We Didn’t Waste Our Money Preparing For The Cookie Apocalypse

On July 21st Google protected nearly $238 Billion in digital advertising revenue (2023) when they announced they would not be deprecating third party cookie tracking… ever. This, after three previous delays dating back to 2021 with the most recent being April of this year. If you are like a large portion of digital marketers you are facing some interesting questions about your decisions to invest in 3PC (aka third party cookies) alternate technologies and strategies. I know I am. So I thought it would be nice to save you some time since I’m doing the work anyway. I’ve put together a quick synopsis of the events leading up to Google’s decision as well as strategies to help you answer those questions.

Google Was “Trying” To Deprecate Cookies

Consumer and regulatory pressures have been pushing many tech companies toward third party cookie deprecation while commercial needs have prevented their full extinction. Google, as the largest holdout with their chrome browser, seemed to be putting in the effort to deprecate third party cookies. In January of this year they experimented with alternate privacy forward technologies when they disabled third party cookies for 1% of Google Chrome users. During this time they tested alternative tracking and targeting methods developed with their Privacy Sandbox initiative. A set of tools which regulators noted that may itself contain violations of privacy law. When combined with the poor performance of alternative solutions it is clear that these new technologies were not ready for primetime.

The Business Decision

We should not be totally surprised by Google’s decision. When viewed from a lens of commercialization it makes good sense. Google’s ad and PPC platforms are third party cookie dependent. Google currently controls 91% of all search marketing. Chrome browser usage accounts for somewhere between 64% and 66% of all browser usage worldwide. It’s clear that Google made a business decision to preserve its ad and PPC products which will, more than likely, turn out to be the best one for Google Ad Revenue in the near to mid term. They did not however take a major step toward user data privacy. They took a baby step. Google’s new solution is a User Privacy Prompt that allows users to select how they are tracked across Google’s search products. It’s not the silver bullet that slays the third party cookie but it is the garlic that keeps the trackers away. Users will now have the ability, to some degree, to control how Google digital advertising efforts affect them individually. The question is will they?

That remains to be seen but we can assume there will be some percentage of the global population that initially opts out or uses third party cookie filtering options (like incognito mode). The interesting thing about preference though is that they can be co opted with incentive. I expect Google to claw back a significant percentage of any opt outs with targeted offers. TLDR Google will see a near term decline in digital ad revenue that will be recouped over time through continued market share growth and consent reacquisition activities.

So What Does This Mean For Marketers?

What do we, as marketers, do now that we have spent years, dollars and opportunity cost preparing for the 3PC apocalypse? Were our investments in first party data acquisition and marketing a waste of money and time? What do I tell my leadership team and peers now that third party cookies aren’t going away? Whooaaa let’s hit the brakes. I can see you are starting to spiral……. 🙂 It’s not that serious. Third party cookies have a lot of utility to marketers that we get to keep using! Also keep in mind that third party cookie deprecation was only a small part of why we moved toward a 1st party customer data strategy. (Yes you read that correctly)

1st Party Customer Data = Ability to Enhance Experience = Enhanced Revenue

Yes, third party cookie deprecation was a factor in why we decided to move toward 1st party data acquisition and activation but it wasn’t the only or even the most important reason. The primary motivator was and is customer experience. We all know that positive customer experiences drive increased customer satisfaction, LTV(LifeTime Value), ROAS and bottom line. Personalization, Journey orchestration, UX and service/support are all experience factors vitally important to the digital marketer. It’s first party data (and / or zero party data if you want to be specific), not third party data supplied by third party cookies, that enable these experience factors. What your customers purchase, when and how often they purchased, their support requests, web/app activities and social media posts are what enable you to enhance customer experience, not unreliable, third party cookie derived, inaccurate approximations of what your customers are doing on other company’s websites and apps. If it sounds like I’m anti-3PC i’m not…..

Christmas In July

Marketers in food and drink, publishing, and travel, the largest users of 3pc dependent marketing, all just released a breath they have been holding since 2020. Their reliance on 3PC dependent programmatic advertising meant that they were eventually going to have to face a massive economic shock unless new technologies and solutions were developed. In Q3 2023 over three quarters of programmatic ad buys still relied on 3PC. The market was clearly not ready for the full economic shock of 3PC deprecation.

Google’s cancellation of the 3PC apocalypse has also given new life to many companies facing extinction (due to reliance on third party cookies) while preserving many of the tools marketers depend on to create effective and efficient campaigns. We should be thanking Google for this Christmas in July because we get to keep tools that help us create, analyze and enhance marketing effectiveness and efficiency. Tools like these are now going to be around until Google’s (and the market’s) economic realities change or regulation mandates adaptation:

• Marketing Performance Management and Analytics
• Attribution Modeling
• Retargeting Campaigns
• Segmentation Analysis and ICP Research
• Intent Signals
• Etc…

Demands For Consumer Data Privacy Aren’t Going Away

An Ipsos study from 2022 indicated that 84% of Americans are somewhat concerned with their data privacy. A more recent study by StartPage indicated that 72% of Americans are very concerned and extremely concerned about their online privacy. Regulation has quickly followed consumer sentiment as Europe deployed GDPR, California Deployed CCPA, Canada introduced PIPEDA and South America Introduced POPIA, all requiring positive opt-in consent for third party cookies. This is only the tip of the iceberg. Today there are currently 5 US States with active third party cookie laws (California, Virginia, Colorado, Utah, and Connecticut) and at least 17 other states with pending regulations. Regulatory pressures supporting consumer data privacy is only going to grow as consumer sentiment continues to favor privacy over commerce.

Consumer sentiment and regulatory pressures do not seem to be something Google can just wait out with infinite delays (or cancelations). Although that seemed to be part of their strategy. Eventually Google and the marketplace will be pushed toward 3PC deprecation. Especially when the train is already in motion. Mozilla and Apple positioned themselves to be the secure and private solution in a marketplace that demands security while Google has taken a less customer centric position. While Google delayed, Firefox and Safari browsers latched onto the wave of privacy minded consumer sentiment. Today, after deprecating or severely limiting 3PC, they control between 20% and 21% of internet traffic. I totally understand there are many other factors influencing browser adoption. I bring it up because their decisions to embrace privacy has and will continue to create a privacy perception gap. A gap that, in a consumer driven competitive marketplace, is going to favor the growth of the brand aligned with consumer sentiment. If these consumer and legislative trends continue Google will have to close the privacy perception gap or they will start to lose market share to more customer centric competitors. 3PC have been saved temporarily but it is not going to be around forever.

Conclusion

Hopefully your breathing has now slowed and your nervous system has returned to a parasympathetic state. You now have a set of very good answers for your leaders and peers when they ask you. “How does Google’s third party cookie decision affect us?” You can calmly respond that we are better off now than we were on January 21st because we can continue to use third party cookie enabled tools that make our marketing more efficient and effective. Our investments in first party data acquisition and activation have put us in a position to provide incredible customer experiences while helping us to align with consumer and regulatory data privacy demands that are only growing. You’ll also be able to tell them that the 3PC has been given a lifeline but it more than likely isn’t going to be around forever.

And after all of that you can emphatically say, “No, we didn’t waste our money preparing for the Cookie Apocalypse”