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Google’s Third-Party Cookie Phase-Out 2024: What is the Impact?

Posted By
Lawrence Young
Insights
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PPC
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Google’s Third-Party Cookie Phase-Out 2024: What is the Impact?

Read the update on Google’s U-turn here! Google’s third-party cookie phase-out, expected to be completed in 2024, represents a significant change in online advertising. This move is driven by the need to enhance user privacy and give people more control over their data. Here’s what you need to know and how it will affect the digital advertising landscape. Let’s start with an overview of the changes before looking deeper into what this means for your online advertising efforts.

If you already know about the change, perhaps you’re looking for practical tips. Check out our how-to guide to help you prepare with Google Topics.

Table of Contents

What is Changing?
Google’s third-party cookie phase-out is eliminating third-party cookies, which have traditionally been used to track users across different websites for targeted advertising. This change will impact how advertisers collect data, measure campaign success, and target their audiences.

Why is This Happening?
Users are increasingly concerned about their privacy and how their data is being used. By removing third-party cookies, Google aims to protect user privacy and build trust. This shift also aligns with evolving privacy laws like GDPR and CCPA, which demand greater transparency and user consent for data collection.

The Role of First-Party Data
First-party data, collected directly from user interactions on your site, will become crucial. This type of data is more reliable and privacy-compliant. Businesses will need to focus on collecting and managing this data effectively to continue personalising and targeting their marketing efforts.

New Technologies and Methods
To replace third-party cookies, Google is introducing new tools like the Topics API, which allows advertisers to target users based on broad interest categories without tracking them across sites. Contextual advertising, which targets ads based on the web page’s content, and AI-driven targeting, which uses artificial intelligence to personalise ads, will become more important.

Measurement and Analytics
Traditional methods of tracking and measuring ad performance will need to evolve. Tools like Google Analytics 4 (GA4) are designed to function without third-party cookies, providing advanced features for tracking user interactions and measuring campaign success.

Compliance and Ethical Practices
Advertisers must ensure their data practices comply with privacy laws and build user trust through transparency and consent. Implementing Consent Management Platforms (CMPs) and following Privacy by Design principles will be paramount.

Challenges and Opportunities
While this transition presents challenges, such as adapting to new technologies and ensuring compliance, it also offers opportunities to create more meaningful and respectful user interactions. By prioritising privacy and transparency, businesses can enhance their brand reputation and build long-term customer loyalty.

  • Data Collection and Targeting: Many B2B businesses such as ecommerce and other digital B2B businesses rely heavily on third-party cookies to track user behaviour across websites to collect data on potential leads and customers. The recent phase out of third party cookies will mean that B2B businesses will likely need to shift their stance from targeting third party cookies to first party cookies, we will get into this later on in the article.
  • Ad Personalisation: The phase out of third party cookies will drastically impact the ability of companies to deliver ads based on user behaviour across different sites. With this recent change, your ads won’t be able to follow potential B2B leads in the same way they did before the change.
  • Retargeting Efforts: The phase out of third party cookies will hinder B2B businesses’ ability to show ads to users who have previously visited their website. To combat the negative impact of this change, B2B businesses will need to shift their retargeting efforts by using first-party data and engaging with users through other channels such as email marketing, social media, and direct outreach. To further combat the potential negative impact of the cookie shift, we recommend all businesses to rework their frontend experience; providing users with an experience which leads to faster conversion and avoids the chance of potential bounces.
  • Performance Measurement: B2B companies may endure a complication in their tracking and measurement of marketing campaigns across sites, which may lead to potential gaps in attribution. However, it is recommended B2B companies focus on improving internal analytics capabilities to help bridge any potential gaps.

Privacy Sandbox Initiative

In answer to Google’s third-party cookie phase-out, Google’s Privacy Sandbox is designed to replace third-party cookies with new technologies that protect user privacy while allowing for targeted advertising. Key components include:

  • Federated Learning of Cohorts (FLoC): Initially proposed to group users into cohorts based on similar browsing behaviours, FLoC aimed to allow interest-based advertising without tracking individual users. However, it is no longer being developed due to privacy concerns.
  • Topics API: This new approach assigns users topics of interest based on browsing history, allowing advertisers to target ads without cross-site tracking. This method ensures that while ads remain relevant, user privacy is maintained by not sharing specific site visits across the web​ (MarTech Trends)​​ (Ad Tech Explained)​.
  • Protected Audience API (FLEDGE): This API enables on-device ad selection processes, keeping user data private while enabling targeted advertising​ (Privacy Sandbox)​.

