As privacy concerns continue to rise throughout our country, companies need to pivot and adjust to the changing times. The latest company to announce updates to their site, due to privacy concerns, is Google. The company has made plans to remove all third-party cookies from its Chrome web browser by 2022. Apple Safari and Mozilla Firefox have already implemented their cookie removals. As this can be seen as a positive privacy update for users, this same change has the potential to affect advertisers, brands, and third-party publishers negatively. With Google’s announcement, many in the industry have begun to question the future of retargeting, cross-site tracking, and digital ad-serving. Companies that rely on these targeting elements will need to adjust their advertising strategies. Advertisers need to prepare for the shift and how it could affect their ad strategy, delivery, and results.

Advertisers and web browsers have used third-party cookies for years. The information captured by these cookies has helped improve the ad experience for many. One example of this improved ad experience is when an ad displays products left in a cart abandoner’s shopping cart. Even though cookies have provided advertisers with beneficial information, many privacy concerns have arisen from their use. Many organizations worry about the potential misuse of users’ collected information. Users have also become aware that third-party organizations collect the individual’s information without one’s consent. These concerns have led to many internet users seeking cookieless alternatives. Currently, Chrome holds the most significant browser market share. For the company to keep its browser market share and continue to run its ad business, Google needed to develop an alternative solution for advertisers and publishers. This new system is Privacy Sandbox. Privacy Sandbox will keep the efficiency of Google’s ad delivery intact without the use of third-party cookies. Even though Google utilizes third-party cookies, it also collects first-party data through its Maps, YouTube, Android, Google Home, Gmail, and search bar services. This data will not be affected by the cookie removal and could prove to be even more valuable once the third-party data is removed.

Using browser APIs, Google’s Privacy Sandbox will provide anonymous user data while still allowing behavioral targeting. The project is still in the early stages of development; however, we know some basic details of how it will work. Through the use of 5 APIs, the system will work in reporting, targeting, and fraud detection. Below are seven elements that will make up the system and what they will help to accomplish.

  1. The Aggregated Reporting API will be used to provide ad performance-related information in a single report. This report will include impressions, clicks, reach, etc.
  2. The Trust Token API will allow publishers to differentiate between human and bot users through form fills and cryptographic tokens. This process will prevent sites from tracking users and disrupting a user’s privacy.
  3. Through the Conversion Measurement API, advertisers will be able to determine how an individual converted.
  4. A Privacy Budget will be allocated for sites to retrieve data from the APIs. This budget will only allow necessary user data to be passed on to the website.
  5. Users will be grouped based on their interests through the Federated Learning of Cohorts. These groups will only use data from a user’s browsing history to determine interests. These groups will help in keeping personal identities anonymous.
  6. The Turtle Dove API will allow advertisers to target the interested-based groupings.
  7. Lastly, publishers will be able to declare multiple domains as owned by the same party through first-party sets.

Even though this system will replace third-party cookies, advertisers will still lose targeting capabilities they have grown accustomed too. Advertisers will no longer be able to utilize cross-site targeting unless the sites are owned by the same publisher. They will also no longer be able to incorporate granular targeting, as the Privacy Budget ensures that the user data disclosed from the system is limited. With this broader targeting approach, we can expect to see lower CPMs than we previously have with highly targeted granular audiences. Even with this information, advertisers need to remember that the system is still developing and has two years before its implementation. Changes may occur between now and 2022.

In addition to this Google update, advertisers need to be prepared for advertising technology companies to respond with their solutions. One company adjusting its structure is the digital advertising system, Criteo. This system relies heavily on its cookie-based audience databases for retargeting. Immediately after Google’s announcement, Criteo’s stock crashed. Criteo has begun to bounce back after announcing its solution that will focus on utilizing first-party data. If you currently work with an advertising technology system that heavily relies on third-party cookies, check with your provider to see if they are taking any steps to update. If not, you need to think of other solutions to utilize for your brands.

Advertisers should also begin to build their own first-party database if they have not already. This database will help advertisers become less dependent on third-party data and ease into the transition away from cookie usage. First-party data is the information you collect from your web audiences. This data can consist of your site visitors, email subscribers, survey participants, etc. Through the use of Google Analytics and page view analysis, you can classify your data even further. These details can include demographic information, purchase history, interests, and so much more.

In addition to all of these data changes, advertisers need to be prepared to adjust their strategies to rely less on third-party cookie data. These may be uncertain times, but as digital advertisers, we need to adapt to continue to drive successful results. Below are some tactics advertisers can begin to test.

  1. Begin to focus on longer-term brand-building activities versus short-term tactics, like retargeting. Many believe once cookies are removed, digital advertising will shift to target customers earlier in their journey while working to change behavior versus accelerating purchases.
  2. Test the addition of CTV and brand marketplaces that do not utilize third-party cookies for targeting. Even though streaming service usage continues to grow, some advertisers have been slow to test this platform. With the third-party cookie removal coming into effect, now is the time to begin your testing. Advertisers should also add brand marketplaces to their marketing mixes. Many times these brand marketplaces can help generate more conversions at a lower CPA. Amazon is one platform where advertisers can reach those further in the sales journey.
  3. Further rely on contextual based ads. These ads allow you to focus on the website your advertisement is placed versus the individual characteristics of users.
  4. Facebook, Instagram, and YouTube are also great platforms to focus your digital efforts around. Advertisers can utilize search strategies and video ads on these networks to reach the already established curated communities found on these sites. These sites continually generate qualified business leads.

With the ever-changing digital landscape, advertisers and publishers need to be prepared to adapt to the current environment. Even though Google’s third-party cookie data will not be removed until 2022, the digital advertising industry needs to start preparing now. This will be the only way to ensure a seamless transition.