iOS 14.5 & 15…What’s happening to Third-party Cookies?

That’s the Way the Cookie Crumbles…

By Amber Toro-Keech, Marketing Data Scientist at Disruptive

Deprecation of third-party cookies is coming, and if marketers do not adapt they could be facing an increased CPA of 150% according to a study done by Facebook. Before you panic, we have a plan! In fact, we believe that with our new marketing strategy you will be able to deliver higher impact advertising, more consistently reach your target audience, and have better measurement than ever before. All while respecting your consumers right to data privacy.

Ready to find out how?

What is a cookie?

Let’s start with the basics, what is a cookie anyway? Cookies are a file for storing small amounts of user data. There are three types of cookies:

First-party cookies

First-party cookies belong to the domain you are currently visiting, this means they are a server-side cookie and are stored by the domain. Examples of this would be the way a site stores your preferences or shopping cart. These cookies focus on delivering an optimal user experience.

Third-party cookies

Third-party cookies are client side cookies stored in the browser and set by a website other than the one you are currently visiting. These cookies are primarily used for advertising. This is the main technology used to show you relevant products based on your browser history.

Hubspot also put together an awesome guide and deeper explanation of the difference between a first- and third-party cookie.

Second-party data

Second-party data are first party data shared between partners.

The end of third-party cookies

Safari & Mozilla Apple’s Safari and Mozilla’s Firefox already block third-party cookies by default. These browsers currently have the option for users to turn on third-party cookies. Chrome Google Chrome is scheduled to block third-party cookies in late 2023. With an estimated global market share of 62.8%, marketers better be ready for the disruption. Furthermore, Chrome will not give users an option to turn on third-party cookies. Once they are gone from Google, they are gone for good. Google has announced that they will not roll out alternative user-level ad identifiers to replace third-party cookies. Time to move to a first party data strategy.

How will marketing change?

Although the digital marketing industry is about to see the biggest shake up in history, it’s not all bad news. In fact, marketers who embrace a shift to a first-party data strategy are set to come out on top. On the other hand, marketers who fail to change risk:

• Not reaching people who’ve expressed interest in their brand

• Loss of ability to deliver ads that feel relevant or useful to customers

• Loss of ability to optimize ads for conversions

• Inaccurate measurement and reporting on campaign results

On the other hand, marketers who make the shift to a first-party data strategy will be able to leverage their own data to:

• More accurately target campaigns

• Improve conversion optimization

• Gain a holistic understanding of their marketing efforts

The drawbacks to third-party cookies

Third-party cookie match rates range from 40%-60%. Think of how much information you miss when you only hear half of the conversation. This can lead to poorly targeted ads and huge waste in advertising dollars.

• Third-party cookies are device based, which means you are losing information as your user switches between devices.

• One study found that 64% of third-party cookies are already blocked by browsers.

What do you need to do to be prepared?

According to Gartner there are three steps that your business must take to be ready for a world without third-party cookies.

Prepare for Sustained Disruption: plan to make strategic changes in your marketing strategies and media mix.

Rethink Ad Measurement Practices: Reset baseline metrics, set up first-party data tracking, and look at your marketing strategy holistically.

Adapt to a Walled Garden World: Set up integrations between you and your ad platforms to leverage first party data.

And remember, the core concepts of a first-party data advertising ecosystem are privacy first culture, first party data strategy, and holistic marketing strategy.