By Indrani Sen

Ever since Google announced its decision of withdrawal of third-party cookies, which were a driving force behind programmatic advertising and digital marketing, there has been lot of speculations in the digital industry about the future course of actions for digital media planning and marketing. For years, marketers have relied on third-party cookies for behavioural targeting, re-targeting and data-driven advertising and the decision of Google suddenly shook up the core of existing digital marketing strategies. Before Google, Apple’s Intelligent Tracking Prevention (ITP), and Mozilla’s Firefox enabled them to stop the practice of collecting data through third-party cookies which did not raise such hue and cry. As Google holds 60% plus share of the worldwide browser market, it is not surprising that its decision had a widespread reaction. While no one could argue with the need for user privacy, many marketers as well as publishers panicked and scrambled for finding alternative digital marketing strategies for their brands. However, this is not the end of working with cookies as first-party cookies can be a very useful tool for marketers.

While the third-party cookies will no longer be available, first party cookies will continue to exist. First-party cookies are set by the websites viewed by the users and are stored by the websites.  First-party cookies help the website owners to collect anonymous data about their users and improve user experiences. Consumers do not complain about these first party cookies as these help in improving their digital experiences leading to higher satisfaction. However, consumers object to invasion of their privacy by third-party cookies which are created and set by third parties other than the publisher or owner of the website which they are visiting and stored at the browser ends.

These third-party cookies became ubiquitous on the internet for behavioural targeting, retargeting, audience extension, tracking and ad serving and at the same time they were the main bone of contention in the crusade for consumer privacy in the digital world. Google has argued that the removal of third-party cookies will not only create more privacy for consumers, but also will provide the marketers opportunities for better digital advertising. First-party cookies will help the advertisers to have a better and more direct relationship with their consumers which in the long run will reduce their dependency on distribution platforms like Google, Facebook, and Amazon. Consumer Relationship Management (CRM) which has been gaining importance over the last two decades, will play a key role in building direct contact with the consumers.  Data tie-ups between advertisers and digital publishers based on first-party cookies can be leveraged for marketing.

Google had been working on developing alternative analytics platforms based on first-party cookies, etc. even before they made the announcement about removal of third-party cookies. Universal Analytics was built for a generation of online measurement that was anchored in the desktop web, independent sessions, and more easily observable data from third-party cookies. With elimination of third-party data this measurement methodology will become obsolete. In mid-October 2020 new version of Google Analytics GA4 was launched as the new default analytics property for Google for the replacement for Universal Analytics. Google has been urging all their users to move over to GA4 as soon as possible in order to build the necessary historical data before Universal Analytics stops processing new hits. As it stands now, all standard Universal Analytics properties will stop processing new hits on July 1, 2023, and 360 Universal Analytics properties will stop processing new hits on July 1, 2024.

GA4 collects both website and app data to better understand the customer journey; it uses event-based data instead of session-based data. It has been designed with privacy settings at its core, can track consumers across touchpoints and measure their engagements and conversations and has predictive capabilities.  GA4 offers behavioural and conversion modelling to improve ROI with data driven attribution, it can activate consumer insights. Apart from GA4, Google Chrome has also offered marketers the Privacy Sandbox technology for interest-based advertising which will target groups of people with common interests instead of individual consumers. This tool hides individuals “in the crowd” and uses on-device processing to keep a person’s web history private on the browser.

However, elimination of third-party cookies will have certain effects on the publishers as the flow of targeted ads will stop. So, publishers will have to look for alternative ways for monetising traffic to their sites. In order to make up for the loss of ad revenue, publishers may try to introduce Paywalls which in turn may reduce the traffic to their sites as some of their regular customers may not opt for paid subscription.

There will be growth of walled gardens of data collected through first-party cookies. Google and Meta already have their own first-party cookies and logged-in user data, Amazon is also likely to develop such database. Various video and audio streaming services such as Netflix and Spotify also have such first party data and can join the group of walled gardens opening new digital marketing opportunities.

Departure of third-party cookies is likely to be a big challenge for Indian programmatic industry which has been thriving on start up ventures and consultancy outfits. The programmatic marketing and advertising will become more an expensive and difficult proposition. We can review how our programmatic industry is planning to cope up with the new challenges in another article. In conclusion we can only say ” The cookies are dead. Long live the cookies!”