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Google's third-party cookies ban bolsters new data tracking tools

Google will cancel third-party cookies by 2022, and is already eroding their value. Analysts and vendors predict what data strategies and technologies will replace it.

By 2022, Google will eliminate third-party cookies in its Chrome browser. The move forces some advertising and marketing leaders to hunt for new technologies to replace the time-tested tool to reach online audiences.

Consumer packaged goods companies heavily reliant on third-party cookies to reach large swaths of consumers already are leaning more heavily on mobile apps and other methods of collecting their own data, such as graph IDs, to reduce reliance on third parties, analysts said.

Smart TVs and mobile-device apps, which don't rely on third-party cookies to track users, may be new advertising marketplaces, Forrester Research analyst Joanna O'Connell said.

"That said, if you are a brand with a whole bunch of first-party data, you're in a better position than brands that don't," O'Connell said. "You already have a direct line with the consumer, a much clearer line of permissions with that data than someone who doesn't."

Online media outlets that have stayed afloat during the transition of advertising from banner ads to data-driven marketplaces may also benefit from the death of the third-party cookie, Constellation Research analyst Liz Miller said. Those companies have collected first-party data all along, understand the marketing segments their audiences represent and have time-tested advertising platforms.

Table outlining differences between first- and third-party cookies

Cookies passed expiration date

Long a target for hackers and bane of privacy advocates, third-party cookies -- typically left by an ad server hosted on a site different from where a person is visiting  -- primarily exist to retarget ads based on browsing activity. Privacy regulations such as the EU's General Data Protection Regulation and the California Consumer Privacy Act limit third-party cookies' reach because they force companies to spell out to consumers how they use cookies and mandate opt-outs.

"In the world of adtech, we have completely commoditized engagement, and our customers are revolting," Miller said.

Third-party cookies are not to be confused with first-party cookies, which exist to enhance customer experience by saving information such as login information or shopping cart contents between visits to a particular site.

Apple already eliminated third-party cookies from its Safari browser, and Mozilla followed suit in Firefox. Google's decision to do the same for Chrome -- which controls 61% of mobile browsers market and 69% of desktops -- that forces the adtech and martech sectors to find new methods of reaching online audiences. In contrast, Safari, the nearest competitor, owns a little less than 23% of mobile and a little more than 17% of desktops.

While Google plans to eliminate third-party cookies by 2022, the erosion has already begun, with recent code changes that Adobe said could affect cookie data collection.

Third-party cookie replacements

Other cookielike workarounds that track data, such as device fingerprinting, are doomed to fail, said Diaz Nesamoney, CEO of Jivox, a digital marketing company. Jivox is investing in graph ID technology as one method to replace third-party cookies with richer first-party customer data. Google and Apple always catch up to technologies designed to outfox the browsers, and they run afoul of consumer and regulatory movements against cross-site data tracking.

Credit card companies have to worry about privacy. But digital marketing has been sort of the wild west, and it's time they grew up.
Diaz NesamoneyCEO, Jivox

"[Google eliminating third-party cookies] will cause the industry to come up with standards and solid ways to do what marketers and consumers want, in a compliant way," Nesamoney said. "We do that in other parts of the business. Credit card companies have to worry about privacy. But digital marketing has been sort of the wild west, and it's time they grew up."

Graph ID vendors work as cloud services within a company's own domain and keep customer data within that domain. FullContact, an identity resolution company that also touts personalization through graph IDs as a viable replacement to third-party cookies, has joined standards bodies to steer the technology.

"The power has shifted from third-party advertisers using contextual and other types of means to track [consumers] toward first-party data," said Chris Harrison, president of FullContact. "You need first-party identity resolution to comply with the customer's wishes for privacy, and for customer experience."

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