Third-Party Cookies: Adapting to a New Era in Online Advertising

Google Chrome cookie changes in 2024

Google Chrome is the number one browser worldwide, far ahead of its competitors. It holds almost 66% of the market share; its closest competitor, Safari sits at just 13% (source: gs.statcounter.com).

On the 4th of January 2024, Google announced a third-party cookie restriction for 1% of users during the first quarter of the year. They plan to phase out third-party cookies in early 2025.

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So, what should we do about these upcoming changes?

Well first, let’s start with the basics.

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What is a Third-Party cookie and why does it get negative attention?

Third-party cookies are set by domains. They are often used for tracking user behaviour across different websites for purposes like targeted advertising and analytics.

Cookies, and especially Third-Party ones, have received negative attention from regulators, primarily due to the potential risks associated with their usage.

• For Privacy Concerns: cookies can be used to track users’ online activities such as browser history, preferences or behaviour. This tracking can infringe upon user privacy, especially if users are not aware of or do not consent to the collection of their data.
• For Data Security Risks: if used by the wrong person, this data can be exploited to recover personal information. This can expose the users especially if sensitive data is involved.
• For Transparency and Control: because many users are unaware of ‘What is a cookie’ and ‘How does it work’, they very often don’t understand the extent to which their data is being tracked and used. They are also often the victims of poor communication about the collection and use of their data, as well as limited control over this process.

For all these reasons, Google is working to eliminate the use of cookies across its Chrome web browser.

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What impact will Third-party Cookie changes have on my website?

The changes to Third-party cookies measures may only concern Google Chrome for the moment. However, Google Chrome’s dominant position in the market means that the changes will have a large impact on site owners and advertisers.

It is also highly likely that other web players will gradually follow Google’s example and do away with Third-party cookies.

So, here are the potential impacts:

• Tracking and ad targeting: Third-party cookies are widely used to track users across different websites, enabling advertisers to target ads based on users' browsing behaviour. Without these cookies, ad targeting could have accuracy issues.
• Measuring advertising effectiveness: Third-party cookies are also used to measure the effectiveness of online advertising campaigns, by tracking users' journey from the display of an ad to conversion (such as purchase or lead). Removing third-party cookies will add complexity and reduce reliability.
• Increased reliance on proprietary data: To target ads effectively, advertisers will rely more on their proprietary data, such as data from users registered on their websites or first-party data from partnerships with other companies.
• Innovation in alternative targeting solutions: We expect the disappearance of third-party cookies to create innovation in alternative ad targeting technologies, such as contextual targeting (based on page content rather than user behaviour) or anonymous identifiers based on technologies such as federated encryption.
• Impact on advertising revenues: Some website publishers may see an initial drop in advertising revenues and ROI, particularly if advertisers reduce their online advertising spend due to the uncertainty surrounding the effectiveness of new targeting methods.

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What has Google Introduced as part of these changes?

As part of its attempt to evolve managing user consent, Google has created the Google Consent Mode V2 tool. This tool enables websites to communicate a user's cookie consent status to Google tools such as Google Ads and Google Analytics. In other words, it respects user privacy whilst also allowing for data collection for advertising and analytics.

Using a cookie banner or widget, consent mode dynamically tracks and adapts how user data (determines if data can be used for advertising) and ad personalisation (determines if data can be used for personalisation such as remarketing) are passed to tracking platforms and third-party tags.

It became mandatory in March 2024 and requires the installation of a Consent Management Platform (CMP) or a cookie consent banner integrated with Google Tag Manager. Your website is responsible for obtaining and managing user consent on websites and ensuring compliance with certain regulations.

For more information on consent mode, you can view Google’s documentation here.

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How do I prepare my business for the end of Third-Party cookies?

It is crucial to conduct a comprehensive analysis of the cookies utilised on your website, to identify and understand the role of third-party cookies in your tracking and advertising ecosystem.

1. Audit Your Cookies

Begin by auditing your website's cookies to differentiate between first-party and third-party cookies. Understand their functions, such as tracking user behaviour, retargeting, or serving personalised ads.

2. Evaluate Impact‍

Assess the potential impact of losing third-party cookies on your tracking, targeting, and advertising strategies. Consider factors like audience segmentation, ad performance measurement, and user experience.

3. Explore Alternatives‍

Research and experiment with alternative tracking and targeting methods. This could include first-party data collection, contextual advertising, or cohort-based targeting solutions. Leverage tools like Google's Privacy Sandbox Analysis Tool (PSAT) to simulate scenarios and understand the implications of various alternatives.

4. Test and Iterate

Continuously test different tracking methods and advertising strategies to optimise performance and adapt to evolving user preferences and regulatory requirements. Monitor key metrics and refine your approach based on real-world data and feedback.

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Do you need help?

As a specialist in growth marketing, Data Story can help you identify the impact of the changes to Third-Party cookies on your website. We can provide a response tailored to your specific context and needs.  

Whether it's exploring tracking and targeting alternatives, implementing privacy-preserving solutions or adjusting your advertising campaigns, we're here to guide you every step of the way.

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This article does not constitute legal advice in terms of your use of cookies. We recommend that you obtain legal advice if you are not sure of your legal obligations.

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Authors: David Hockly & Nico Chavan of Data Story

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