Cookieless Advertising: What you need to Know as Third-Party Data Disappears

Cookieless Advertising: A Complete Guide

Welcome to the guide on cookieless advertising! With major web browsers phasing out third-party cookies by 2022, digital advertising is set to undergo a massive transformation. According to a report by eMarketer, 82% of marketers are concerned about their ability to target consumers effectively without third-party cookies. 

This concern is not unfounded, as third-party cookies, a.k.a. privacy cookies, have played a vital role in digital advertising for over two decades. It has enabled marketers to track and target users across the web. However, the growing concerns around digital privacy and the increasing use of ad-blockers have forced the industry to adopt new approaches to online advertising.

The cause and effect of this shift towards cookieless advertising are multi-faceted. With the rise of data privacy concerns and regulatory restrictions, consumers are increasingly aware of the value of their data. It has led to a growing demand for greater transparency, control, and privacy in digital advertising. 

In response, browser providers such as Safari, Firefox, and Chrome have taken steps to phase out third-party cookies. This will limit the ability of advertisers to track user behaviour across the web, making it more challenging to deliver personalized and targeted ads.

However, this doesn't mean that digital advertising is dead. It's an opportunity for businesses to build better relationships with their customers by respecting their privacy and offering relevant and personalized experiences. 

In this guide, we will explore the challenges and opportunities of cookieless advertising and provide insights into how businesses can adapt to the new era of online advertising. We'll discuss various alternatives to third-party cookies, such as first-party data, contextual advertising, and privacy-focused solutions, and provide practical tips on how to leverage them for your business. 

Let Us Learn More about Cookies

Cookies are small text files that are stored on a user's computer by a website. They are widely used in the digital world to provide a better user experience by remembering user preferences and history. Cookies can be broadly classified into various types based on their usage and purpose. Here are some of the most common types of cookies and their usage:

• Session cookies: The session cookies are temporary. Those are deleted when a user closes their web browser. They are used to remember user preferences and settings during a single browsing session.
• Persistent cookies: Unlike session cookies, persistent cookies are not deleted when the browser is closed. They are used to store information like login credentials, language preference, and user history, allowing websites to remember users over multiple sessions.
• First-party cookies: The first-party cookies are created and stored by the website that the user is currently visiting. They are used for various purposes such as tracking user behaviour, remembering login details and providing a personalized experience.
• Third-party cookies: These cookies are created and stored by third-party domains that are embedded in a website. Third-party cookies collect data from a user's browsing history, and behaviour, such as the pages visited, the time spent on each page, and the links clicked. Then, this data is used to serve targeted ads to the user based on their interests and behaviour. 
• Secure cookies: The secure cookies are only transmitted over encrypted connections (HTTPS) and are used to store sensitive information like credit card details and login credentials.
• HttpOnly cookies: These cookies are not accessible through JavaScript, making them more secure against cross-site scripting attacks.
• Analytical cookies: Analytical cookies are widely used to collect data on how users interact with a website, including page views, time spent on a page, and click-through rates. The data collected is used to improve the website's performance and user experience.

You must know each type of cookie has a unique purpose and usage, enabling websites to collect information, track user behaviour, and provide better services. However, it is essential to maintain user data privacy and ensure that cookies are used responsibly and ethically.

Why Are Third-Party Cookies Disappearing?

Third-party cookies are disappearing due to growing concerns over user privacy and data protection. Many users are worried about being tracked across the web by advertisers, leading to a demand for greater transparency and control over data privacy. 

In response, various governments have introduced laws and regulations to protect user privacy, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). 

These laws require companies to obtain user consent for the collection and processing of personal data, including cookies. Major web browsers like Safari, Firefox, and Chrome have also started blocking third-party cookies by default. As of February 2023, over 90% of the top 500 websites in the world have taken steps to reduce their reliance on third-party cookies, with many companies turning to alternative tracking methods like first-party cookies and contextual advertising. 

How Does Cookieless Marketing Impact User Experience?

The impact of cookieless marketing on user experience is still largely unknown as advertisers and marketers navigate this new landscape. However, user experience will likely be impacted in several ways. 

For one, without third-party cookies, users may see fewer targeted ads, which could be seen as positive or negative depending on their perspective. 

On the other hand, contextual marketing may become more prevalent, meaning that users will see more ads that are relevant to the content they are viewing. 

Additionally, without third-party tracking, advertisers may struggle to deliver personalized experiences to users, which could impact engagement and brand loyalty. 

Ultimately, the impact of cookieless marketing on user experience will depend on how effectively advertisers and marketers adapt to these new challenges and opportunities.

How Does Cookieless Advertising Work?

Cookieless advertising works by using alternative mechanisms to track user behaviour and deliver targeted ads. These mechanisms include-

Anonymous Targeting

Anonymous targeting involves using non-personalized data to deliver targeted ads. This approach relies on contextual data, such as the content of the page or the user's search terms, to deliver relevant ads. Since this approach does not rely on individual user data, it is considered anonymous targeting.

Authenticated Targeting

Authenticated targeting, on the other hand, involves using first-party data to deliver personalized ads to users who have given their consent to share their data. This approach requires users to sign in to a website or app to share their data, which is then used to deliver personalized experiences and recommendations. This approach is considered authenticated targeting because the user's identity is known and verified.

Note: While authenticated targeting offers more personalized experiences, it requires users to opt-in to data sharing, which may limit the number of users who can be targeted. Anonymous targeting, on the other hand, can reach a broader audience but may not offer the same level of personalization. Both approaches have their benefits and limitations, and advertisers and marketers must decide which approach to take based on their specific needs and goals.

How to Prepare for Cookieless Marketing?

