If you want to be first and not last, now is the time to prepare for a world without third-party cookies.
Ricky Bobby’s quote in Talladega Nights, “If you ain’t first, you’re last…” sums up why I am welcoming Google’s recent announcement that its Chrome browser will no longer support third-party cookies in 2022. Because Safari and Firefox already block third-party cookies, this means that in two years attribution and targeting will need to operate without the use of third-party cookies. As a result, your digital targeting and attribution will need to utilize first-party cookies or cookieless identifiers.
Before I explain how you can prepare for a world without third-party cookies, let’s first take a step back and do some cookie 101 education.
My good friend and analytics pioneer, Maciej Zawadziński, from Clearcode, provided a great and easy-to-understand explanation and graphic, in a post from 2018, on the difference between first and third-party cookies.
First-party cookies are stored by the domain (website) you are visiting directly. They allow website owners to collect analytics data, remember language settings and perform other useful functions that help provide a good user experience.
First-party cookies are created directly by the website whenever a user visits the site.
Third-party cookies are created by domains other than the one you are visiting directly, hence the name “third-party”. They are used for cross-site tracking, retargeting and ad-serving. Third-party cookies are placed not by the website, but by third-parties, e.g. advertisers.
First-Party Cookie vs. Third-Party Cookie
So what does this mean for you? And how should you be preparing for a world without third-party cookies?
Third-party “In-Market” Audiences
If part of your marketing strategy includes in-market audiences that utilize third-party cookies for targeting (hint: many of you do), you will need to find an alternative means to target in-market auto shoppers. In the end, you probably won’t be missing those third-party generated audiences. A recent research study, which examined more than 90 popular third-party audiences, concluded that the quality of those data segments was frequently poor and not worth the additional costs.
Most third-party data sources are ineffective because they use modeled data that tries to guess if someone is in-market based upon random or non-corollary attributes of a consumer profile.
Instead, dealers should seek out first-party data sources that can demonstrate real car shopping intent. Based upon our data, some of the best first-party data sources are behavioral signals, like when consumers are shopping online for a car (your site or listing site).
Most retargeting solutions are done via a third-party cookie. As a result, retargeting as you know it today, will be dead in 2022. As a reminder, many retargeting solutions have already been hindered significantly when Safari started blocking third-party cookies in 2017. If you are like most auto dealers, a good chunk of your website traffic is from mobile users using a Safari browser, which is the default browser for iPhone users.
Any Google-owned property, namely Google Search and YouTube, will be impacted moderately. Why? If you are using Google Analytics to create your remarketing audiences, these audiences utilize a first-party cookie to create remarketing audiences. Consequently, once that user leaves a Google property, you will not be able to retarget those users. More specifically, if you utilize Google Ads for retargeting you will no longer see your ads on publisher sites, like ESPN.com, for example. To address these future limitations for retargeting, targeting and measurement in general, Google is pitching its Privacy Sandbox initiative as the solution. However, as a recent article by Digiday pointed out, “it is still in its infancy so while Google has proposed many features, no actual platform or code exists for marketers to properly assess [Google’s Privacy Sandbox].”
Because Facebook sets a first-party cookie, they too can serve retargeted ads to you on Facebook.com and Instagram.com and their respective apps. However, like Google, once you leave the Facebook property, you won’t be able to serve retargeting ads with Facebook on the open web.
As a rule of thumb, once you are outside the ecosystem of a publisher, you will not be able to retarget consumers. Where does this leave some of the bigger retargeters who are not publishers? In brief, they’ll be in a tough spot. The big retargeters will have several options without third-party cookies. Some options include: partnering with publishers for first-party cookie-based retargeting; resolving website visitor identities to cookieless identifiers; utilizing new innovations from companies like LiveRamp, where you can target consumers with LiveRamp’s IdentityLink in the bidstream (versus the cookie); or worst case, using probabilistic proxies to retarget users, namely through IP addresses.
Naturally, there are some exceptions to the above retargeting scenarios. The best course of action for every dealer is to embrace this new reality. Skate to where the puck is going by investing or expanding your first-party retargeting capabilities with newer solutions coming to market.
The majority of analytics solutions, namely Google Analytics, utilize a first-party cookie. However, that’s where the good news ends for dealers because the majority of analytics solutions only measure website activity and leads. They can’t connect an offline sale to the online traffic that drove the consumer to your website. So, in reality, nothing really changes with analytics in regards to third-party cookie deprecation.
Multi-Touch Sales Attribution
There are MANY flavors of attribution. For the sake of clarity, I will be speaking to Multi-Touch Sales Attribution, which I define as connecting your digital marketing to the specific VIN that an identified consumer purchased.
As it relates to Clarivoy and our multi-touch sales attribution, we utilize first-party cookies at the core of our attribution solution and identity graph. Other solutions in automotive utilize solutions that are nearly 100% reliant on third-party cookie solutions to match offline sales to anonymous shoppers.
Any attribution solution that is over-reliant on third-party cookies to perform attribution will most certainly be significantly impacted when third-party cookies are no longer supported. Even today, with Safari and Firefox already blocking third-party cookies, third-party cookie-based attribution solutions simply can’t attribute sales to these users. Thankfully, we’ve been making significant investments that enable us to connect offline sales to online users, aka our identity graph, that are not reliant on third-party cookie solutions. In fact, less than 12% of our attributed sales come from our partnerships with third-party-cookie identity companies.
When we first entered the attribution market in 2012, we were a young, scrappy start-up that couldn’t afford the solutions offered by third-party-cookie identity companies so we had to build our identity graph, via first-party cookies, to link offline sales to online shoppers. These investments have paid off in spades for us because we are very well positioned for a world without third-party cookies.
LiveRamp, who is one of the largest companies that enables online to offline linkages through a third-party cookie, has been preparing for a day without third-party cookies by making some savvy moves and significant investments over the last couple of years. Travis Clinger, Vice President Global Strategy and Partnerships at LiveRamp, did a great post the day after the Google announcement, which speaks to those investments. That said, your attribution must be more diverse than just using a solution like LiveRamp. I’ve long held the belief that LiveRamp is a great start but not a silver bullet for attribution.
If you want to be first and not last, now is the time to prepare for a world without third-party cookies and third-party-cookie-based audiences. Now is the time to be first and invest in a first-party data strategy for attribution, ad targeting, and identity management.