As an advertiser, how should we prepare for cookie opt-out? Top tips for 2023
The online professional world has been buzzing for some time now about the Cookie exit announced by Google. But now that the date is fast approaching, marketers are starting to take notice, as this change will fundamentally reshape online advertising and marketing strategy. Best practices will disappear, old analytics tools will become partially useless and we will no longer be able to rely 100% on previous online strategies.
What does this mean in practice? How did we get here? Why is this so important? What should we expect? How can we prepare for change? These questions will be answered in detail below.
How did we get here?
In recent years, the GDPR regulation has received more and less spotlight, but it is undeniable that companies working with customer data have become more concerned about data protection.
As local regulations on how consumers’ personal data is handled in the digital marketing space proliferate by the second, for example, the EU GDPR (General Data Protection Regulation) and the CCPA (California Consumer Privacy Act) have been put in place to monitor and regulate how companies collect and store personal data about consumers online. According to the GDPR regulation, both cookies and IP addresses are declared to be personal data, and therefore must comply with a number of data protection regulations when used.
The most popular browser in the world is Google Chrome, which we have used to track the behaviour of our website visitors using cookies and target potential customers with ads.
Google has therefore announced that from 2024, it will phase out the use of 3rd-party cookies in Chrome, which will bring about a major operational change in both Google and Meta (Facebook) advertising.
Which areas are affected?
What are cookies?
First-party cookies collect behavioural data to help the website owner improve its services. They record basic user characteristics such as the language preferred by the user or the product added to the shopping cart.
Third-party cookies, on the other hand, are web cookies that are developed by third parties to track users’ shopping behaviour and preferences and target customers accordingly with future online advertisements (e.g. advertising cookies).
Let’s look at a simple example: a visitor to our website browses through some products and spends some time on different product pages. Then he decides to buy only one product, a red hat, but not the red shoes he was looking at. Thanks to the third-party cookies, you may later receive newsletters and other advertisements for the red shoe that you viewed but did not purchase. Even if the user closes his browser and ends the session, the tracking data (cookies) remain on his computer.
How do cookies work?
To give a simple example: we buy some books online, and the title and author are “remembered” by the cookies. The next time we enter the online bookstore, the website reads our cookies, so it has the possibility to compile a list for us of books by the same authors or books on related subjects.
This activity is invisible to the average internet user, unless we have set our preferences to be notified when a website places a cookie on our computer.
How much have we relied on cookies so far?
The figure below illustrates the role that information extracted from third-party cookies has played in online marketing:
Why is the cookie outlet such a problem?
If the above figure is not enough to answer the question, here is another quite striking piece of data to explain. Even if you are aware of what cookies are, you may not be sure how often we use them and how much liability and potential for error they represent due to data protection legislation.
For conscious users, this will be a reassuring change. According to McKinsey & Company’s research for 2021, 66% of customers are willing to provide personal data if it gives them additional benefits (e.g. they can see personalised content in the future) or if they know exactly:
- What data do we collect?
- Why do we collect it?
- Why do they benefit from sharing the data?
- How do we protect and manage their data?
- How can they add, remove or change their data?
For website owners, however, it opens up a world of problems to be solved and therefore opportunities. Why? Because nearly 100% of websites use third-party cookies to track, learn about and target customers = display targeted ads.So for marketers, the information they can get from third-party cookies is essential.
Quantcast’s 2022 North American State-of-the-Industry surveyed more than 600 publishing and advertising professionals about the problem and the following results were obtained:
- 8% said that preparing for a cookie-free future is the top marketing priority.
- 2% said it was the top priority to tackle.
- 18% planned to address this issue in 2022.
- 4% will wait until cookies are phased out before developing new tactics.
But if there are no cookies, what then?
Those who prepare for change in time have no reason to panic. Effective responses to change already exist and we just need to implement them, but we will also have many tasks of our own to do to succeed.
- We need to rethink our current data collection and management techniques, develop new data strategies if necessary, and look for new alternatives.
- The primary focus must be on first-party data acquisition, data security and transparent data management, so we need a completely new data strategy.
- Targeting, buying and optimising advertising becomes more difficult.
- There will be gaps in measurement, which will affect the optimisation process and ultimately the effectiveness of marketing activity.
- Google Analytics and other measurement tools will become less reliable.
- Areas such as cookie consent banners will become much more important.
What do marketers expect after the phasing out of cookies?
How prepared are you to take the cookies out?
If you’re not in the first group, as a conscious marketer or business manager, you need to start working on the subject right away, because the task is not easy, and success requires precise expertise and strategy.
What are your main tasks?
- Build a direct customer relationship.
Customers like to have a direct relationship with the brands that matter to them, which makes them more engaged with the brand. - Make sure you have the right measurements.
In the future, rely on first-half data and focus on collecting and using it. - Boost your performance with relevant advertising.
Users want messages and content that interest them, that have some value to them. - Tell them what value you offer.
