Google is phasing out third-party cookies in 2024. Does it mean the end of targeted advertising? Some studies showed that publishers could lose up to 52 percent of funding without third-party cookies. So in this article, learn how essential cookies are and what will replace their function in the future so that marketers and advertisers can continue to run efficient pay per click (PPC) campaigns.
But first, what is a third-party cookie?
Third-Party Cookies Explained
A hypertext transfer protocol (HTTP) cookie is a small block of data that a web server creates and places on a user’s computer or device while browsing a website. Under certain conditions, a user’s web browser may also place a cookie in another device. On the other hand, a third-party cookie, refers to a cookie set by a website other than the one a user is on.
One example of a third-party cookie is a Facebook Like button on a website. Users who visit the website will have a cookie created and stored by Facebook on the user’s computer/device. Facebook can access the cookie later to identify visitors and track which websites they visited.
Another example is when the Google Ads service creates cookies to track user activities. So visitors of a website that displays Google Ads are, in effect, storing third-party cookies, which means even if they visit other websites, Google can display ads related to the users’ search history.
Why Do Cookies Matter to Digital Advertising and Managing PPC Campaigns?
More often than not, web entities that create cookies use them for digital advertising and marketing purposes, which is why they are also referred to as targeting or advertising cookies. Usually, third-party cookies are “persistent,” meaning they follow users to other websites, collecting information that can be used to display relevant topics, information or advertising.
Persistent cookies are one reason a user visiting a website with an advertising cookie may not display ads, but relevant ads may appear on other websites.
At any rate, it is a common practice in the advertising industry to share data gathered by cookies. Typically, an online advertising agency and Google Ads specialist use the data to build user profiles and measure the performance of their advertisements across different websites.
One thing a Google advertising agency or PPC ads agency promises clients is to deliver results. So they need to develop solid advertising campaigns and measure their performance, allowing them to target the preferred customer segments for the highest return on investments (ROIs) efficiently. But they can only do that if analytics is available, which is data that cookies collect from users.
For any PPC management team and Google Ads specialist, talk of not using third-party advertising cookies is a source of headache. So when Google announced it was discontinuing Chrome’s support for third-party cookies, there was fear Google Ads targeting might become too challenging. It would be difficult for a PPC ads agency to monitor PPC performance and optimize PPC campaigns.
The loss of third-party cookies for advertisers using them means they will lose the ability to learn and understand user behaviors. As a result, they would not be able to display relevant ads consistently, resulting in lower click-through rates.
Fortunately, Google decided to delay deprecating third-party cookies to 2023, with plans to phase them out in 2024. So, for the time being, a Google Ads agency can have more time to prepare and innovate to continue providing high-quality PPC management and digital advertising services.
Why Is Google Phasing Out Cookies?
Google takes user data privacy seriously. However, the data practices of advertisers no longer align with users’ expectations of online privacy and security. Therefore, they decided to phase out third-party cookies and replace them with another initiative.
For years, data brokers, publishers and advertisers relied on cookies to track users’ online activities. But this practice, as many believe, violates user data privacy. Although slim, there is also a possibility that hackers may hijack cookies, enabling them to access browsing sessions.
So one option users can take is to disable cookies on their browsers. Others use an ad blocker to reduce or stop ads from showing up. But this led to the rise of another advertising attribution method called fingerprinting.
In analytics, fingerprinting is a technique used to identify unique visitors, allowing advertisers to track users across the internet and build user profiles for targeted advertising. Unlike cookies, though, users cannot clear their fingerprints. Hence, they have no control over their online privacy and security.
The Solution: Google Privacy Sandbox Initiative
Advertising is Google’s most significant revenue stream. So when they decided to phase out third-party cookies, there were plans to replace them with the Google Privacy Sandbox.
The Privacy Sandbox is Google’s initiative to create new web standards protecting users’ privacy while also providing search engine optimization (SEO) specialists, developers, advertisers or a Google Ads agency the tools they need to build their digital advertising businesses.
Build New Technologies To Protect User Data Privacy
The main focus of Google Privacy Sandbox is to allow advertisers and others access to metrics necessary for managing PPC campaigns. One of the first initiatives was an experimental tracking feature, Federated Learning of Cohorts (FLoC), which enables interest-based advertising by creating user profiles or “cohorts” without revealing user identities.
Recently, Topics, an initiative to preserve privacy while allowing publishers to show relevant ads, replaced FLoC. Essentially, it works by having the browser help in serving relevant ads based on interest-based categories inferred from the recent browsing history.
For users, it means they can enjoy surfing the web or using apps without worrying about their personal information being collected by unknown publishers. Also, in terms of security, the Google Privacy Sandbox makes it more difficult for malicious entities to steal user information.
Keep Online Content Free
A website costs money to put up and maintain, and the bigger the site is, the more expensive it is to run. Creating and publishing content, likewise, costs money. But many of these are free for consumption, and the main reason for that is advertising.
Digital advertising, though, works efficiently today because of tracking features, including the use of third-party cookies. But they are intrusive and raise concerns over user data privacy and online security. So in this regard, the Google Privacy Sandbox eliminates those concerns by serving as a privacy-preserving alternative.
In the future, when third-party cookies are eliminated, users can continue browsing and consuming content or using apps for free.
Collaborate on Building New Internet Privacy Standards
When Google decided to phase out third-party cookies, it joined Apple Safari, Microsoft Edge, Mozilla Firefox and other privacy-first browsers that implemented measures to prevent, reduce, or control user tracking.
So in the future, being able to collaborate with others – developers, publishers, data brokers, marketers and advertisers – can bring forth new standards and technologies that better protect online privacy and security while also allowing a Google advertising agency access to information they need to optimize PPC campaigns and PPC performance.
Phasing Out Third-Party Cookies Will Not Harm Online Advertising Agency
Google Ads targeting and tracking PPC performance is indispensable. Anything that can disrupt this process will cost the industry billions of dollars. So Google has paved the way for the new Privacy Sandbox initiative to replace tracking and fingerprinting techniques to ensure maximum efficiency in managing PPC campaigns.
Already, Google Privacy Sandbox trials and experiments are underway. While Google may have delayed phasing out third-party cookies, the response and results thus far have been positive.
For more questions on how PPC management and Google Ads targeting can affect your business, contact us at 866-908-4748. Our specialist can discuss how we optimize PPC campaigns to generate qualified leads for your business today and how we prepare for the new standards and advertising technologies to ensure there will be no disruption in the future.