How to Target Your Audience Without Third-Party Cookie Data

November 4, 2021
Contributor: Amita Jain

Explore the challenges and opportunities that lie ahead for marketers as we near the end of third-party cookies

Publishers provide content relevant to users, marketers sponsor the content with adverts, and users give their data, intentionally or unintentionally, to access that content. That’s the arrangement that has fueled data-driven performance advertising in the past two decades — and it’s nearing a tipping point with the death of third-party cookies.

Google has declared it will no longer support third-party cookies by late 2023 because they invade users’ privacy. Safari and Firefox, the two most popular web browsers after Chrome, already block them by default. Similar limitations are being placed on mobile ad identifiers (MAIDs) by both Google and Apple.

As these tracking technologies depreciate, advertisers will face more difficulty targeting ads, gathering information about buyers, and measuring performance for marketing campaigns. 

If you’re a marketer, it’s time to understand the implications of a cookieless world on digital advertising, and how you can prepare for the future.

What are third-party cookies?

Third-party cookies are set by a domain other than the one visited by a user. They are used to identify a user across websites and profile them to send highly personalized ads based on their interests, sites they visit and other online behavior.

The problem with third-party cookies is that the data they capture and share is hard for users to control. It gives them no visibility into which companies are processing their data and when they are being followed across the internet. As concerns around internet privacy prompt regulators to mull data governance, it’s important that marketers create transparent standards for user privacy and find better means to collect user data. 

Key events leading to the end of third-party cookies:
  • 2016: The European Union adopts the General Data Protection Regulation (GDPR), requiring websites to get explicit user consent before tracking them with cookies.
  • 2017: Apple’s Safari announces intelligent tracking prevention (ITP) to block third-party cookies.
  • 2019: Firefox launches enhanced tracking protection (ETP) and later announces it will block all third-party cookies by default.
  • 2019: Safari announces ITP v2.1 to block all third-party cookies by default.
  • 2020: Google declares plan to make third-party cookies obsolete by 2022.
  • 202: Google announces restricted use of Android IDs by the end of 2021.
  • 2023: Revised end-of-year deadline to phase out third-party cookies in Chrome.

How the loss of cookies impacts B2B marketers

Understanding buyer intent to target and retarget ads is the most common reason B2B software providers use third-party cookies. 

For example, if a customer relationship management (CRM) software provider wants to target new offers to the hospitality industry in Las Vegas, it’s better to target prospects who are at the selection stage of their buying journey — those scouring CRM software reviews, who have seen similar ad offers or who have visited their website. 

Third-party cookies allow B2B marketers to identify such leads and buy impressions based on individual viewers’ behavior. Without cookies, ad targeting will take a hit. Programmatic advertising, the automated practice of buying and selling ad space, will also become more difficult and expensive.

Many, however, believe that even in the current cookie-enabled form, third-party cookies don’t work all that well. The attribution accuracy of third-party cookies has often faltered with poor consumer identity match rates between 40% and 60%. These developments are also an opportunity for marketers to find better ways to communicate with audiences and run effective targeted advertising, in a privacy-friendly way.

Changes in digital ad targeting: Three possible scenarios

As the rules of digital advertising get rewritten for the new era of privacy, Gartner predicts three scenarios that can emerge from the ongoing tensions between three power centers (full research available for Gartner clients).

Power struggle trilemma framework

Use these scenarios to understand what’s next for digital ad targeting and measurement amid the shifting landscape of privacy laws and data governance.

Three potential market outcomes of privacy disputes:

1. Walled gardens

In this scenario, big consumer-facing platforms (Google, Facebook [Meta], Amazon) continue to increase their dominance with the collection of massive amounts of first-party data, forming walled gardens with restrictive access to that data, while independent data brokers falter.  

You must prepare for this scenario by nurturing your own first-party data matching and consolidation capabilities as walled gardens will presumably share data only at aggregate levels rather than providing user-level identity resolutions. Also, keep monitoring announcements by big providers, such as Privacy Sandbox by Google, for new postcookie advertising solutions.