Tracking Protection Features

In early 2024, Google began rolling out Tracking Protection features to a small percentage of Chrome users, which will expand to all users by mid-to-late 2024. These features limit third-party cookie access, significantly reducing cross-site tracking​ (Privacy Sandbox)​​ (Ad Tech Explained)​.

Explore New Advertising Methods
Exploring new advertising methods is essential. Topics API, mentioned above, allows for contextual advertising and places ads based on the content of the web pages rather than user behaviour. This ensures that ads are relevant to the viewed content, maintaining effectiveness without tracking users across sites. Additionally, leveraging AI-driven targeting can significantly enhance marketing efforts. AI can analyse large datasets for insights, predict user preferences, automate audience segmentation, and optimise ad performance in real-time​ (LifeMeasure)​​ (Digital Marketing Consultant)​.

Shift to First-Party Data
Businesses should focus on collecting and utilising first-party data. This involves developing methods to gather data directly from users through website interactions, such as email sign-ups, loyalty programmes, and purchase history. Effective data collection ensures reliability and consent, builds direct customer relationships, and enables personalised marketing without third-party cookies. Investing in Customer Data Platforms (CDPs) and Data Management Platforms (DMPs) can help in organising, analysing, and activating this data efficiently​ (Single Grain)​​ (LifeMeasure)​​ (Think with Google)​.

Focus on Compliance and Privacy
Focusing on compliance and privacy is critical. Ensuring that data collection methods comply with GDPR, CCPA, and other privacy laws is essential. Implementing Consent Management Platforms (CMPs) can help manage user consent efficiently, maintaining transparency and trust. Incorporating privacy considerations into product development and business processes—Privacy by Design—builds user trust and ensures that practices remain adaptable to future regulations​ (Think with Google)​​ (Digital Marketing Consultant)​.

Redefine Measurement and Targeting
Redefining measurement and targeting approaches will also be necessary. Combining various measurement methods through Unified Marketing Measurement (UMM) provides a comprehensive view of marketing performance, helping to optimise strategies. Tools like Google Analytics 4 (GA4) support effective measurement without relying on third-party cookies, enabling accurate tracking of user interactions and campaign performance​ (Think with Google)​​ (Digital Marketing Consultant)​.

Stay Informed and Flexible
Staying informed and flexible is crucial for navigating the evolving landscape. Keeping up-to-date with changes in privacy laws and digital marketing trends is essential. Investing in training for your team ensures they are equipped to handle new advertising environments. Developing flexible data strategies that can be adjusted as new regulations and technologies emerge is essential, and conducting regular audits ensures ongoing compliance and effectiveness​ (Search Engine Journal)​​ (blog.google)​.

Benefits of First-Party Data in Advertising

Enhanced Personalisation
First-party data includes information like email addresses, purchase history, and browsing behaviour collected directly from users on your site. This data allows advertisers to create highly personalised marketing campaigns tailored to individual user preferences and behaviours, leading to higher engagement and conversion rates​ (Single Grain)​​ (Think with Google)​.

Improved Customer Insights
By analysing first-party data, businesses gain deep insights into their customers’ preferences, purchase behaviours, and interactions with the brand. These insights enable more accurate segmentation and targeting, ensuring marketing efforts are directed towards the most relevant audiences. This results in more efficient use of advertising budgets and higher ROI​ (LifeMeasure)​​ (Think with Google)​.

Increased Trust and Compliance
First-party data is collected with the user’s consent, making it more transparent and privacy-compliant. This builds trust with users and ensures compliance with privacy regulations like GDPR and CCPA, avoiding legal risks and enhancing the brand’s reputation​ (Digital Marketing Consultant)​​ (blog.google)​.

