Google Chrome & Third-Party Cookies - What You Need to Know

In August 2019, the engineering teams at Google Chrome announced their intention to phase out all third-party cookies within two years via a program called the “Privacy Sandbox.” This announcement reinforces the trends that we’ve witnessed regarding the shift away from cookies and towards alternative solutions, and was not unexpected.

If you’ve been following recent press releases, browsers such as Safari and Firefox have already outlined plans for cookie restrictions and new privacy regulations. Most recently in March 2020, Safari announced full third-party cookie blocking, shifting to a storage access API to enable cross-site integration instead of relying on cookies. While Safari has paved the way with Intelligent Tracking Prevention (ITP) and other privacy measures, Chrome has historically taken a neutral stance regarding cookies and access measures — but not any longer!

Although Google’s Privacy Sandbox changes won’t go into effect until 2021 at the earliest, now is the time to begin developing a strategy to adapt your marketing and analytics plans to the new privacy environment. The good news is that you’re not alone, and marketers everywhere will need to renew their focus on first-party data.

This is also a tremendous opportunity for predictive analytics, using machine learning techniques based on first-party data, to maintain marketing potency while respecting privacy expectations. We also expect to see marketers and companies innovating new technologies to adapt to changing privacy regulations, and relying more on inference when making marketing budget decisions.

To really find out what’s happening at a high-level, Alex Moore, Sr. Vice President of Analytics & Insight, and I sat down for a conversation to discuss the limitations of third-party cookies, what we expect to see from Google in the future, and how partners like Bounteous can help companies manage this transition. Following our conversation, and as an industry expert on data usage and privacy, I've compiled what came from our discussion:

Why Do Browsers Rely on Cookies?
Cookies are essentially descriptive pieces of information that are passed between your browser and the website’s server. Cookies store information about activity as you navigate from page-to-page, action-to-action. Common use-cases for cookies include multi-session logins (keeping a user logged in even when they close the browser tab) or remembering a user’s preferences.


From The State of Tracking and Data Privacy in 2020 by Andrew Garberson

For example, cookies often keep a user's eCommerce shopping experience consistent by storing login information, saving items in a user’s cart, and persisting these items even throughout multiple sessions. These types of cookies are considered “first-party” and are generated to access same-site information relative to the website domain in your address bar. Most web analytics tools, like Google Analytics and Adobe Analytics, fundamentally rely on first-party cookies in order to track user behavior. 

Distinguishing Between First & Third-party Cookies
However, many times cookies are placed on your website that are managed externally and sent to external servers. In this instance, the domain associated with the cookie does not match your website’s domain. When the domains differ, these cookies are considered cross-site or “third-party” cookies.


From The State of Tracking and Data Privacy in 2020 by Andrew Garberson

It’s extremely common for third-party cookies to be added to a user’s browsing experiences by advertisers and ad networks. These cookies often connect user preferences and behaviors across multiple sites to see how ads are performing. For example, Google Marketing Platform advertising products send cookies to the browser after any ad impression, click, or general tracked activity occurs.

An important distinction between first and third-party cookies is that both the site user and the website owner are no longer in control (or fully aware of) those who can read the data with third-party cookies. This is true even though there are no technical differences in how the cookies are stored within the browser. Google has addressed this issue of access with their release of the Privacy Sandbox roadmap, and has stated that they were prompted to evaluate privacy concerns due to the liberal use of this data.

“Technology that publishers and advertisers use to make advertising even more relevant to people is now being used far beyond its original design intent — to a point where some data practices don’t match up to user expectations for privacy. Recently, some other browsers have attempted to address this problem, but without an agreed-upon set of standards, attempts to improve user privacy are having unintended consequences.” - Google Chromium Blog

Long story short — not all cookies are nefarious. The first-party cookies utilized by analytics tools (such as Google Analytics) and advertising services (such as Google Ads) are managed by each individual website domain and are rarely shared. However, third-party cookies have a greater likelihood to create privacy concerns for browsers and users as the data is sent to potentially unknown entities. This important issue of access is the foundation for most browsers phasing out third-party cookies over the next few months, and replacing cookies with newly re-architectured solutions. 

Let’s Get Specific — Chrome’s Privacy Sandbox Mandate
With the release of plans for the Privacy Sandbox, Google has developed a perspective on a healthy blend of first-party data and reimagined technologies that are intended to be less invasive than third-party cookies. These new technologies will be formulated with the objective of enabling advertisers to gain access to demographic data without compromising the visual identification of unique users. Ideally, Google’s solutions will still allow advertisers to show relevant users your advertisements, but will share as little data about your browsing history and interests as possible. While these new technologies will not completely replace the existing functionality of third-party cookies, Google believes that they will enable relevant advertising insights within Google’s ecosystem.

“We are confident that with continued iteration and feedback, privacy-preserving and open-standard mechanisms like the Privacy Sandbox can sustain a healthy, ad-supported web in a way that will render third-party cookies obsolete. Once these approaches have addressed the needs of users, publishers, and advertisers, and we have developed the tools to mitigate workarounds, we plan to phase out support for third-party cookies in Chrome.” - Google Chromium Blog

It’s important to note that the proposed Chrome update isn’t intended to impact your existing developer-set first-party cookies. Instead, the Privacy Sandbox is Google’s attempt at reigning in the use of third-party cookies by deriving new technology with user privacy in mind, and setting a new standard for advertising which will make third-party cookies obsolete. Essentially, we see this as an effort to re-architecture the web, and replace reliance on cookies in general with other data points.