 2. Consent economy

In this scenario, antitrust violations and other actions by legal centers keep a check on large platforms’ ability to leverage customer data. As a result, a strong consent economy rises in favor of the most trusted publishers. 

To prepare for this scenario, you must invest more in building privacy-compliant identity resolution solutions, and partner with large and trusted publishers as well as small vendors.

3. Identity Innovation

In this scenario, the increased focus on data governance leads to new models of privacy and digital identity enabled by new technologies such as virtual personal assistants (VPAs) and blockchain. This will remove the need for acquiring site-level consent and provide advertisers with the data they need on time.

Prepare for this scenario by partnering with identity resolution providers and data agencies, working on testing and piloting alternatives to user-level data matching.

Whichever power center prevails and users choose to trust, marketers with access to user data will succeed at the expense of those who lack it. As you wean your advertising spend from third-party cookie data, strengthen your marketing campaigns with other data sources.

Making the most of non-third-party cookie data

Nurture these alternative sources to gather information about your users and achieve similar levels of personalization while balancing concerns around privacy.

1. Double down on first-party data collected with consent

To succeed in the world without cookies, employ a first-party data strategy and refocus on consent-based advertising by obtaining users’ informed consent before collecting their data.

You can source first-party data either internally, by gathering information from users via your website and during other interactions, or it can be collected on your behalf by an ad agency, through ad performance or a survey. This data will become quite valuable as third-party cookie data ages. 

When done right, first-party data can be used to team up with publishers and advertisers to map out user behavior for better ad targeting and intent data measurement.

Recommendation: Marketers responsible for collecting first-party data should:
  • Design multiple compelling touchpoints to collect relevant data along the buying journey. Loyalty programs, rewards and solution-oriented content can encourage users to share data.
  • Assess if you have the infrastructure and competencies for data and analytics before collecting the data. 
  • Map out your dependencies on cookie data and quantify its impact on costs and revenue. It will help you decide how much to wager on your own data collection methods.
2. Enter direct relationships with large publishers

Partnering with large and trusted publishers that collect first-party data, from within or outside your industry, can be a solid kickoff strategy to leverage alternate data wellsprings without a major investment.

Publishers and reviews sites know a great deal about the interests of audiences they serve based on content consumption. You can use data from these platforms to enhance the measurement and planning of your marketing campaigns.

Recommendation: Marketers leveraging direct publisher partnerships should:
  • Look for publishing platforms that your targeted users visit and trust for making purchase decisions. While Google, Facebook/Meta and LinkedIn are huge publishing platforms, software providers may find technology reviews sites as more fitting partners.
  • Use platforms with high volumes of user data sourced from website forms, customer reviews and surveys.

Sourcing first-party data in such a manner makes it second-party data. Among a few challenges for marketers in collecting this data is to figure out how to share secondary data while ensuring user privacy. Collaborative clean rooms and differential privacy are some high-value-add options that promise to link anonymous data from multiple parties (full research available for Gartner clients).

3. Use contextual advertising for nonpersonal targeting  

If consent solutions come up short, marketers can also bet on contextual advertising, particularly for upper-funnel goals such as awareness. 

Contextual advertising focuses on the page instead of the user. It helps marketers position ads based on the content of the webpage, expecting that users with certain collective behavioral attributes will visit that content.

It takes advertising beyond personal targeting and creates personalized marketing while minimizing the need for consent.

Recommendation: Marketers using contextual advertising should: 
  • Analyze content to develop taxonomies that can, at least partially, automate the advertising process, making it easier to reach the target audience.  
  • Encode structured content descriptions to use for ads, making ad measurement simpler and comparable.

Next steps

Third-party cookie data that long powered digital advertising is going away. It will shake up the marketing world, but provides the ground for marketers to rethink and restrategize alternatives that deliver a better experience for users and advertisers.

Keep an eye on the new developments from walled gardens and other power centers as you overhaul your digital advertising playbooks.

Amita Jain

Amita Jain covers B2B content creation and strategy to help businesses reach their marketing goals. She received her master’s degree from King’s College London, United Kingdom. Exploring the world of art and reading fiction are some of her usual happy distractions outside of work. Connect with Amita on LinkedIn.

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