With the disappearance of third-party cookies, advertisers and marketers need to start preparing for a future without these tracking mechanisms. According to a recent study, almost 60% of advertisers expect to see a decrease in the effectiveness of their digital advertising efforts as a result of third-party cookie deprecation. To help prepare for cookieless marketing, here are some actionable steps to consider:

• Focus on building first-party data: Collect user data directly from your website or app through sign-ups, subscriptions, or purchases, and use this data to inform your marketing campaigns. For example, Netflix uses first-party data to personalize recommendations for users based on their viewing history. Many Programmatic Advertising companies have CDP data of many publishers, Ecommerce, and transactional data of payment gateway. We can target them through a programmatic campaign. 
• Leverage contextual advertising: Use contextual data like the content of the page or the user's search terms to deliver targeted ads to relevant audiences. For example, a sports brand can display ads on pages related to sports or fitness.
• Invest in machine learning and AI: Advanced algorithms can help you analyze user behaviour and patterns to deliver personalized experiences and recommendations. For example, Amazon uses machine learning to recommend products to users based on their search and purchase history.
• Use alternative tracking mechanisms: Explore alternative tracking mechanisms such as browser fingerprinting, which can identify users based on their browser and device settings. For example, Microsoft uses browser fingerprinting to track users across its network.
• Prioritize user privacy: Be transparent about your data collection practices and give users control over their data through opt-out mechanisms and consent management tools. For example, Mozilla's Firefox browser includes privacy features that block third-party tracking and provide users with control over their data.

By taking these steps, advertisers and marketers can stay ahead of the curve and continue to deliver effective and personalized marketing campaigns in a world without third-party cookies.

Is it Possible to Target Ads without Cookies?

Yes, it is possible to target ads without cookies. Although cookie-based targeting has been the primary focus of the Internet marketing industry for quite a long time now, advertisers are shifting to a more transparent and reliable method of targeting. Intelligent targeting, which offers the utmost privacy and does not need user profiling, has been made possible only by recent developments in artificial intelligence and machine learning. 

Using advanced technology in marketing is prevailing as an effective solution that can achieve intelligent targeting by allowing marketers to monitor and respond to data about how users are engaging with content in real-time. And a cookie-based targeting strategy is unnecessary in the environment of dynamic data and personalized campaigns.

What Happens if You Do Not Adapt to Cookieless Marketing?

Cookies help you understand the behavioural traits of your customers. It's not surprising that 83% of businesses continue to rely on third-party cookies to project customer behaviour all across the platforms and components associated with deploying their marketing plan. 

However, when the use of third-party cookies is forbidden, you won't know anything about your customer if you don't adopt cookieless marketing. If you don't segment your audience, you may keep presenting the same information to everyone, regardless of where they exist on your sales pipeline and what they need or desire. Hence, the customer conversion rate will decrease as they are more likely to opt-out if personalized offers are not provided.

What Are the Alternatives to Third-Party Cookies?

The absence of cookies in online advertising does not need a return to the ancient period of marketing, but it does necessitate a less focused strategy. However, here are a few feasible solutions that you can use as alternatives to third-party cookies.

• First-party cookies: To put it simply, first-party data is the information that you have collected directly from your leads and customers, like their email IDs, purchase histories, characteristics, and more. Build your dependencies towards first-party cookies.
• Zero-party data: Zero-party data is the Holy Grail of data, but it is also the utmost elusive. There are a variety of methods for gathering it, but it ultimately rests on the user to give the necessary details. Registration form inquiries, email campaigns for preference surveys, and social media surveys are all great ways to collect zero-party data that can be used to create a better-tailored experience for each consumer.
• Cohort marketing: Marketing to a specific cohort is dividing your target audience into subsets (cohorts) that have commonalities in demographics, life history, and behavioural tendencies. Cohort analysis helps your marketing efforts succeed by letting you focus on the similarities between consumers who undertake similar behaviours.
• Use interactive cookie banners: A user's permission is required before any data may be stored or accessed on their device. When a user first visits your site, you must inform them of your cookie policy and provide them with the choice to opt-in by displaying a cookie banner (sometimes called a cookie notice). 
• Marketing mix modelling (MMM): Marketing mix modelling (MMM) is a strategy for gaining insight into advertising strategies by analyzing prior performance data, which may shed light on recurring phenomena like vacations, seasons, brand image, and more. While using MMM, you can get more precise data about your spending and results when the buyer's path is unavailable.
• Browser APIs: Marketing to a specific cohort is dividing your target audience into subsets (cohorts) that have commonalities in demographics, life history, and behavioural tendencies. Cohort analysis helps your marketing efforts succeed by letting you focus on the similarities between consumers who undertake similar behaviours.

How Can You Solve the Issue of Cookieless Advertising?

Using content to your benefit and making sure there's enough of it- is essential for cookie-free marketing. Since a large number of ads may be generated from a single template using different tools, businesses can test those in the post-cookie era. This paves the way for a shift from anonymous advertising to targeting that is more precisely defined depending on the outcomes of these experiments. To personalize the ads, creative digital leaders should make adjustments to the ad's language, CTA, backdrop colour, voice tone, scene order, etc. 

However, the use of bots should be limited to mundane versioning duties, but promoting proper advertising is a complex procedure that requires professional (human) thinking. Contextual marketing and advertising, however, will continue to play an increasingly important part as the advertising business learns to adapt to a world without cookies. This implies that to offer appropriate adverts depending on what’s published on a web page someone is currently browsing, contemporary cookieless targeting will use artificial intelligence (AI) and machine learning (ML).

The Bottom Line

That’s all! Now you have learned everything about cookieless advertising. Growing dependency on first-party data along with technology will help your business thrive in a third-party cookieless world. All the details mentioned above will aid you in getting the best possible outcome from your cookieless marketing campaigns. If you have further queries, drop a comment in the below box. Thanks for reading.