The use of cookies has long been a staple of the digital advertising industry. They allow advertisers to track users’ online activity and target ads to them based on their interests and behavior. In 2023, consumer privacy regulations across the globe have put restrictions on the use of cookies for advertising purposes.
There's a good chance you're thinking; "I've heard about the death of the cookie for the past 6 years, why hasn't it died yet?"
The answer; it’s too important and profitable for major advertisers.
Google’s advertising business has been built around the use of cookies. It provides more data on consumers to brands through cookies than any other company. To illustrate the scale of its pull over advertisers' online budgets, Google hosts cookies on Chrome which allows advertisers to understand how users are operating across the web. And Google Chrome represents 65% of the global browser market.
Advertisers tracking pixels can be used in tandem with cookies to track user behaviors and the activities they’re engaging with across the web. Chrome’s massive user base means they’re sitting on a gold mine of tracking opportunities for advertisers to leverage for targeting. In short, it's too profitable for Google to drop without a plan to recoup this lost revenue. This is the reason we’ve seen them push back their plans to kill the cookie 4 different times now until 2024. It's taken a while but Google has finally developed a solution they can transition customers over to once the cookie has been eliminated. According to Google;
"By Q3 2023, we expect the Privacy Sandbox APIs to be launched and generally available in Chrome. As developers adopt these APIs, we now intend to begin phasing out third-party cookies in Chrome in the second half of 2024."
Cookies were a helpful way to provide consumers with more relevant advertisements. They also made it affordable to effectively reach your audience across the internet through programmatic tech. As time went on more and more activity was being tracked and more data points were being triangulated. With more cookie information being tracked more software was needed to connect 3rd part cookie information across platforms. This created laggy user experiences with platforms as back-end cookie syncing was processed.
Cookieless targeting will lead to a better version of advertising for consumers and brands. While cookie targeting is a cheap way for advertisers to serve impressions of their ads to a large audience, it is proven to be ridden with issues.
Cookies can be used in mischievous ways to influence consumers. Here’s an example: Let's say you're working on getting healthier in 2023. In 2022 you frequented fast food establishments quite often. Well, this year you're cutting fast food out of your diet. It's going to be tough to break a habit you've developed but you know in the end it's worth it. While you're looking to make your life better, cookies (the internet-flavored ones) enable advertisers to keep you in your old habits. These fast-food companies use consumer data from various sources to pull in customers. It's common to segment customer audiences by visit behavior. They use cookies to find customers who have broken the habit of eating at their establishment. So now they create a message aimed to get you to eat their food again. They'll triangulate data to craft the most effective campaign possible. They'll figure out what location you drive by on your commute home, what your cravings are, what type of discount your feel is too good to pass up, and more. Before you know it you've broken this healthy streak you've been on. Now you're a bit depressed with your willpower and this failure leads you to give up your 2023 health goal. A lot of times when you're on a diet, you start to feel like you're noticing junk food more. Most of the time we chalk this up to us just being more aware of things we’re craving. However, on many occasions, it’s not coincidental.
Advertisers became so obsessed with the effectiveness of personalized ads that it was only a matter of time before things went too far. Across the industry, you’d hear advertisers post-rationalizing how it’s somehow beneficial to consumers for them to know intimate details of individual strangers' lives.
Phasing cookies out of advertising won't stop advertisers from using consumer data in nefarious ways but it’s a huge step in the right direction.
One of the replacements for cookies will be the Universal ID. Universal IDs are developed by 1st party data sets. It’s essentially one single identifier for a user instead of a combination of cookies. These identifiers are able to be passed along across approved partners. One of the core principles of UID will be around consumers having the choice to opt-in and out of how much information they’re willing to share.
The switch over to UID will severely limit the amount of data that advertisers can leverage and increase the cost of targeting. However, the accuracy of targeting will be far superior, which should result in better media efficiency.
UID options
We're excited about a new era of advertising. Brands are going to need to place greater importance on creativity. They'll need to be creative in where and how they show up to reach their audiences. We should expect to see more experiences brought to life through brands. We're already seeing advertisers focusing more on the contextual alignment of their media. So here's to an era filled with inspiring creatives and engaging ads that earn attention.
