What does a Cookie-less Future look like for Marketers?

Cookieless Future

By Jennifer Clarke

There has been much talk about the ‘cookie-less future’ in the digital marketing world, but what exactly does this mean and what lies in store for consumers, ad tech companies and marketers?

What are cookies?

Cookies are text files sent to the browser by a website when a user visits. They are used across the internet by most websites for basic functionality as well as more enhanced technical features. They store the user’s access history and interactions for a certain period and make the browsing experience more streamlined. For example, cookies can enable a user to stay logged in between browsing sessions or retain items in a shopping basket.

There are first and third-party cookies, and whilst they essentially work in the same way, first-party cookies are created by the website the user is visiting, and are used for basic data such as name, password, and language preferences, whereas third-party cookies are created by a separate domain and are generally used for marketing and advertising purposes.

These third-party cookies are more controversial as they are used for ‘non-essential’ data tracking such as monitoring the user’s navigation between websites, direct retargeting ads, and ad serving.

Why are cookies useful in Digital Marketing?

Cookies provide very precise data to digital marketers enabling them to know, for example, who has looked at an ad and what they went on to do after seeing it, along with their other details. They also allow users to have highly targeted ads sent to them based on their browsing history and preferences.

What’s the issue with cookies?

In general, cookies are harmless and are only used to improve user experience on websites. Although users are now given the option to reject cookies, many people do not like the concept that their online activity can be so easily tracked. Also, there is the issue of the possibility that customers’ data is sold to other businesses and is therefore open to being used unlawfully, meaning users’ personal data is not as secure and protected as it should be. Users are becoming increasingly aware, and wary of how their data is tracked online.

What is a cookieless future?

It is third-party cookies, which are currently the contentious issue, and some browsers including Google Chrome have already moved towards the ‘cookie-less future’ by ending their use. The cookie-less future is a movement designed to put the user – and their data security – first. Importantly it will reduce the user data available and force developers to adopt new mechanisms to gather data with more transparency, improving security and privacy assurance for users.

Without third-party cookies digital marketers, including those at Google Chrome, know less about their users. But on balance protecting users’ data is seen as being more important. One downside for users might be that the browsing experience is less personalised and relevant to their interests, but this may be remedied as the marketing industry adapts.
Although less detailed data will be available to digital marketers and advertisers, the cookie-less future is not the end of online advertising.

How digital marketers can deal with a cookie-less future

The cookie-less future sounds like a big shift for the digital marketing world, and practices will need rethinking, but there are alternatives. Knowing the impact this would have on the advertising industry, Google developed the Privacy Sandbox, which brings together various internet-wide measures to define operational parameters for digital advertising that ensure user privacy.

One of the key proposals is to gather users into large groups or cohorts, with common browsing habits, and target them as a group, rather than individuals. This algorithm known as FLoC (Federated Learning of Cohorts), means that although companies cannot access individualised user data, digital marketers can still target consumers with relevant interests and demographics.

As part of the cookie-less future Google urges companies to focus on returning to building strong direct relationships with their own customers rather than relying on data from third parties. The halo effect of this being that brands which build trust with their customers offer a more engaging customer experience and benefit from brand loyalty, which the seemingly quick win of relying on third-party data has been eroding. A side effect of the cookie-less future could be, therefore, to bring back deeper and more rewarding relationships between brands and customers.