What Will Replace Third Party Cookies?

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Google / 25 May 2022

What are Cookies?

In the online industry, cookies aren’t the small baked goods topped with chocolate chips that you’re probably used to. Instead, HTTP cookies, short for ’magic cookies,’ are small packets of data used by computers. They are pieces of information created by a web server and sent to a device. Such as a computer or a smartphone when a user browses the web.

Their purpose is to help websites remember information about users and their browsing behaviour to provide a streamlined user experience. 

The information stored within a cookie may include details regarding language preferences, ads relevant to search behaviours, data protection or the number of visitors to a particular webpage. 

Different categories of cookies collect various types of information to be used in other contexts: 

  • Cookie-based session management allows websites to retain login details so that users don’t have to sign in every time they enter the site; 
  • Personalisation cookies present relevant advertising that appeals to a user’s interests;
  • Tracking cookies help websites keep track of users as they come and go from a site. E-commerce sites will use tracking cookies to store the item’s within their customers’ baskets and suggest similar products to those they’ve already clicked on. 

Cookies benefit both the consumer and the company running the website or a particular ad. They create a seamless user experience and collect valuable data about consumers’ online behaviour and interests. This data can influence the creation of improved content, build new features on websites, and improve how users interact with a service. 

What’s the Difference Between First and Third-Party Cookies?

There are plenty of different cookies used to track and store information. However, technically speaking, they all contain the same data. The main difference used to categorise cookies is how they are created and used by websites. Most cookies are categorised as either first or third party cookies.

What are First-Party Cookies?

First-party cookies are created by the host domain or website that a particular user is visiting. They help create a better experience for users whilst also storing practical information about their behaviour and experience. 

When clicking between pages, first-party cookies will ensure that a session stays open. The website will remember the user and provide tracking information such as the items in their shopping cart or log in details. 

First party cookies help marketing teams collect analytics data about their users, contributing to site improvements and content updates. This data may include session time, bounce rate, or website journey. These metrics enable companies to improve a user’s experience by helping them reach pages more efficiently and achieve target goals.

Are there Second Party Cookies?

The existence of second party cookies tends to be a source of contention. It is suggested that they should be labelled ‘second-party data’ rather than ‘cookies.’ This differentiation occurs due to the collection and purpose of the data within the cookie. 

Second-party ‘cookies’ are first-party cookies stored by a website when a user visits a website. The whole data file is then transferred or sold to another party by mutual agreement or partnership. Therefore, second party cookies are data collected by one website and sold to another party.

What are Third-Party Cookies?

Third-party cookies are generated by websites other than the one visited by a user. They are created by ads linked to external domains. This means users may receive a cookie from a website other than the ones they visit.

The three primary purposes of third-party cookies are cross-site tracking, ad-retargeting and ad serving. 

Cross-site tracking relates to following the trail of breadcrumbs users leave as they explore the web. Moving between different websites or tabs within a session generates a collection of information about a user’s behaviour and current preferences. With this data, companies can instantly target an individual with ads for a product or service that their search behaviour suggests they are interested in.

Unlike first-party cookies, users generally won’t be aware when a third party cookie has been stored on their device. This creates some controversy about users’ privacy as they may not have consented to the collection of their data across different websites. 

Why are Third Party Cookies Crumbling?

Whilst third party cookies provide vital information for marketers, there is significant contention in the lack of privacy and security associated with their method of gathering data. Numerous complaints regarding the invasion of privacy are associated with the non-consensual collection of data. 

A common trend of rejection of third party cookies by users has recently surfaced, causing problems for marketers. Consumers are increasingly cautious of who collects their data, turning to ad blockers, VPNs, and deleting third-party cookies. Whilst protecting their privacy, they eliminate data precious to advertisers.

What’s becoming even more concerning is the development of data privacy regulations and the moves to limit the collection and use of third-party data. Some platforms such as Apple’s Safari browser and Mozilla Firefox have already implemented a block against third-party cookies by default. 

Google has also recently announced that they would phase out support for third-party cookies in the Google Chrome browser across the next two years. 

Google Topic API

An Alternative to Third-Party Cookies?

Topic APIIn the interest of protecting the privacy of its users, Google is planning to implement interest-based advertising without the need to track the behaviour of its users. 

Currently, in its trial period, Topic API will infer topics of interest to the user within a certain period and present them to participating websites and advertising companies to target specific consumers. 

Google is currently planning to introduce their new system in late 2022. It will be launched within the Chrome browser and provide a 9-month window for advertisers and marketers to migrate services. After this period, the tech giant will phase out support for third-party cookies on the Chrome platform over three months, entirely removed by 2023. 

How it Works:

During a period of one week, browsers will infer areas of interest for a user based on their browsing behaviour. Information from website URLs is used to generate a list of frequently visited topics. The most significant topics of that week will be assigned to the user’s Topic API. The next time that individual visits a website with ad space, advertising companies or websites can select ads based on the suggestions provided by Topic API.

This new system has been designed for compromising between personalisation for user experience and privacy protection. The data tracing occurs on the device used to browse the web. And data is stored for no longer than three weeks; as a result, the information won’t be shared with external servers. This guarantees that consumers’ data is protected whilst receiving a seamless user experience.

Limitations for Advertisers

Whilst there is still time for optimisations and adjustments to be made before its release, industry experts have been quick to point out some of the limitations of the proposed new system. 

There are significant concerns over the interest targeting latency due to the browsing period of three weeks that assigned interests are based on. Advertisers are concerned about wasting their budgets on serving ads to consumers who purchased similar products weeks before they reached them. Noise pollution from unrelated topics can also contribute to wasted resources. 

To maintain and moderate the topics provided, Google will generate a catalogue of topics which reflect various industries and interests. They may include ‘fitness and health’ or ‘travel and transportation.’ Users will be assigned one topic from the catalogue per week and five from their inferred areas of interest. Advertisers may become frustrated that their ads reach audiences with little or no interest in their product or service.

Amongst these issues, there are also points regarding the lack of priority given in the list of topics, as these will be issued in random order rather than interest order. 

Additionally, the topics could lack accuracy due to the use of hostnames rather than page content or any other URL information to determine the topic.

The increasing use of ad blockers and limitation of third party data collection across the web has also seen marketers struggle to track and adjust the performance of their social media ads accurately. However, Meta has made efforts to mirror the concept of Google’s topic API system with ‘Conversions API.’

This system allows advertisers to track their data without relying on third-party cookies. It allows for the collection of data on conversions, page visits, and vital components of the sales funnel. To allow companies to implement the data within ad targeting and conversion optimisation on Facebook. 

Final Thoughts

Changes to the current cookies system are being made to provide relevant, personalised advertising to customers whilst protecting their privacy. It is worth noting that websites’ current use of first-party cookies will remain the same. Providing companies with data on users’ interactions and experiences. However, data regarding cross-site tracking and consumers’ interests will no longer be available as freely as third-party cookies allow. 

Google Topic API presents a method of engaging with consumers’ interests and serving relevant ads. But in a way that doesn’t track their web movement or specific interactions without consent. 

A change in attitude towards online data privacy has long been expected. As such, it’s not a massive surprise to many digital marketers. While plenty of advertisers will have to amend their third-party cookie data reliant methods, the new system is a welcome change for many. 

 

Contact our team today at Pinnacle Internet Marketing for more information.

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