Enhanced Accuracy and Reliability
First-party data is typically more accurate and reliable than third-party data because it comes directly from interactions with your site. This leads to better targeting accuracy in advertising campaigns, reducing wasted ad spend on uninterested audiences​ (Think with Google)​​ (Digital Marketing Consultant)​.

Integration with Advanced Technologies
First-party data can be integrated with CDPs and DMPs for comprehensive analysis. These platforms help organise and activate data across various channels, enabling advanced targeting and personalisation strategies. AI can also derive predictive insights from first-party data, enhancing the effectiveness of ad campaigns​ (Single Grain)​​ (LifeMeasure)​.

Better Long-Term Relationships
First-party data supports the development of long-term relationships with customers by enabling continuous and consistent engagement. Businesses can use this data to nurture customer relationships through personalised offers, loyalty programmes, and consistent communication, enhancing customer loyalty and lifetime value​ (Digital Marketing Consultant)​​ (blog.google)​.

Relevance of First-Party Cookies for Topics API

Enhancing Ad Targeting with Contextual Insights
The Topics API assigns users topics of interest based on their recent browsing history, allowing advertisers to target ads based on these interests. While the Topics API provides a broader framework for interest-based targeting, first-party data adds specific, consented information about user preferences and behaviours, refining targeting strategies. For example, combining first-party data with the Topics API can lead to more accurately targeted ads on other sites that match the user’s interests​ (Think with Google)​​ (Digital Marketing Consultant)​.

Improved Personalisation
The Topics API alone provides a generalised view of user interests. First-party data offers a deeper, more personal insight. By combining the broader interest topics provided by the API with specific user data from your site, you can create highly personalised marketing campaigns that are more likely to engage users. For instance, a user interested in “fitness” might receive ads for fitness equipment on other sites through the Topics API. If your first-party data shows they recently bought running shoes, you could tailor ads to show complementary products like athletic wear or fitness trackers​ (Think with Google)​​ (Digital Marketing Consultant)​.

Compliance and Trust
The Topics API enhances privacy by not tracking users across sites. Using first-party data ensures that your advertising practices remain compliant with privacy regulations while leveraging the additional targeting capabilities of the Topics API. Users are more likely to trust and engage with ads when they know their data is handled responsibly. Ensuring user consent and transparency in how their data is used builds trust. It can lead to better engagement and conversion rates from your advertising efforts​ (Digital Marketing Consultant)​​ (blog.google)​.

First-party data remains essential in the evolving digital advertising landscape. It integrates seamlessly with the Topics API by providing detailed, consented user information that enhances ad targeting, personalisation, and compliance. These strategies ensure that your advertising efforts remain effective, user-centric, and compliant with privacy regulations, maintaining relevance and trust in a changing market.

Key Takeaways:

  • Google’s Privacy Sandbox: Replaces third-party cookies with privacy-focused technologies like the Topics API and Protected Audience API to balance privacy and effective advertising.
  • Crucial Role of First-Party Data: Collecting data directly from users ensures reliability and consent, enabling personalised marketing and compliance with privacy laws.
  • Enhanced Personalisation: First-party data allows for highly tailored marketing campaigns, increasing engagement and conversion rates.
  • Deep Customer Insights: Analysing first-party data provides valuable insights into customer preferences and behaviours, improving segmentation and targeting.
  • Building Trust and Compliance: Consented data builds user trust and ensures compliance with GDPR and CCPA, avoiding legal risks.
  • New Advertising Methods: Contextual advertising and AI-driven targeting provide effective alternatives to third-party cookies.
  • Effective Measurement: Tools like Google Analytics 4 (GA4) help maintain accurate tracking and performance measurement without third-party cookies.
  • Adaptability and Continuous Learning: Staying updated on privacy laws and marketing trends and investing in team training ensures ongoing compliance and effectiveness.

Want to learn more about how your business can keep advertising ahead of the curve?

Contact our team now to find out how we can help readjust your marketing strategy! We will be able to advise on the new topics soon to be available and what we suggest the next best steps are for you and your brand.

You can also check out our how-to guide to help you prepare for Google Topics.

Google’s Third-Party Cookie Phase-Out 2024: What is the Impact?