What are Third-Party Cookies?

Cookies are files that are generated automatically and stored on your computer when you visit a website. These cookies improve the user experience by remembering your basic information, sign-up data, passwords, and user preferences. First-party cookies allow websites to track user preferences and data while visiting their sites; however, they cannot see what the user did across other websites.

Third-party cookies are pieces of code that exist on the website a user visits. These codes store user browsing data, settings, history, and other user information. Third-party cookies carry over the information to another site (which is different from the initial site) – often an advertising site. As such, advertisers use third-party cookies to collect user information and make more targeted advertising. For instance, if you are looking for dresses, you will find different dress advertisements if the site is collecting third-party information.

Third-party cookies help advertisers learn about customer behavior, interests, purchases, and patterns across different websites. Initially, third-party cookies were enabled automatically by default, and users had to disable them manually. However, websites are now required to ask for consent to collect data through third-party cookies. 

If you are an advertiser tracking your customer’s data while they are on your website, this new phase-out by Google will not impact you that much. But if you are an advertiser that relies heavily on third-party data for online advertising and a more targeted audience engagement strategy, you might have to consider alternative first-party cookies. 

The Use of Third-Party Cookies in Advertising

Third-party cookies bring many benefits to advertisers. They help advertisers understand their customers better by collecting user data across a range of different websites. Third-party advertisers can display more individualized and personalized ads. This may enhance the overall user experience. Users see more relevant ads based on their preferences and click on them, which creates revenue for advertisers. Third-party cookies often collect more information than first-party cookies. However, with increasing awareness about data security and privacy concerns, third-party cookies have been heavily criticized by experts and academics.

The end of third-party cookies for advertisers could have serious implications on their revenue. There are many alternatives that advertisers can use for data collection. These include universal identifiers (UIDs) – similar to cookies but more privacy-centric, seller-defined audiences, making cohorts of audiences, and contextual targeting. A combination of these different techniques can allow advertisers to effectively understand their customers and personalize advertisements.

Waning Support for Third Party Cookies

The dramatic wane of third-party cookies is not a surprise to many. Many governments across the world have been initiating a crackdown on data security and privacy issues. For instance, the European High Court ruled that EU users have to consent to all cookies and analytics if they are logging into a website. If they do not consent, the website cannot collect any data or analytics from the user’s browser. 

As mentioned above, Google is not the first browser to remove third-party cookies. Mozilla Firefox and Safari automatically block third-party cookies. With the new change, Google Chrome will block third-party cookies by default by the end of 2023.

Google’s Continued Delay on Third-Party Cookie Removal

Originally, Google announced that it would phase out third-party cookies at the beginning of 2022, and that was delayed to the end of 2022. Now the date for the death of third-party cookies has been postponed until the end of 2023. Currently, Google is in a very difficult situation – a kind of double-sided sword. If it cuts third-party advertising to address the regulators’ and users’ concerns relating to privacy, it will find itself the only company that dominates the advertising tech ecosystem. Google will dominate advertising, search engines, and browsers. The more Google cuts third-party advertising, the more it increases its dominance in the ad space. And if it does not cut third-party cookies, it will come under greater scrutiny from the government and regulators. 

It is not clear how Google plans to approach the issue. There is uncertainty regarding whether they want to completely remove third-party cookies or give customers more autonomy, control, and transparency while maintaining third-party cookies. Irrespective of the steps Google takes to address the issue, advertisers have alternatives to reach customers and collect information (even if not through third-party cookies).

Earlier in August, Google announced that it is creating something like a “Privacy Sandbox” – a secure environment for personalization that protects user data and privacy. Under the Privacy Sandbox, all the user data can be stored and processed securely into a Chrome browser. The data remains on the user’s device and is compliant with data storage regulations. However, the current Privacy Sandbox schedule falls short of details of how data will be stored and processed.

Final Words

With Google’s efforts to phase out third-party cookies, advertisers that heavily rely on third-party cookies for their advertising should seriously consider alternative methods. Data privacy and security concerns are not trivial issues. The key to success is implementing a privacy-first approach to data collection and advertising. Looking for alternatives is highly relevant at a time when users use more and more devices to make purchases and browse products. Collecting data across the web does not give a comprehensive picture of user preferences. Therefore, even if Google decides not to block third-party cookies, advertisers should still look into better alternatives that help them get a more holistic view of customer information. As such, the current delay by Google provides a window of opportunities to advertisers to seek and implement various alternatives and test what works best for them. 

At Publir, we provide solutions for subscriptions, ad optimizations, merchandising, fundraising, and AdBlock recovery. Committed to increasing your ad revenue, Publir deploys brand-safe ads, a crowdfunding widget, and a subscription paywall to appeal to your customers.

The post Google Delaying Third-Party Cookie Removal to 2024 first appeared on Publir.

Since third-party cookies are the primary way the ad industry has tracked users and measured the effectiveness of online advertising, this phase-out of cookies could have detrimental effects on the industry. Google, which derives a lion’s share of its revenue from ads obviously has a vested interest in ensuring the ad ecosystem stays healthy. So it has come up with various proposals that would safeguard privacy while enabling the ad industry to flourish. 

What Are Google’s Alternatives To Third-Party Cookies?

Google proposed a set of alternative measures, including Privacy Sandbox, Cohort-based tracking, and Turtledove to collect information for advertisers while ensuring user’s privacy. The basic aim here is to establish an operating system that ensures healthy web practices, while still being able to serve relevant ads and track their performance. 

Google also stated that it will aggressively block non-cookie-based cross-site tracking practices like fingerprinting, cache inspection, link decoration, network tracking, and other Personally-Identifying Information (PII).

