A day without third-party cookies is looming: By late 2023, Google plans to eliminate the use of third-party cookies in Chrome—a browser used by an estimated 3.04 billion people worldwide, essentially disabling how most of our advertising and technologies work today.
Third-party cookies have been a backbone of the marketing industry for the past decade. They allow ad platforms to trace individual users across the Web, understand users' habits and interests, and then serve ad content that is relevant to each user's browsing history.
So why is Google removing valuable third-party cookies and wreaking havoc on the marketing world? The answer comes down to concerns about data privacy. Google and other ad tech entities are under scrutiny for their data practices, and those practices began to be regulated with the passage of the GDPR by the European Union a few years ago.
Privacy firms are also concerned about personally identifiable information (PII)—including full names, bank account numbers, and Social Security numbers—that can be collected from third-party pixels. People question whether entities (such as ad tech companies) collect PII that could be used on a wider scale or without consent from users. The idea is that those privacy concerns will be mitigated with the removal of third-party cookies.
Other Ad Tech Privacy Announcements That Address Concerns About Data Privacy
When discussing Google's new changes to third-party cookies, it is also imperative to acknowledge two major privacy modifications Apple recently announced. After all, about 1.65 billion Apple devices are in use worldwide.
Perhaps the most important announcement is that Apple is blocking the use of third-party cookies on Private Relay. The company stated that it will now send all Web traffic through two separate servers, obfuscating the IP addresses to ensure they are truly removed. Even Apple itself cannot gain access to IP data.
The company also announced a new initiative called Mail Privacy Protection, which disables marketers' ability to place pixels on emails that would have captured open rates. The Mail Privacy Protection effort will make it more difficult to measure the success of email campaigns, and it will also hide IP addresses.
Solutions for Replacing Third-Party Cookies in Chrome
When Google announced its plans for the removal of third-party cookies in Chrome, it left the industry spinning about how ad tech would function in the future. To reach a solution, Google introduced a Privacy Sandbox where ad tech companies, marketers, and website engineers could submit proposals for potential alternatives to fill the void left by third-party cookies.
Other companies, such as The Trade Desk and LiveRamp, began testing their own identity solutions: Unified ID 2.0 and Authenticated Traffic Solutions, respectively.
Many of the proposed solutions rely on a pixel placed on websites that collects users' data (such as email address) when they subscribe or log in to an advertiser's or publisher's site. Once the data is collected, the user's PII is hashed, making it anonymous. The anonymous ID is thrown into an identity bank that categorizes users by their interests and habits. Ad servers can then tap into that identity bank and target a group (not an individual user, unlike third-party cookies) with a relevant ad.
Such a process allows users to give consent for their data to be tracked and applied in the advertising field, which should overcome many concerns about data privacy.
