The Marketing Wars: The Rise of Post-Cookie Advertising in a New World

Recall the significant industry shift when major platforms announced plans to phase out cookies, marking a pivotal moment for digital marketing. Several years have passed since these changes began reshaping the landscape, prompting us to look back and evaluate how the ongoing rejection of cookies has influenced the industry. This retrospective explores the adjustments and innovations that have defined marketing strategies in a world moving beyond traditional cookie usage.

The industry is well into its journey toward a cookieless future, a transformative shift that continues to demand marketers adapt to innovative strategies that forego reliance on third-party cookies. This evolution is redefining advertising in a cookieless world, emphasizing the critical role of first-party data and contextual targeting. As we navigate through these changes, it’s crucial to explore both the challenges and opportunities they present for PPC campaigns. Join us as we delve into the latest innovations and learn how marketers are adapting to this new reality.

NOTE: This post was originally published in December 2020 and was completely updated in June 2024 for accuracy and comprehensiveness.

Third-party data provided promise to digital advertising in the sense that these data provided insight into web users’ web behavior beyond what can be determined by data collected from first-party sources. Using this information, you can easily create strong visitor profiles and build a retargeting list to send ads to visitors and other web users.

Its original use cases were targeting retargeted users, quickly followed by frequency caps. Digital marketing did not offer much scale and efficiency until the exchange and real-time bid (RTB).

Cookies are small text files placed on a user's device by websites they visit, which is crucial for digital marketing. They enable functionalities like session management, user personalization, and behavioral tracking. In marketing, cookies help target ads, analyze site traffic, and optimize user experiences.

However, increasing privacy concerns have led to stricter regulations and a shift towards more privacy-focused alternatives. Understanding and adapting to these changes is essential for marketers to effectively engage audiences in a respectful and compliant manner.

In today’s digital landscape, businesses collect and utilize different types of data to enhance operations, personalize experiences, and drive decisions. Here’s an overview of the key data types:

1. Observed Data: Information collected directly through observations of user behavior, such as browsing habits or purchase history. It is valuable for gaining insights into consumer actions and preferences.
2. First-Party Data: Data collected directly by an organization from its customers through interactions with its products or services. This data is highly reliable and specific to the collector’s audience, offering deep insights into customer behavior.
3. Second-Party Data: Information that one organization directly obtains from another. This data exchange typically occurs between partners or entities with a mutual agreement, ensuring relevance and enhancing the breadth of data available.
4. Third-Party Data: Data collected by entities with no direct connection to the user or the service provided. It is typically aggregated from various sources and used for broader marketing campaigns and trend analysis. Marketers have traditionally used third-party data to sculpt and categorize audiences, highlighting the reliance on third-party data audiences for advertising and customer acquisition.
5. Walled Gardens: Platforms where the access to user data is strictly controlled by the platform owner, limiting external use of this information. Common examples include large tech companies like Google and Facebook, which restrict how data on their platforms is shared with outsiders.

2020 will be remembered not only by quarantine, but also by the massive transition of the business to online. At the beginning of this year, Google announced its planned departure from working with third-party cookies, signaling a significant shift in the digital advertising ecosystem and marketing strategies. For newcomers to the industry, let’s clarify that third-party cookies are the crumbs of bread by which marketers know two things:

1. Where to find Hansel and Gretel in the dark forest of the Internet.
2. What Hansel and Gretel want to buy are GPS trackers and offline map mobile applications.

In other words, these are small marketing assistants who help track user behavior and preferences on any platform (desktop, mobile applications). No company doesn’t use third-party cookies in marketing and sales. However, by 2022, it was expected that the world would abandon its use, largely due to increasing concerns over user privacy and the need for the digital marketing landscape to adapt by harnessing first-party data and exploring alternative advertising solutions in preparation for a cookieless future.

Why did this happen? Because data collection usually occurs without notifying users, which in turn is a direct violation of consumer rights and raises significant user data privacy concerns. The Amazon example is very indicative in this case: on December 7, 2020, the company received a lawsuit for 35 million euros for violating the rules for using third-party cookies.

Of course, Google is not the only large company that has changed its use of third-party cookies. Still, it’s its decision that will ultimately change the entire digital economy. Google isn’t for nothing the largest player in the marketing market, and its web browser, Chrome, remains the most popular browser in the world. Not surprisingly, after Google announced its decision, the entire industry fell into a panic. The well-developed technologies for collecting information about users, on which marketers built a whole ecosystem of digital advertising, suddenly became useless.

However, over the past months, marketers around the world have already passed all five stages of taking the inevitable. For now, they’re at the last phase:

1. Taking steps to rebuild their approaches to work
2. Exploring new opportunities (Google Analytics 4)
3. Recalling the well-known variants (contextual advertising, etc.)

The consequences can be divided into 3 levels for business, from minor changes to major ones.

Low impact:If you evaluate the effectiveness of advertising campaigns directly in an advertising service (for example, you only use Facebook Ads and don’t use other advertising services), then the impact of the changes will be low, and you’ll be able to continue working as before.