Privacy Sandbox

Google’s Privacy Sandbox proposes to introduce a set of privacy-preserving APIs to operate the open web in the absence of third-party cookies. The privacy sandbox acts as a monitoring authority by not letting the user’s browser track any information related to the user’s personal identity while measuring information on Ad-selection and conversion for publishers and advertisers. 

Privacy Sandbox, in a way, offers a protected ecosystem for the user’s personal information. Under the stated ideal conditions, users would enjoy all the privileges of browsing the web with confidence that browsers are there to take care of their privacy. The proposed system will also allow the user to turn off any personalized advertising without degrading user experience on the web. 

Cohort-based Tracking

Cohort-based tracking allows advertisers to target consumer behavior in aggregate based on the places they visit rather than being able to target users individually. A  number of FLoCs (Federated Learning of Cohorts) are made available on browsers to collect these details without infringing on the privacy of the consumer. Advertisers can decode this data for making decisions based on the ultimate action of the visitor after having browsed the site. This is still at a very formative level and several questions are emerging on how Google would execute this model.

Turtledove Model

Turtledove offers a privacy-first method for retargeting users who have previously interacted with an advertiser or ad network. This model proposes to completely re-architect the current system so that user behaviors are not stored in a remote database but are stored in a browser. The key to how ad auctions run within this new system is found in TURTLEDOVE’s name, which stands for ‘Two Uncorrelated Requests, Then Locally-Executed Decision On Victory’.

TURTLEDOVE isn’t a usable API yet, so it is difficult to specify how and what all would change until it is implemented. But it gives an early indication of how web-based advertising might look in the future.

How Effective Are Google’s Alternative Measures?

Google’s proposed alternative measures will allow Ad-targeting, Measurement, and Fraud Prevention to happen according to the standards set by its Privacy Sandbox and aim to replace cookies with five application programming interfaces. Advertisers will use API to receive aggregated data about issues like conversion (how well their ads performed), and attribution (which entity is credited, say, for a purchase). 

Privacy Sandbox will provide an alternative pathway for the Ad-industry to rely on anonymous signals within a person’s Chrome browser to serve relevant ads. This model, according to Google, allows content creators to operate without any gatekeeping mechanism and while allowing end-users to access information freely. 

These measures have definitely been designed keeping in mind the privacy of the user, and the effectiveness of them can be analyzed once these measures are implemented and the users are introduced to the cookie-less world. 

The Takeaway 

While Google’s proposal seeks to provide alternatives to support the ad ecosystem instead of simply blocking third-party cookies as done by competing browsers, there are still several challenges to overcome.  The main concern is Google’s already near-monopoly domination of third-party advertising. There is widespread fear that the adoption of Google’s solution would further entrench the company’s monopoly and make it hard for competitors to thrive. The other being that the current ad-supported web business model relies heavily on the existence of third-party cookies. Information dissemination on the web as text, images, videos, and graphics in the form of ads, content, and other formats is taking place on the existing model. How Google’s measures will be adopted by the wider ad industry is still unclear.

The post Effectiveness Of Google’s Alternative Measures In Replacing Third-Party Cookies first appeared on Publir.

Browser Background Information

Chrome is the world’s most used browser and is still using third-party cookies. However, Google has said that it will end Chrome’s use of third-party cookies entirely by 2022. 

In 2017, Apple gradually began increasing cookie restrictions that started with the introduction of Safari’s Intelligent Tracking Prevention (ITP). By March 2020, Apple had blocked all third-party cookies by default for all users with the release of Safari 13.1.

Firefox, beginning in June 2019, enabled their Enhanced Tracking Protection by default for all new users. This feature blocks third-party cookies, making it much harder for advertising and tech companies to track a Firefox user. 

Edge, unlike Firefox, does not block third-party cookies by default. There is no tracking protection in Edge’s private-browsing mode either. 

2020 Usage by Browser*

Safari browsers

We found that a small percentage of people on iPad are still using the older version of Safari that allows for third-party cookie tracking. This version of Safari had a CPM 3x higher than the CPM for users with Safari 13 that does not allow for third-party cookies on the same device. Similarly, for iPhone Safari users, the pre-third party cookie blocking browsers generated a CPM that was 2.5x higher than the CPM by Safari 13. 

Chrome browsers

According to our data, the ad CPM for Chrome users, despite the device type, are significantly greater than those generated on post-third party cookie Safari browsers. We also found that the ad CPM for Mac Chrome users was similar to that of pre-third party cookie blocking Safari browsers. Our data also indicates that:

• The latest version of Windows Chrome browser CPM was 3x that of the Windows Firefox CPM. 
• The latest version of iPhone Chrome CPM was 2.8x that of the latest version of iPhone Safari 13 CPM.
• The latest version of iPad Chrome CPM was 3x that of the latest version of iPad Safari CPM.
• The latest version of desktop Mac Chrome CPM was 3.6x that of the latest version of desktop Mac Safari CPM.

Publisher ad revenue is largely affected by the browser choice of their users. For the browsers in which third-party cookie tracking is enabled, such as the older version of Safari and current versions of Chrome, CPMs are significantly higher than all browsers that have disabled third-party cookie usage.  We estimate that if Google blocks third-party cookies by default in Chrome as expected in 2022,  this could result in revenue declines of up to 40% unless publishers implement measures to mitigate this loss. 

Check out what Publir’s doing to prepare for the deprecation of Chrome’s third-party cookies here. 

The post Impact of 3rd Party Cookie Blocking on Ad Revenues: What our Data Shows first appeared on Publir.