The Cookie Is Crumbling. Is Your Business Ready?

Google is phasing out third-party cookies this year. Here’s what you need to know.

Written by Steve Krull
Published on Feb. 22, 2024
The Cookie Is Crumbling. Is Your Business Ready?
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If I had an actual cookie for each time I heard the phrase “death of the cookie” over the past few years, I’d have enough to send me into a sugar coma.

For years, marketing experts have claimed that the death of the cookie is just around the corner. And unfortunately, all this talk has turned it into a boy who cried wolf situation.

But now the cookie is actually crumbling. All the chatter we’ve ignored is suddenly worth listening to again. Some people may put a negative spin on this — though really, who can put a negative spin on the word cookie?

Fortunately, that’s not what you’re going to hear from me. I firmly believe that amidst the chaos lies an opportunity: one for businesses to change, adapt and thrive in a cookie-less future. Below, I share more about the crumbling world of the cookie and the ripple effect it will have on businesses worldwide.

Third-Party Data Vs. First-Party Data

Third-party data is information about your customers gathered by external sources.

First-party data is information collected directly from consumers when they interact with your brand, making it more accurate and reliable.

More by this authorHow to Lead by Letting Go

 

When Did Cookies Start Deprecating?

Google’s proclamation of the demise of third-party cookies sent shock waves through the digital marketing industry. But before we hit that big red panic button, let’s look at the actual timeline of events.

In 2020, Google shared a vague announcement that they would phase out cookies... at some point. Then, in early 2022, it dropped that it would phase out third-party cookies by 2024, signaling a major shift in online advertising. This announcement wasn’t a casual heads-up but a definitive statement that businesses needed to adapt or face the consequences. Cue suspenseful music.

Fast forward to today, and we find ourselves amid the 1 percent deprecation phase. Before you brush this off as “just 1 percent,” the 1 percent in this case is 30 million — yes million — browsers. This phase is just the beginning, with the end goal being the eventual sunset of third-party cookies.

Why is this more than just another speculative scenario? Why should businesses sit up and take notice? The answer lies in the impact this shift has already had in the digital marketing world.

 

How the Crumbling Cookies Will Impact Your Business

The demise of the cookie is no longer a distant possibility; it’s a reality that businesses can no longer afford to ignore. The writing is on the wall and those who fail to adapt will be left behind in the digital dust — or, should I say, crumbs.

A recent study by Basis Technologies found that nearly 50 percent of businesses are not ready for a cookie-less world. Regardless of the industry, businesses across the board worry about reaching target audiences without the use of third-party cookies.

But what exactly is at stake? For businesses that use third-party cookies for targeted advertising, the implications as measured in numbers are not so great.

  • Ad revenue: A recent study from Assertive Yield found that after removing cookies, brands saw a 45 percent decrease in revenue per session. On top of that, Google estimated losses of 50–60 percent of revenue.
  • Ad spend: If tracking is less effective, our ad dollars will be wasted. Coupled with the lost revenue highlighted above, your ad dollars will be set on fire through ineffective advertising.

The numbers above highlight the impact these changes will have on the top and bottom lines of your company, much less your own job security. To survive and thrive in this cookie-less landscape, businesses must embrace alternative data strategies.

 

Challenges of a Cookie-less Future

One of the primary challenges businesses will face in a world without cookies is targeting, tracking and measurement limitations. Third-party cookies have long been the backbone of online advertising, helping marketers track user behavior and deliver targeted ads based on consumers’ browsing history. When we say goodbye to third-party cookies, however, businesses will lose access to this valuable data, making it harder to target the right audience, track campaign performance and measure return on investment.

In addition, businesses must navigate the complex landscape of privacy regulations. With concerns about data privacy and the rise of regulations such as the General Data Protection Regulation and the California Consumer Privacy Act, businesses need to ensure compliance and avoid potential fines and reputational damage.

And cookies are more than targeting and tracking — they can also store massive amounts of information. With cookies, your business has access to insights like those listed below.

  • Consumer shopping patterns.
  • Location and device information.
  • Browsing history.
  • Login information.
  • Website analytics.

And more. With so much information stored in cookies, it’s about time conversations around the protection and ethics of personal identifiable information and how it can be obtained and used happened at this scale. It’s a monumental shift, but we’ll all be better on the other side of it.

More Google Updates to KnowHow to Adapt to Gmail’s New Regulations

 

The Solution? First-Party Data.

If your business wants to adapt to a cookie-less world, one thing should be on the top of your to-do list: embracing first-party data — i.e., data collected directly from consumers when they interact with your brand.

In addition to driving personalized experiences, first-party data offers several advantages over third-party data regarding accuracy, reliability and compliance with privacy regulations. Providing valuable insights into consumer behavior and preferences, using first-party data leads to more effective targeting and personalized experiences than using third-party data, which is gathered by external sources.

As Google officially puts a lid on the cookie jar, there are a handful of things business leaders can do to prepare. Here are some actionable steps to help navigate this new world.

 

Build Direct Relationships with Users

If your audience doesn’t trust you, you’ll have a heck of a hard time growing your business. First-party data is more compliant with privacy regulations such as GDPR and CCPA, as it’s collected with the individual’s explicit consent. When you prioritize transparency and consent in your data collection practices, you can build consumer trust. Try the following tips to foster more meaningful interactions.

  • Encourage users to create accounts or opt-in to email subscriptions to access exclusive content or promotions.
  • Implement loyalty or rewards programs to incentivize repeat purchases and encourage ongoing engagement.
  • Use social media platforms to facilitate conversations and interactions with your audience.

 

Collect First-Party Data

2024 is the Year of First-Party Data. It might not have as much of a ring to it as Death of the Cookie, but it’s certainly more positive. To stay on top of using first-party data to your advantage, try the following.

  • Implement robust data collection mechanisms across your marketing, including websites, mobile apps and social media platforms.
  • Use consent management platforms to obtain consent from users for data collection and processing, ensuring compliance with privacy regulations.
  • Leverage customer relationship management systems to centralize, segment and analyze first-party data, gaining valuable insights into consumer behavior and preferences.

 

Invest in First-Party Data Analysis Platforms

To collect, manage and analyze first-party data effectively, invest in technologies and platforms that jump-start these processes.

  • Embrace server-side tracking as a replacement for cookies. This ethical solution to staying ahead online will give you more control over your data, ensuring both integrity and compliance.
  • Centralize and unify first-party data. Explore customer data platforms or data management platforms so you can have an easier time analyzing said data.
  • Implement customer identity and access management solutions to manage user identities and permissions, ensuring data privacy and compliance.
  • Use AI to gain actionable insights from first-party and behavioral data. By doing so, you can create more personalized marketing campaigns and ads.

The demise of the cookie has finally arrived. Armed with the right strategies, your business can go from “We love cookies!” to “Cookies? Who needs ’em?”

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