Average impact:If you work with covered campaigns in walled gardens (the largest being Google and Facebook), then the impact will be average because the covered campaigns will be aimed at metrics collected around campaigns and not users and will be available in the advertising account at the segment level.

High impact:If you evaluate advertising campaigns with advanced analytics that combine user activities at different touchpoints, then the impact will be high. In case you use audience segments and cross-device reports, combining user actions before sending them to advertising services, then the impact will be even higher.

To enable companies to navigate the post-cookie landscape effectively, brands and media agencies must revise their advertising strategies, emphasizing the need for more control over these behavioral targeting strategies through leveraging first-party data and adopting first-party identity strategies. This approach ensures future-proofing against the evolving digital ads' environment.

Orange Valley has prepared a dashboard that helps determine what share of your revenue is at risk. To do this, compare the share of new users in Safari and other browsers. The image below shows that Safari has a 10 percentage point advantage in terms of new users, but we already understand that they aren't all new: many have simply received a new cookie ID.

The absence of third-party cookies will significantly impact pay-per-click (PPC) campaigns in several ways:

• Reduced Targeting Precision: Without third-party cookies, advertisers will have less access to detailed user behavior across multiple sites, leading to challenges in delivering highly targeted ads.
• Increased Reliance on First-Party Data: Marketers will need to collect first-party data to gather insights directly from their audiences, such as through website interactions, subscriptions, and customer feedback.
• Dependence on PPC Advertising: As personalized targeting options dwindle, we can expect a resurgence in contextual advertising, where ads are placed based on website content rather than user behavior.
• Enhanced Privacy for Users: The elimination of third-party cookies aligns with growing privacy concerns, potentially increasing user trust but requiring advertisers to adapt to new norms and regulations.
• Adoption of Alternative Technologies: Businesses will explore other technologies like Universal IDs, first-party cookies, and device fingerprinting to try and compensate for the loss of tracking capabilities.
• Potential Decrease in Ad Relevance: Ads may become less relevant to users, which could lead to lower engagement rates, affecting the overall effectiveness of PPC campaigns.
• Cost Implications: The shift might lead to increased costs for ad campaigns as advertisers strive to find and implement new, effective targeting techniques that comply with privacy standards.

Overall, the phasing out of third-party cookies demands significant adjustments in digital marketing approaches, especially for PPC campaigns, focusing more on privacy-friendly practices and innovative data collection methods.

The most important thing is to collect first-party, second-party, and zero-party data:

1. First-party data is data that users provide directly to your company in your application or on your website. Leveraging this customer data for personalized marketing efforts is crucial in today's advertising landscape.
2. Second-party data is collected by an advertising service and includes data from advertising accounts.
3. Zero-party data is information that customers willingly share, such as preferences or survey responses, which can enrich customer data repositories for better audience segmentation.

To collect first-party, second-party, and zero-party data, you must first implement a Customer Data Platform (CDP). Customer Data Platforms are essential for managing and integrating various types of customer data across your business. The data in this data lake must be owned and controlled by you, not by the advertising service. As long as user data is stored in different systems — especially those that don’t belong to you, such as an advertising account or CRM — you can’t analyze any advertising campaign effectively.

💡Read more about why Google BigQuery as a data lake is the best choice for your digital marketing strategy.

You can collect raw user activity data from your website and mobile application. Import the most granular data you can get from advertising services into your data lake. Many marketers use only UTM tags to track transitions from advertising accounts. But UTM tags aren’t enough without a connection to a specific user.

Motivate users to log in to your website and application. Logging in is an underestimated activity that allows you to collect data on a user without IDFA or cookies, use your own identifier, and track the user across platforms. Additionally, consider utilizing contextual targeting as an alternative advertising strategy that doesn't rely on cookies but instead focuses on the relevance of targeted ads based on the content and context of a page, creating personalized experiences at a lower cost.

1. If you're looking for a convenient connector for transferring data to Google BigQuery, we recommend OWOX BI Pipeline. It combines data from Google Analytics, advertising services, websites, offline stores, call tracking systems, and CRM systems into Google BigQuery.

2. If you want to build reports based on Google BigQuery data in your favorite Google Sheets or you want to transfer data from Google Sheets to Google BigQuery, we recommend using the free and convenient OWOX BI BigQuery Reports Extension.

The BigQuery Reports Extension is popular for many reasons:

1. It's free, safe, and secure
2. It doesn't require you to upload data as CSV files or use paid third-party services.
3. It uses only Google's official APIs

You can find more details about this OWOX BI Extension here.

In the new realities, we must, firstly, remember about the end-user and respect the user’s privacy. It’s worth noting here that third-party cookies weren’t designed, considering these moments. This is where data management platforms (DMPs) become crucial, as they enable marketers to track user behavior and demographics across different platforms without relying on third-party cookies, thus respecting user privacy while creating detailed user profiles for targeting specific audience segments.