Customers are more likely to share their personal information with sites that offer them tangible benefits/value. - Be transparent about your data management.
How you manage their data and how they can dynamically change it is important to your customers.
If you feel that you need professional support, please feel free to contact us or continue reading our article for more information on the transition.
What does Cookie Exit mean in practice?
In short, we will no longer be able to use the measurement and tracking methods we have been using to target our ads and measure results once cookies are removed.
- The result metrics of online advertising systems embedded in advertisers’ websites (e.g. Google Ads, Meta Ads) typically work with 3rd party cookies, which will not be available once they are removed.
- The well-established Universal Analytics also works with cookies (although it is a first cookie, it will stop collecting data on 01.07.2023). In addition, it cannot track broad changes in user behaviour, such as increasingly complex cross-device user journeys.
But what then?
To clarify: removing third-party cookies does not mean the end of tracking. We will need to make some technical improvements to ensure that our advertising systems continue to work effectively in the future, and we should do this as soon as possible to gain a competitive advantage.
The most important things to do:
- Set up Google Analytics 4 measurements for your website or webshop
- Implement Google Consent Mode into your website
- Set up Google Ads enhanced conversion measurement and FB/META advanced matching
- Facebook Conversions API setup
Why is it important to act in time?
- Because many people will wait until the last minute to do the work (either because they do not know about the expected changes or because they do not understand their significance) and in the final “battle” not everyone will find an agency with spare capacity.
- Because the data used and collected previously will not be 100% compatible with the new data, it will be more difficult to infer trends, for example.
- Because there is always a business opportunity and a competitive advantage in change. Anyone who starts these processes now will have the time and resources to consciously design the first half of data collection and data analysis, and by the time the old measurement methods are no longer used, they will have enough historical data to keep their online advertising running smoothly.
Let’s take a closer look at why all website owners and online advertisers who don’t want to lose data and therefore revenue because of the migration should take the above steps as soon as possible.
- Google Analytics 4 (GA4) set up
In addition to concrete measurement data, GA4 also works with modelling. It uses artificial intelligence to supplement our measured data in cases where no measurement is possible – because the visitor does not consent to cookies. It is also able to predict future behaviour of our visitors based on their past behaviour and offers audience lists such as “expected customers in 7 days” that we can target with Google ads.
In addition, GA4 is finely tuned to changes in data protection regulations around the world, allowing for more detailed data collection, retention and deletion settings.
In Universal Analytics, historical data will be available for an indefinite period, but from 1 July 2023, no new data will be accepted. The system is already not receiving any updates or bug fixes from Google, so it is likely that there will be an increasing number of operational problems when using it. - Implementing Google Consent Mode in your website
So far, a website owner has had two choices for measuring website visitor data. Either use a cookie window and ask users for consent to use cookies, or measure without them. On average 5-50% of website visitors accept the cookie window, we have no factual data on the remaining users. If you use the second option and do not have cookie consent on your website, you will have all the data collected, a lot of information, but you could also face serious legal problems and fines (so if you are currently doing this, you should be charged immediately.)
To solve this dilemma, Google provides a so-called Google Consent Mode. Google Consent Mode works by automatically blocking cookies if the user does not give the appropriate consent. In this case, it measures with so-called pings (tags) in a GDPR-compliant manner. The tags are loaded on websites before the consent dialog box appears and dynamically change depending on the users’ decision to consent to cookies. With Google Consent Mode, data-driven marketing is not only possible, it’s future-proof. - Google Ads enhanced conversion measurement and Meta advanced matching
Currently, Google Ads also uses “third-party” cookies to measure conversions. However, enhanced conversion measurement sends “first-half” data to Google Ads along with our conversion measurement tags, even if we cannot measure with ad cookies. For example, the email address and phone number provided by the customer could be first-party data. This data is automatically encrypted, cannot be decrypted and is passed on to Google’s system, so that it is no longer considered personal data. - FB/META advanced matching
Meta advanced matching adds user-supplied “first-half” data to our Meta pixel event metrics, similar to Google Ads enhanced conversion metrics. - MetaConversions API
To understand the Meta Conversions API, we first need to understand a little bit about the Meta pixel that we have been using for measurement. In short: Meta pixel is a browser-side tool, it tracks data through the user’s browser (if the user enables cookies and does not use cookie blockers.)
Summary
It is important to make the most of the remaining 18 months and rigorously evaluate our current data collection strategies and processes, as well as our analytics platforms.
The death of third-party cookies will no doubt bring drastic, even uncomfortable changes that marketers cannot afford to ignore. While the ‘cookie-less’ future promises many benefits in terms of privacy and security, it may be a difficult one for many who already use cookies to target customers.
As the change is big and will affect many areas, it is important to prepare for it early and instead of last minute tactical moves (which often only serve to put out the fire), a conscious strategy is needed and perhaps more important than ever to prepare for the transition with an expert partner who can implement the best solutions both strategically and technically. This will allow marketers to continue to achieve their marketing and business objectives without compromising user privacy.