• How to Prepare for the Third Party Cookie Disruption and How to Switch to First Party Cookies

    Marketers and advertisers love cookies. This is how they track visitors and improve targeting, customer experience, and ad relevance. Retargeting ads rely on third party cookies and are known to have conversion rates as high as 70%. However, leading browsers are blocking third party cookies due to user privacy concerns. This is a huge setback […]

    Online privacy

    Marketers and advertisers love cookies. This is how they track visitors and improve targeting, customer experience, and ad relevance. Retargeting ads rely on third party cookies and are known to have conversion rates as high as 70%.

    However, leading browsers are blocking third party cookies due to user privacy concerns. This is a huge setback for several business models (e.g. ad networks), advertisers, marketers, and businesses. This article covers what makes third party cookies an issue, how you can prepare yourself, and how to switch to first party cookies.

    Let’s start with the basics.

    Understanding a Cookie

    A cookie (also known as an HTTP cookie, tracking cookie, browser cookie, web cookie, or internet cookie) is a small text data file that stores user data. The cookie is stored in the user’s computer (hard drive) by the web browser and it contains a lot of data depending on the cookie.

    Some cookies track users 24/7 while others simply save your login information when you check the ‘Remember me’ checkbox when signing into a website.

    Not all cookies are the same and not all of them store similar kind of data. The three main types of cookies include:

    1. Session cookies are temporary cookies that keep track of your online activity. The cookies expire when you close the webpage. They remain active for the session and as soon as your session is completed, the related cookies expire.
    2. First-party cookies, also known as persistent, permanent, and stored cookies, track your preferences whenever you visit a website. These cookies are created by the website you are visiting for personalization and are saved in your hard disk.
    3. Third-party cookies track your preferences and online behavior, but these aren’t created by the website you are visiting. Rather, these cookies are created and managed by third parties and are mostly used for advertising purposes.

    Here is how cookies are used in advertising:

    How cookies work

    In this example, if the cookie file is created by the website user is visiting, it will be a first-party cookie. However, if any other website created it (other than the site being visited), it will be a third-party cookie.

    A first-party cookie is available and accessible on the domain that created it. The problem with third-party cookies is that the cookie is available to any website that loads the third-party server. This is a serious concern for users and browsers.

    People don’t like being tracked online by third-party cookies and by websites that they never visited. These cookies are mostly used for advertising purposes (e.g. retargeting ads). And consumers, in general, don’t like ads. Thirty percent of Australians were using ad blockers in 2018 and the number has increased since then due to an increase in awareness.

    However, the real concern is privacy.

    According to a survey, 90% of Australians said it is unacceptable for companies to collect personal data. Here is how Australians responded to this question: How comfortable (or uncomfortable) you’ll be if a business shares the following data with third parties:

    Australian privacy survey

    Another survey found that 67% of Australians take actionable steps to protect their privacy online. An increase in online privacy awareness and a subsequent increase in the number of ad blockers forced browsers to get serious about third party cookies.

    Third Party Cookie Disruption

    Google Chrome, Safari, and Firefox are the three leading browsers with the highest global market share and all three have taken serious steps to disrupt third party cookies. Safari, Firefox, and Microsoft have blocked third party cookies since 2013. Google Chrome, being the leading global browser with the highest market share, announced in 2020 that it will phase out third party cookies in Chrome by 2022.

    This turned out to be a huge blow for marketers, advertisers, ad networks, and several businesses. Ad networks that rely solely on third party cookies are in deep water and are expected to go out of business soon provided they don’t take an innovative leap.

    The impact of third party cookie disruption and several changes in privacy and technologies by leading browsers are impacting businesses at large, conversion rate optimization experts, analytics, and several other areas.

    For example, Intelligent Tracking Prevention (ITP) is an anti-tracking feature introduced by Safari impacts marketers and businesses at large. The duration for some cookies has been reduced to 24 hours, and this has a serious concern for CRO and marketers. Cookie duration impacts A/B tests and analytics significantly.

    Techniques to Prepare Yourself

    The third part cookie disruption issue has been highlighted by several businesses, ad networks, and marketers such as AdWeek and Forbes. These changes don’t just impact advertisers but the internet as a whole.

    You can’t sit and do nothing and expect browsers to change their policies – that’s not going to work. You need to take reactive as well as proactive actionable steps to prevent yourself from the cookie disaster.

    Here is what you can do to prepare yourself:

    1. Google encourages using Privacy Sandbox which is an open environment that ensures user privacy. Google has pitched it as an alternative to third party cookies, so it is something that advertisers have to switch to. Google Chrome stores user data in the Privacy Sandbox that advertisers can retrieve via API without user-level details. Privacy Sandbox is still in its early days and it will evolve in time.
    2. Building relationships with your existing customers via email and social media seems to be a great way to increase revenue. Engage and connect with existing customers and bring them back.
    3. Switching to conversion rate optimization tools that have the potential to track and run tests accurately. A CRO tool that uses conversion measurement APIs can help you measure conversion rate without relying on third party cookies.
    4. Federated Learning of Cohorts (FLoC) is a type of contextual advertising technique that serves ads based on general consumer interests. This doesn’t let you run highly targeted ads rather the ads are interest-based targeting a specific group of people having similar interests.
    5. The best thing you can do is switch to first party cookies. Start tracking your customers and website visitors so you can run targeted ads, retargeting campaigns, and CRO campaigns without any issues. The next section covers how to do it.

    How to Switch to First Party Cookies

    Switching to first party cookies is no rocket science, you have to understand and track your website traffic, use CRM data, track visitor’s behavioral data, and engage with your content and ad partners. Switching to behavioral advertising seems to be a wise decision as it turns out to be a perfect way to connect and interact with your audience.

    One way to switch to first party cookies is by tracking website visitors and understand how they interact with your website. This behavioral data will provide you with two benefits:

    • A better understanding of your target audience and ideal customers (e.g. what they like to read, what type of forms they prefer engaging with, etc.)
    • You can improve user experience and conversion rate by understanding your users better.

    Consider this: The average conversion rate across all websites is a measly 2.35%.

    The problem isn’t traffic rather it is conversion.

    If an average website converts only 2 visitors out of 100, mourning on the death of third party cookies seems ridiculous. The real challenge is converting visitors into customers. You are already getting enough traffic – you need to convert it.

    Guess what?

    You don’t need third party cookies to convert visitors into customers. Heatmaps, scroll maps, analytics, and other behavioral analytic tools can provide you with a wealth of data about your website visitors (first party cookies).

    Create A/B tests based on behavioral analytics to improve the conversion rate of your website and to engage with your visitors on multiple channels.

    The traffic you receive and your customers are (now) the biggest assets you have. The problem isn’t tracking visitors on your website rather how you use first party cookie data. You can either let it sit on the user computer where it will expire or you can use your CRM, analytics, and CRO tools to build a network of highly engaged and loyal customer base.

    The Road Ahead…

    Let’s admit this: There will be no third party cookies in the future. Period.

    Rather than mourning on something that you don’t have control over, let’s find opportunities to innovate and grow your business without third party cookies.

    Look at the bright side. Focus on what you have and what you can do. If you don’t find any third party cookie alternative, why not come up with your own solution? It is a big and hot business idea.

    First party cookies are still alive and aren’t going anywhere any time soon. How you deal with your current customers and visitors is more important than ever. It is time to focus on what you have.