help brands understand their customers and successfully target valuable audiences. Marketers gain crucial insight especially with licensed third-party data, because it does not rely on any online, web-based cookie data, and more accurately reflects who consumers are in real life.

Types of data attributes often included with licensed, known-identity third-party data are demographics, financials, geographics, and psychographics. This information can aid in personalization efforts when it comes to providing relevant content, ads, and promotional offers to custom audiences that consistently target the same individuals across multiple marketing channels.

Bring AI into your stack with Faraday

To combat the decline of tracking cookies and the impending iOS 14 data restrictions – and always guided by a commitment to ethical data usage – Faraday relies on custom audiences generated with machine learning models that use first- and third-party data. By using hundreds of ethically sourced data points to predict how consumers are likely to behave — rather than following them around the internet with retargeting ads — we can help brands successfully reach valuable customers in the cookie-less future.

Attribution also gets easier with Faraday because we're able to match individuals from our custom audiences to a brand’s own customer data and track conversions for any attribution window. This provides more transparency in customer behavior and lifecycles that won’t be as readily available to advertisers, with cookies on the decline and tracking limitations in place.

Additionally, as technology moves in the direction of privacy over data collection, Faraday will still have the resources to look at offline data and what makes a brand’s particular users unique. Not being reliant on online data makes Faraday well-equipped to serve growing businesses as privacy becomes increasingly important.

It's time to say goodbye to third-party cookies

We’ve already seen the fallout begin with Facebook publicizing its criticism of Apple’s move to limit data collection. It will be interesting to see how Facebook advertisers perform in the coming year as more Apple users update their devices and are given the choice to level up their privacy settings.

Regardless of how Facebook and other advertising platforms rebound from this, third-party cookies are still on the way out. Moving away from web-based data will propel marketers into a future where consumers are pleased to be targeted with personalized, dynamic ads that don’t take away from their user experience online – or their privacy. Marketers everywhere need to start revising their digital targeting strategies, with sound data at the heart of it all.

Interested to learn more about Faraday’s advertising solutions? Schedule a demo to learn how you can grow your business with data science.