How Will Google Moving Away from Third-Party Cookie Tracking Impact Digital Marketing? | (un)Common Logic

As a digital marketing agency, the best way we can deliver excellence for our clients is by being aware of changes that affect the ability to increase customer acquisition via digital channels. As a Google Premier Partner, we have dedicated resources that help to keep us apprised of what Google is doing and how it might affect our clients.

Last month, Google made an announcement stating that beginning next year, they will no longer use or support the industry standard practice of leveraging third-party cookie tracking. Third-party cookies are used to help companies target ads based on users’ behavior online. Google is doing this to increase privacy and address concerns from lawmakers and users.

Our team has put together initial guidance regarding this significant change. While much is still unknown, here’s what we’re recommending at this point:

• Build first-party data as much as possible for targeting
• Prepare to use more contextual targeting again
• Understand how and where your buyers are moving through various channels in your funnel, as visibility into multi-touch attributions and cross-device conversions will likely decrease
• Evaluate, monitor, and modify your display and shopping campaigns as needed

Read on to learn more about how we’re planning with our clients to address Google’s phasing out of third-party cookies for advertising purposes.

Wait. Catch Me Up – What’s with Google and Third-Party Cookies?

Privacy advocates have been concerned about third-party cookies and the collection of individuals’ data for years. In January 2020, Google announced they were pursuing a long-term plan to phase out the use of third-party cookies which are used to track browsing behavior for advertising (see announcement here). At the time of the announcement, Google said they might explore alternatives, but with their announcement last month (here), they have confirmed that no such alternatives will be available as they cannot be sustained long term. Our team is having ongoing discussions regarding the impact this industry direction will have on our clients and their businesses.

How Will This Decision Impact Targeting on Display Networks?

So, how will agencies and companies know when and where to place prospecting ads that today we can target based on user browsing history?

Targeting will need to shift more heavily into first-party data. Programmatic vendors have been over-saturating the market and over-serving ads at a high frequency. The move to rely on first-party data will mean fewer vendors will benefit.

When it comes to first-party data, large data collectors can sell “buckets” of types of users based on what the users allow them to do. Then advertisers will be able to use customer match lists and similar audiences to target websites.

Additionally, advertisers will now have to return to placing ads on relevant websites and pages (i.e., contextual targeting) vs. following users around the web wherever they go.

This decision does not impact retargeting (visits to the advertiser’s own site).

How Will This Decision Impact Google Shopping?

The impact on Google Shopping will be minimal as searchers will go from a Google product directly to the website still using the feed. There will an impact on cross-device conversion tracking.

Two things that are impacting Shopping now and going forward:

1. Google would like to become a more competitive alternative to Amazon by letting users purchase products from advertisers directly on their platform without the need to visit the website
2. Google’s release of Smart Shopping gives Google the autonomy of advertising in search, display, and video with less visibility capabilities for advertisers. Advertisers who use Smart Shopping combined with diminished third-party cookies will likely see a decrease in conversions and performance

How Else Will This Impact Digital Marketing?

Up to now, due to the proliferation of tracking options, it was extremely easy to have accurate tracking on what marketing channels are contributing to a sale.

With this change, Google will use AI to build conversion models to estimate conversions via their FLoC product which they state helps privacy by bundling similarly behaving users together which means marketers will lose visibility into accurate tracking and multi-touch attributions.

A very important note is that while Google Chrome browser does represent the majority of the global market, other browsers (Safari, Microsoft edge, Firefox and many others) have not agreed to using FLoC. The fewer browsers that use FloC, the less accurate the tracking marketers will have to measure and optimize performance.

What Do We Need to Do in 2021 to Prepare for These Upcoming Changes by Google?

A number of things, actually:

• Build first-party data and audience as much as possible
• Understand which advertising channels are contributing to the multi-touch funnel
• Analyze which websites and types of websites are currently working with your audiences on display
• Understand your groups of core clients by demographics
• Develop shopping on Google to mitigate the impact of Smart Shopping
• Explore using native display advertising as those focus on contextual targeting and use first-party cookies

While these changes require a significant shift in planning and analysis, our team has seen many significant changes in digital marketing over the years and is prepared to continue to deliver excellent results for our clients.

Contact us to learn more about the (un)Common Logic approach to using data to improve your digital marketing and achieve your business goals.

Interested in how to rev up your customer acquisition efforts in our new privacy-centric world? Come to our panel discussion with speakers from Meta, Morgan Stanley, and more on February 28, 2024 at Vuka in Austin, Texas.