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ARE YOU PREPARED FOR THE COOKIE MONSTER?

Cookies! Monsters and online advertisers can’t get enough of them. But somewhere along the way, the ubiquitous HTTP cookie has itself become a monster, destined to be consigned permanently to Oscar’s trash can. So how did we fall out of love with cookies?

Since the mid 90’s, websites have used these tiny text files to improve the user experience by recording useful things like items that were added to a shopping cart or your privacy settings. But it was the arrival of third-party cookies that really transformed the web into the all-seeing, all-knowing marketing juggernaut it is today.

While a first party cookie is used exclusively by the domain you are visiting a third party cookie belongs to a different domain than that shown in the address bar and is typically attached to a specific bit of code in the site you are visiting, which are often called “tags”. By tattling to a different server than the one you are visiting about your navigation habits across multiple different sites, third party cookies allow advertisers to work out if you are a good prospect for their products or services. Because they compile long-term records of individual browsing histories across multiple sites, third-party cookies have long drawn the attention of privacy watchdogs and finally, it’s reached a tipping point.

In July this year, Safari (third party cookies were effectively blocked by ITP 2.0 in June 2018), Firefox and Brave all started blocking all third-party cookies by default. From early 2022, Google’s Chrome will do the same, intercepting third party cookies and stripping out the data so they can’t be connected back to any individual user. This means that apart from knowing which network or website you obtained visits to your landing page from, your third-party cookies will lose the ability to retarget users on different sites; a key function of online marketing.

When you consider that Chrome accounts for about 60% of internet searches, this is going to be hugely disruptive change for digital advertisers. But why would Google, the most successful digital advertising company in history, agree to cut off the hand that feeds it?

The key point here is that not all cookies are disappearing. First-party cookies will remain unaffected by the purge, meaning that Google, publishers like YouTube and e-commerce giants like Amazon, will gain a big advantage as ‘walled gardens’ of first-party customer data. This signals a shift in power, from an open internet, where cookies tracked user activity between sites to domains that harvest and sell access to their authenticated direct users. Even at the most basic level, less targeted ads and fuzzier metrics could drive increased spend as companies would need more advertising to achieve the same results as they get from targeted media placement.

The EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act attempt to protect your personal data by asking you to accept or deny the website’s use of cookies. That consent however, is universal, meaning that it could be any kind of cookie that gets dropped. If, on the other hand, you ask people if they’re ok with being followed around the internet, most will say no. Solutions, such as secure cookie storage within browsers will need to be consent driven and are off by default and because they require an active opt in, they’re likely to stay off.

People should be able to decide who uses their data but while resentment against tracking is understandable, most consumers are still happy to see personalised ads, targeted to their interests – just fewer of them – if it means a open largely free to access Internet.

This presents a challenge and an opportunity. The survival of the digital advertising industry depends on creating authenticated, proven relationships that allow you to identify and individually target customers and measure the effectiveness of your marketing spend, while giving people the choice to either consent or opt out. TA key part for making this happen is using a piece of Marketing Technology known as a Customer Data Platform.

CDPs like the N3 Hub CDP, provide a secure place to store, segment and share your first party customer data with advertising platforms, meeting privacy compliance while enabling cross-channel and cross-site personalisation. By bringing customer data, point of sale, offers, sentiment and product information together in a Single Customer View, the N3 Hub CDP generates segments that can then be uploaded directly into Google, Facebook, LinkedIn etc to create custom audiences that let you retarget customers with relevant, consistent and personalised content .

For browsers (the human kind), the price of data security and a better quality advertising experience will be more individual site logins. Logging in using Google or Facebook, while convenient, uses generates a random ID rather than first party data and it is unlikely that ID will be able to be used to match customer lists. You will have to gather and manage your own first party data to allow you to maintain effective online advertising retargeting.

The demise to third party cookies is certainly a major disruption, but it is less of an apocalypse and more a natural evolution as the online relationship between business and consumers matures and becomes more sophisticated. While it adds another stage, the move to individual logins is a win for consumers as sharing information becomes less of a steal and more about an exchange of value. For internet users that should produce more valuable interactions with sites and greater confidence and security. For publishers, it will mean working harder to win trust and build customer relationships.

But as they say, that is how the cookie crumbles.


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