as420286899 tracking cookies lgWe’ve all heard about cookies, and I don’t mean the chocolate-chip kind. I mean the ones commercial websites place on your computer after visiting their site. These are called third-party cookies because they come from a website other than the one you’re on.

The cookies’ purpose is to target people interested in their products by serving up personalized advertisements based on what pages or product info a visitor spends time on.

The Problem with Third-Party Cookies

Third-party cookies have been a contentious issue from the get-go. Firstly, they don’t guarantee sales, nor do they have a “statistically significant” impact on the likelihood of a deal. Since they’re based on the user’s online history, they don’t necessarily predict where they might go next. Cookies based on third-party audience data aren’t very accurate, either, and often reach the wrong audiences.

However, the biggest issue is the privacy concern, because data captured by cookies can be combined with information like marriage records and credit card transactions. [quotesright]The results potentially expose millions of people to identity theft, fraud, and other risks. [/quotesright]

Fighting the Cookie Monster

For years, third-party cookies hummed along mostly unnoticed. Then, in 2016, political consulting firm Cambridge Analytica collected private data from millions of Facebook users through a quiz app. It used the data to send targeted, pro-Trump ads to the users online.

The internet community was understandably very upset about what it saw as the abuse of private information, and various groups began advocating to improve data privacy.

[quotes]Very soon after, the General Data Protection Regulation (GDPR) came into effect in the European Union.[/quotes] It required companies everywhere to comply if they collect data on people in the EU. Since most online organizations operate without borders, companies everywhere began asking visitors to their websites to accept cookies to protect themselves from prosecution.

In 2020, the California Consumer Privacy Act came into effect, giving state residents the right to opt out of the sale of their personal information. Other states have since followed suit, driven by privacy advocates acting in what they believe is the best interest of individuals.

The result of all this anti-cookie activity is that as of the end of 2022, cookies are going away. Browsers like Firefox and Safari have already banned them, and Google is phasing in the same strategy. [quotesright]Brands need to find new ways to connect with their customers, and anyone who doesn’t use 2022 to prepare for this could be left floundering. [/quotesright]

Replacing Cookie Intel

So, what can you do over the next 12 months to be ready for the end of the third-party cookie? First, it’s important to realize that the disappearance of these cookies doesn’t mean you won’t be able to monitor activity on your website. It just means your metrics and the way you collect them will change. You’ll still own your website audience, and you’ll still be able to capture them through built-in engagement capabilities.

[quotes]You won’t be able to target users at a household level but will have to settle for an aggregated group level.[/quotes] Without having access to individual consumers’ cookies, you’ll need to use an anonymized version of the information. While group-level details are less specific than individual, they can still provide insights into the aggregated target audience. So you’ll still be able to target, just not quite as uniquely.

 Devising New Solutions

However, several players are developing their own solutions. By August 2021, there were already more than 100 different options on the market, and some are more promising than others. For example, Google has rolled out its Privacy Sandbox, which helps advertisers reach customers while still maintaining their privacy.

[quotes]Then there’s Google’s Federated Learning of Cohorts (FLoC), which segments users by interest groups or cohorts based on their browsing history.[/quotes] Since these groups will be created by algorithms and contain thousands of users, it’s a more privacy-centric way to target people. Currently, the search giant is talking about the possibility of using “topics” rather than “cohorts.” Time will tell which option wins out.

Ad-tech firm The Trade Desk is working on Unified ID 2.0, which identifies users by an anonymized version of their email address. The program assigns users a unique string of letters and numbers that do not correlate with their email address, so they can’t be identified. Some stakeholders are on board with this idea, while others, like the New York Times, are staying away from any options that are even remotely identity-based.

Using Contextual Advertising

Other possible targeting methods include contextual advertising, which matches ads with the adjacent published content – much like the old print ads that ran alongside relevant articles.

First-party data, which is information companies own about their current and former customers, is also leveraged to deliver personalized ads via email. Some proponents of contextual advertising believe it has always worked and will do so again once the commercial world breaks its addiction to audience data.

[quotes]Whatever the future holds, cookies will soon be a thing of the past, and business owners will need to get creative to reach their prospective markets.[/quotes] As we head into the new year, it’s a good time to start thinking about the best approach for your company.

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