Death of a Cookie is Nigh. What Does It Mean for Small Business? 

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The tracking cookie is continuing to crumble. Google is planning to phase out the third-party cookies on the Chrome browser by 2023. Maybe you’ve heard your marketing team talk about this but are not sure what it means. Well, it has big implications for advertising, and especially for small business owners. 

If you’re still a little confused about what cookies are and what impact removing them will have on advertising, don’t worry we’ve got you covered. In this article, we talk about what cookies are, when ‘the death of the cookie’ will happen, what effect it will have, and possible options to replace it. 

The Death Of The Cookie

At the beginning of 2021, Google released a blog post with updated timelines for the planned phased out of third-party tracking cookies. Before it had planned to phase them out by 2022, but this date has been pushed back to the end of 2023. 

“Chrome could then phase out third-party cookies over a three-month period, starting in mid-2023 and ending in late 2023.” 

The change is part of a collection of browser adjustments that are being released under the name “Privacy Sandbox.” These changes are Google’s reaction to the increased concern many internet users have over privacy. 

But you may also be thinking that Chrome is not the only browser in existence. If only one browser phases out third-party cookies, is it really the ‘death of the cookie’? Well, that’s true. However, Google does makeup almost 60% of the browser market. In addition, the other major players in the market, Safari, and Firefox have already phased out cookies. 

How Will Small Businesses Be Affected? 

Third-party cookies have been an integral part of advertising and were particularly used in ad technology to identify the user. Audience targeting will be the biggest area of marketing affected. 

Audience targeting is expected to become more difficult. Cross-site targeting will become a strategy of the past and personalized ads will be much more difficult to display. 

Forward-thinking small businesses should start collecting and using their first-party data in their ad strategies. This is data that comes from your CRM, social media, offline contacts, etc. 

With this data, you will be able to combat some of the damage that the death of the cookie will bring. You can use your first-party audience information to set up retargeting campaigns and advertise and sell more to your loyal customers.

What Will Replace The Cookie?

When Google announced its plan to stop using third-party cookies, many businesses saw an opportunity to fill a gap in the market. Businesses have looked to ad tech to create a solution that could replace the cookie.

There are several alternatives currently available that have the potential to replace cookies. 

FLoC

FLoC stands for Federated Learning of Cohorts. It is a Google solution to the third-party tracking problem but is still in development. 

In theory, FloC should track all the websites that a user visits. It then combines the data into ‘cohorts’ of interests that will be used for the targeting of ads.

How The Algorithm Works:

  • Browser users are placed in groups based on their browsing history
  • No data is sent to external servers
  • Targeting is based on cohorts that users are assigned to rather than a user ID
  • You cannot track a specific user between websites
  • Each cohort must have 1000 users to be targetable

Universal IDs

There are several Universal ID solutions currently available from a wide variety of ad tech companies.

Universal IDs work with data that publishers obtain with user consent. This data is usually given when they sign up for or download a resource online. Identifiers work with encrypted emails and phone numbers.

With Universal IDs, you can track users across platforms or devices. For example, when a user jumps from their browser to their phone app, this can be followed with Universal IDs.

Contextual Targeting

Contextual targeting works by displaying ads to users based on the section of a website that they are visiting. This does not require user data such as interests and works based on the content of the website or page that is being visited.

For example, if you have a website that is about cars, you may have several sections broken up by type of car – off-road, sports, electric – and then further sub-sections. Then ads can be displayed based on what the implied interest of the user would be which can be ascertained from the content they are viewing. 

The success rate of contextual ads would largely be dependent on the individual website and how well its schema is set up. 

To Sum Up

The death of the cookie is coming. But you don’t need to worry. You still have plenty of time to adapt your ad strategy to work without third-party cookies. It will be a big change but many great alternative solutions are being developed and will help smooth out the transition for advertisers and publishers.

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Founded in 1994 by the late Pamela Hulse Andrews, Cascade Business News (CBN) became Central Oregon’s premier business publication. CascadeBusNews.com • CBN@CascadeBusNews.com

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