You may have seen some noise online about the phasing out of third-party cookies and the introduction of Google’s Privacy Sandbox. This post is to explain what this means in varying aspects of digital marketing.
There’s lots of emotive & negative language to describe this change. Some may call it a “cookie-pocalypse”, be very wary of these people, this is not a disastrous situation.
3rd party cookies are being phased out amid pressure from end users and governments for technology giants to treat people’s data with respect. 1st party cookies are staying, which is what most tools utilise.
What is the difference between a 1st party and a 3rd party cookie?
A cookie is a piece of data stored in your web browser that can be read by online interfaces
1st party – a cookie that is set on the visited websites domain. For example your user ID being set by the website you have logged into.
3rd Party – a cookie that is set from another website (i.e.. 3rd party) for the purposes of data collection.
3rd party cookies have a bad reputation because often they can collect far more data than the end user may even realise, and this data can be used to advertise to you, even sold to other advertising companies.
This has been to allow highly targeted advertisements powered by this data collection, and this has generally led to a breaking down of trust between websites and users.
What does the Privacy Sandbox actually do?
Google’s solution to the deprecation of 3rd party cookies is the Privacy Sandbox.
The Privacy Sandbox is a group of APIs that do the data collection in place of a third-party cookie. This effectively means the data is withheld from being sent to the advertiser’s platform straight away. This data is sent at a later time, with added ‘noise’ to make it impossible to identify an individual.
This way, there is no direct connection between advertisers and the end user. Google Chrome will sit in the middle and use these APIs to send what it needs in an aggregated fashion.
Advertisers get aggregated reports to inform things like first click source, campaign, how many people converted and what the revenue was. The purpose is that advertisers get the data they want without compromising on privacy for the end user.
What does this mean for marketers?
It depends which area:
On-Site Analytics & Optimisation: Tools such as Google Analytics 4 (GA4) are not affected at all by this change, because they use 1st party cookies to operate. The cookies set come from within the domain, no other website is using them for any other purpose.
Off-Site Digital Advertising & Retargeting: There will be impacts if you buy media that is placed on other websites or use advertising that uses targeting lists generated by third party cookies. Targeting of these types of ads will become more coarse because users are grouped into cohorts or interest groups, rather than targeted individually.
It has been an industry best practice for a while to use 1st party generated data, such as a CRM in place of 3rd party generated targeting lists. So the impacts of the 3P cookie deprecation may be less severe if you have already implemented a first party data collection strategy.
What is the biggest concern of the Privacy Sandbox?
Big concern is whether Google will gain an unfair advantage in digital advertising because they will effectively gatekeep the data and only allow a subset to be shared with other advertisers. This is because they own the Chrome web browser, as well as owning the largest advertising networks on the internet.
Let’s not dress it up – Google are not your friends. They are a profit-making company that like advertising revenue. The concern has partially been addressed in the Digital Markets Act (DMA), where one of the key stipulations is to “not treat services and products offered by the gatekeeper itself more favourably in ranking than similar services or products offered by third parties on the gatekeeper’s platform”. Also, the UK competition and markets authority (CMA) has also been investigating the Google Proposals, which has not been finalised.
What are the benefits of the Privacy Sandbox?
It could lead to a standardised practice across the internet (All browsers included) for collecting and reporting on advertising data. Google have confirmed they are working across the industry with this initiative.
Currently, because 3rd party cookies are treated differently across the different browsers, it is very hard to keep up with the different cookie limitations across different browsers. By having a standard process, reporting and attribution of spend and conversions could end up being simpler.
Also, It’s more ethical. No longer will “doing the right thing” be seen as a disadvantage in digital advertising. Everyone will be playing on the same field. Users don’t like being tracked, and it was always problematic in the first place. An ethical organisation would welcome these changes.
Conclusion
Don’t get drawn into the general fear-mongering about an analytics doomsday. The internet is not going to break when 3rd party cookies go for good (right now, 1% of global chrome users have already has their 3rd party cookies disabled in a phased test). There will be no such thing as a “cookieless” internet.
1st party cookies will still exist, and most things will continue as they always have done. Digital advertising practices will be impacted, but this will be a slow transition.
There will be more news coming out on the developments in this area, but as it stands, the impacts and implications of this move are unknown than known.
Useful resources:
Article on all the APIs used to make privacy sandbox used
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Throughout my career, I’ve concentrated on enhancing data quality and enabling teams to leverage data effectively, from implementation to execution.
I’ve gained extensive experience in Digital Analytics, working on both client and agency side. My expertise lies in Google tech, including a full spectrum of data tools and techniques – from JavaScript coding to SQL and everything in between