Secondly, you should also not forget that mobile devices occupy more and more positions. Here, device IDs, SDK data, and the use of DMPs come to the help of a marketer in obtaining the necessary information to gain insights about the user and effectively track users in a cookieless environment. By the way, according to a 2020 report by GlobalWebIndex, consumers are increasingly using smartphones to find, buy, and pay for products and services, highlighting the need for alternative technologies to track users across devices and apps.

To monitor the effectiveness of advertising campaigns, Google offers the Ads Data Hub, which consolidates all advertising campaign information available to Google and makes it available for analysis by the advertiser. However, Ads Data Hub doesn’t allow for downloading reports at the user level.

Apple’s SKAdNetwork tool also allows you to assess the effectiveness of advertising campaigns — but not at the user level. If an advertising service is connected to this platform, you can send conversions and signals from a mobile application, from which you can assess the value of a campaign and the interactions between the advertising campaign and users. There are many more restrictions — for example, only up to 100 advertising campaigns per account — and breaking down these campaigns to track a particular user isn’t possible.

For example, if you use the OWOX BI service to collect data from a mobile application (AppsFlyer) and your website (Google Analytics), that’s how your data movement can look.

You can use Ads Data Hub as a tool for combining data on advertising campaigns, collecting data from other advertising services, and adding data from your CRM to build reports and attribution models from audience data.

Preparing for cookie-free targeting solutions requires strategic adjustments across your digital marketing and data management practices. Here are key points to consider for cookie-free targeting solutions:

1. Enhance First-Party Data Collection: Build stronger direct relationships with your audience by encouraging them to interact with your platforms, such as signing up for newsletters, creating accounts, or participating in loyalty programs. This helps you gather valuable data directly from your users, reducing reliance on third-party sources.
2. Invest in CRM Solutions: Implement or upgrade Customer Relationship Management (CRM) systems to better store, manage, and analyze customer information. This infrastructure will help you leverage detailed customer profiles to personalize marketing efforts and improve customer service.
3. Adopt Privacy-Friendly Advertising Technologies: Shift towards advertising methods that respect user privacy, such as contextual advertising, which bases ad placements on the context of a web page rather than user behavior. This approach aligns with privacy laws and is less reliant on personal data.
4. Form Second-Party Data Alliances: Establish transparent partnerships with trusted organizations to share data that is not competitive but complementary. This can expand your data pool with more relevant insights while ensuring all parties adhere to privacy standards.
5. Implement Consent Management: Utilize Consent Management Platforms (CMPs) to effectively manage user preferences and consent regarding data collection. This approach not only aligns with privacy regulations but also fosters trust with your audience by empowering them with control over their data.
6. Explore Alternative Tracking Technologies: Investigate new technologies that can serve as alternatives to third-party cookies, such as Unified IDs, which use anonymized user IDs to track behavior across sites in a privacy-compliant manner, or first-party cookies that track user interactions directly on your site.
7. Educate Your Customers: Be transparent about how you collect, use, and protect user data. Providing clear and accessible information can help users feel more comfortable sharing their data, enhancing trust and potentially increasing their willingness to engage.
8. Leverage Context-Based and Behavioral Signals Within Your Own Domains: Improve your site’s analytics capabilities to better understand how users interact with your content. This data can be used to optimize the user experience and increase conversion rates without infringing on privacy.
9. Stay informed about trends in your industry.: Keep abreast of legislative changes, technological advancements, and shifts in consumer behavior regarding privacy. Regularly update your practices to stay compliant and competitive in a rapidly evolving digital landscape.

By adopting these strategies, businesses can better prepare for the challenges posed by the decline of third-party cookies, ensuring sustainable and effective digital marketing and data management practices.

Given the changes in the market and taking into account future forecasts, our experts suggest that marketers will have to face the increase in the following metrics and parameters:

1. The share of new users.
2. The share of direct traffic.
3. The role of associated conversions in the evaluation of campaigns.

At the same time, there will be a decrease in such parameters as:

1. The length of the conversion chain.
2. Cohort reports will be significantly limited.
3. The quality of attribution.

In addition, there is a high probability that:

1. The cost of attracting clients will increase. This will happen foremost because advertising services will have less information with which to target ads. And the less opportunity an advertising service has to determine that an offer or creative is in the user’s interest, the less relevant it will be: CTR will decrease, and CPA will increase.
2. Small players will leave the market. Large advertising services can afford associated conversions as an argument for how their campaigns drive advertisers’ sales, but the small players can’t afford this method.

A fragmented user path to conversion and new initiatives to protect sensitive information require entirely new approaches to obtain the data marketers need. Only one thing can be clearly stated — first-party data should prevail in your data analysis. Developing new marketing strategies to adapt to a future without third-party cookies is essential, focusing on leveraging search intelligence, exploring personalization alternatives, and forming second-party data partnerships.

To get more first-party data directly from users, you should think about how to convince your customers to share this information with you. For example, you can use loyalty programs to offer personalized discounts. With this approach, your customers will see value in sharing personal information with you.

And, of course, think about how you will store and process the extracted data. After all, if the data doesn’t work for you, why are you spending money to collect it? If you don’t know where to start, sign up for a demo with our specialists. Our team will help you prepare for the transition to a new post-cookie online advertising world.