The end of cookies: What does this mean for marketing attribution?
You’ve probably heard many things about cookies, but might not be sure exactly what effect they have on marketing attribution. Cookies provide marketers with rich insights and data that help them target the right audience. With the end of cookies on the horizon, advertisers and businesses must quickly adapt to ensure their marketing efforts are of equally high efficiency, just in a more transparent way.
The main cookies we will discuss are:
- First-party cookies: These are the cookies that are here to stay. Installed by individual websites, they allow the website owner to use the data to create a more seamless user experience. For example, remembering a user’s preferred language or the items they previously had in the shopping cart. While the user has the option to block the cookies from the particular website, this means their website experience wouldn’t be tailored to them, and they would have to sign in every time they visited.
- Third-party cookies: These are the cookies that are being phased out. They are installed by websites in the background of the one you are actually on, and essentially track your activity to benefit marketing and advertising purposes.
So why are cookies phasing out?
Cookies have received a lot of attention the past couple of years, for a number of reasons. Invented in 1994 by engineer Lou Montulli, the original intention of cookies was to make the web more functional and easy to use for visitors.
Unfortunately, these same cookies have now been exploited by cybercriminals and advertisers who breach consumers’ privacy to maximise their advertising. For example, a third-party cookie might track your behaviour on another website without permission, to then target you through tailored ads, which to many people is intrusive and concerning for their privacy rights.
Lead up to the cookie phase-out
After an increased number of data breaches, users are losing trust in businesses and governments to protect their data. One of the most significant stories resulted when Facebook was fined approximately $7 Billion (AUD) for a 2019 breach that leaked more than 500 million users’ information on a website for hackers. Google has also been fined for a number of data scandals that exposed the credentials of millions, sparking conversation globally about the regulations behind cookies.
In 2018, the European Union implemented The General Data Protection Regulation (GDPR) in response to the growing concern behind privacy and human rights law. In 2020, California introduced the California Consumer Privacy Act (CCPA;) a similar legislation that enhances privacy rights and consumer protection.
In 2021, Google, the biggest search engine in the world, made the pivotal announcement that they were going to phase out third-party cookies, and not introduce any alternative to track users when browsing the web. Originally this was supposed to be implemented by 2022, however, they have now postponed this to late 2023, giving marketers and businesses more time to respond.
What will this mean for marketers?
The phase-out of cookies means there will be some pretty substantial changes for those working in advertising. These little bits of code track users’ activity and collect personal data, and then use this information to make a user’s web experience more efficient and personalised. And so, the main question now is whether there is a more transparent and data-private focused solution to being able to access the same rich data and personalise services. The general consensus from companies relying on third-party data is quite worrying, as they believe they won’t be able to track the right data and this will mean they need to increase spending to reach the same goals.
A change to marketing attribution?
One of the main marketing processes that will be affected is marketing attribution.
Marketing attribution is how marketers assess their return on investment (ROI) from the different channels they use. Being able to follow which channels are generating the most leads or conversions is valuable information that enables marketers to optimise their ROI through effective consumer targeting and resource allocation. The phase-out of cookies could mean limited data insights explaining which channels are effective, making it harder to measure performance and make strategic decisions. This will make it particularly difficult for a multi-channel attribution model, where you compare channels and identify the multiple touchpoints within a customer journey.
Effect on consumers
The phase-out of cookies won’t only affect those trying to sell a service, but also those trying to buy one. While consumers will have more control over the data they share and who they share it with, it also means their web experiences will be less personalised. Third-party cookies help target advertising on external websites to those who are likely to want their product, so it’s likely that with the phase-out, consumers will receive more irrelevant and ‘boring’ ads instead.
What can advertisers do in the face of the phase-out?
Thankfully, developers have been quick to react to the phase-out, and there are a number of new systems that have been created as a solution to promote ethical and honest data tracking.
A system like RescueMetrics acts as a first-party server on your domain that uses ‘alternative routes’ to safely track data and provide businesses with accurate information, without risking the privacy of users. RescueMetrics specifically makes it easy to stay up-to-date with changes in tracking prevention, provides accurate information, and is in compliance with the General Data Protection Regulation and the California Consumer Privacy Act.
Our team at BlueRock Digital will continue to keep you updated on all the movements regarding the cookie phase-out. A major change within the business world can be hard to navigate, therefore adaptability and flexibility are crucial in order to maintain a competitive advantage in an era of new technology and constant uncertainty.
If you want to find out more about how we can help your business with the cookie phase-out and what the implementation of RescueMetrics could mean for you, get in touch.