Bounteous looks forward to unpacking these new, privacy-forward advertising tools as Google begins to release more information. However, in the meantime, there’s plenty that your organization can do today to start preparing for the new landscape.

How Marketers & Digital Product Owners Can Prepare
The most important step in preparing for the future is to stay abreast of any news related to third-party cookies, Google Chrome’s updates, and Safari and Firefox privacy roadmaps. Each move made by these browser giants is likely to impact your business in some way, so keep a documented list of changes that you’ll want to investigate further.

The next step to preparing for the new, third-party obsolete browser landscape is conducting a review of all existing data sources, third-party tools, and remarketing efforts to understand the impact that privacy changes will have. It’s extremely important to understand your marketing data ecosystem and its reliance on cookies and third-party data before making any recommended changes to your marketing activity. It is also very likely that you may need to find these data points within your first-party data or evaluate alternative solutions.

While this may sound daunting, remember that all organizations — including your competitors — will be faced with the same mandate and advertising challenges. Therefore, getting a headstart in your planning for 2021 will help you stay ahead of the curve and rapidly adopt Google’s emerging technologies. Additionally, there are plenty of resources available for you to learn more about Google’s Privacy Sandbox, including your marketing and analytics partners and agencies.

Renewing the Focus on First-party Data with Predictive Analytics
To that end, it’s also important to take an inventory of the data that will still be available to you — especially first-party and internal database information. Moreover, uploading and connecting your available first-party data is often the first step in building robust first-party activation systems.

For example, we may be able to build extremely robust audience segments by connecting our existing digital analytics data with offline database sources. This collective first-party data will be essential for predictive analytics and other data science methodologies, and will help bridge any third-party data gaps that you may have identified during your current-state evaluation.

Why Consider Data Science?
Much of our reliance on third-party cookies stems from their useful nature when creating remarketing audiences, digital advertising campaigns, and other marketing touchpoints. However, while some areas of our marketing initiatives will change significantly in the coming months (such as existing advertising technology being able to scan user’s behavior across sites), much of our marketing analysis opportunities will also remain the same. This is especially true when it comes to using first-party data for data science and analytics.

Moreover, with the reduction of third-party cookies and increased ambiguity, marketers are going to have to rely more on inference. This means that we will have to infer people’s interests and preferences based on the first-party data that is available to us instead of leaning on advertisers for identifying patterns. One way of achieving inference is to begin to isolate and analyze the behavior of lookalike audiences, which leads us to predictive analytics.

What Opportunities Exist in Predictive Analytics?
Predictive analytics is the strategic use of data combined with statistics, modeling, machine learning, and algorithms to forecast possible outcomes. Predictive learning opportunities such as lead scoring, lifetime value analysis, customer journey modeling, and many, many others can be utilized to fill the gap between what we know today, and what we expect customers to do in the future.

The use of predictive analytics can help your business determine where to spend your marketing dollars and who to target based on prior activity. As the privacy landscape continues to shift, concepts like predictive analytics should be placed high on your radar.

How Can I Get Started?
To get started, you’ll want to refer back to the exercise of developing an inventory of first-party data sources available to you. We recommend selecting one or two data sources that are readily available and applicable to your goals. This helps keep your initial analysis relatively focused so that you can learn from your results and iterate as needed.

From here, you can begin to dive into important features for user behavior and conversion. For example, you may be able to use the data collected by Google Analytics, Adobe Analytics, Snowplow, or any digital data collection platform to group like activity into segments. Once these populations are created, you can evaluate their current placement in the customer journey, and extrapolate future behavior based on known information about similar users today.
Tell Me More!

There are so many directions and paths to go with predictive analytics. With the reduction of third-party data, our data scientists at Bounteous have become increasingly interested in the ability to activate first-party data in its place, and they are continuously adapting models to the data set and marketing needs at hand.

To put it simply, we believe there’s a data science model available to help marketers answer their most challenging questions, especially in our new privacy landscape. If you have questions about data collection, choosing a model, and reacting to the findings, we would be happy to sit down with you and discuss how to begin making proactive changes to counteract the impact.

Final Thoughts & The Future Outlook
Privacy efforts are expanding and evolving for all browsers, so it comes of no great surprise that Google Chrome has thrown its hat into the mix. The silver lining with each news release is that all websites and users are in the same position, and are experiencing the same challenges. Let’s not also forget that the move toward greater privacy controls is generally great for consumers and for our own peace of mind while browsing on the web.

"Bounteous understands that each company has a unique blend of first and third-party data that builds a foundation for marketing, advertising, and user experience design. It’s essential for all companies to undertake a third-party cookie and data privacy readiness review. If your organization is interested in conducting a deep-dive review of your current implementation and practices, our team at Bounteous is ready to help!" - Alex Moore, Sr. Vice President of Analytics & Insight

Remember, you’re not alone. Have lingering questions? Our media and marketing teams are also working on this full time. Reach out if you'd like to speak with them about the future of advertising with first-party data. Confused on how to bridge the gap when third-party cookies are wiped out? Consider the opportunities that exist for relying on inference, predictive analytics, and machine learning. Moreover, continuously evaluate technologies that may help you adapt to changing privacy regulations. How you prepare now for the future digital ecosystem will set you apart from the pack — there’s no time like the present!

Reference: https://www.bounteous.com/insights/2020/04/09/google-chrome-third-party-cookies/