Google, Apple, and Mozilla have all declared they are phasing out support for third-party cookies.

By 2022, more than eight out of ten Internet users won’t automatically accept cookies from advertising partners when visiting websites. One of the most popular and lucrative advertising technologies of the past two decades will become history.

Brands that prepare for this radical change now will enjoy a significant advantage when the transition is complete. Major advertising platforms and providers are already investing in alternatives that may provide cookie-like performance without relying on cookie technology.

Why Third-Party Cookies Are Important

Cookies are useful bits of data that websites store on users’ behalf. Early cookies performed simple tasks like remembering which items customers put in their shopping cart or keeping accounts logged in as they moved from one webpage to another. These first-party cookies improve the online user experience and are not being phased out.

Third-party cookies are different. These cookies are not issued by the website the user is visiting. They are issued by separate websites and track user behaviours across multiple domains.

In time, sophisticated third-party cookies allowed advertisers to track users and target them based on their behaviours. This made them indispensable for social media platforms and ecommerce advertisers, who could now send highly personalised messaging to individual users based on their interests in real-time.

These cookies are accessible on any website that loads the third-party server’s code. The problem is that users often end up sending behavioural data to companies they have never heard of – without knowing it.

Third-Party Cookies May Have Hit Their Limit

There is a broad, global shift towards online data privacy regulation. American and European lawmakers have begun focusing on third-party advertising cookies, establishing regulations that change the way users and advertisers interact on the Internet.

This trend was virtually guaranteed to happen sooner or later. For years, less-than-scrupulous advertisers misused and abused third-party cookie technology to maximise advertising results in ways that neglected the user experience. As a result, cookie technology has a poor reputation with the public.

At the same time, the proliferation of Internet-capable devices makes cookie technology less effective overall. Since third-party cookies cannot transfer between devices and apps, they cannot accurately portray the customer journey in a multichannel environment. The more devices users have access to, the more severe attribution errors become.

Major Advertisers Are Already Building New Solutions

Together, Google, Facebook, and Amazon are responsible for nearly two-thirds of online advertising spend. Each of these companies is preparing for a cookieless future in its own way.

• Google is building a “privacy sandbox” that offers advertisers access to aggregated, anonymised user data from individual devices. This doesn’t allow advertisers to target individual users, but it can target groups of users that exhibit similar behaviours.
• Facebook has been fighting against changes that break its celebrated Pixel functionality and is focusing more on the wealth of first-party data it can collect from users on its own. This includes the controversial move of opening up the data-sharing potential of WhatsApp.
• Amazon wants to bypass the need for third-party cookies by focusing more on direct user experiences. Instead of relying on tracking technology on browsers, Amazon is looking to monetise advertising through the media it already owns. Amazon can simply use its own ecommerce data to publish OTT ads on Prime Video content and bypass the need for third-party cookies entirely.

All of these approaches share a single problem. They rely on brands to trust first-party data from major tech companies without the ability to see granular detail. Marketers will have to think much harder about the experience and brand proposition they wish to offer to users and learn much more about the customer journey on their own.