Marketing

Third party cookies dying – a disaster for the advertising market? – eCommerce magazine

Some browser programs such as Mozilla Firefox and Apple Safari have been blocking third-party cookies by default for a long time. And Google Chrome also wants to follow suit by 2022. Cookies are mainly used for User data collection and storage – which ultimately serves the use of personalized advertising. And that’s exactly why they are a thorn in the side of many. But what are the consequences of the dying of cookies for the advertising market and what has changed since the judgment in spring 2020?

Third-party cookies are used to create user profiles

Anyone who has explored the World Wide Web in the past twenty years has heard of third-party cookies. But what can they actually do and how exactly do they store data? They serve in particular Tracking users and in this way create comprehensive profiles: which websites has they already visited, how long has they been there, which links have they clicked and what conclusions can a provider draw from them for their own products? A fairly accurate picture of a person is quickly created in the form of a data packet. The third-party cookies are set by third parties and not by your own website, like the so-called first-party cookies.

With the help of third-party cookies, personalized advertising can be used in a targeted manner, with individually tailored offers that (could) actually interest the user. The wastage of such offers is minimized many times over. Third-party cookies have therefore been more elementary so far Part of data-driven marketing. With their slow death due to the new regulations, there are growing fears that many advertisers will initially have to market blindly, which in turn can lead to financial losses. And this fear is justified.

Without third-party cookies, targeted advertising becomes more time-consuming

Online retail companies will have to reorient themselves and realign their methods. Not only the targeted addressing of existing customers, but especially the New customer acquisition was often based on the data packets from third parties. The fact is: According to current estimates, targeted advertising will be more time-consuming and expensive. But while the use of third-party cookies has long been the most reliable tool for advertisers, there are a few alternatives that should not be ignored.

Companies do not have to jump completely into the deep end. After all, there were enough reasons to look for alternatives even before the decision of the BGH in March 2020. Blocking by some browsers, surfing in private mode or even some ad blockers made it necessary to look for alternatives beforehand. But be careful: some of them will also be prohibited in the future. Anyone considering fingerprinting as a solution will be faced with similar circumstances as with cookies. According to the GDPR, this method also requires express consent or is blocked by default.

Login alliances, contextual targeting, and first-party data

Login alliances are currently being hotly debated. They represent a promising alternative, especially in e-commerce. Several advertisers get together and do something together. Your customers use a kind of shared login tool in which their data is centrally managed and then made available for appropriate advertising. However, the question of success lies with the user and whether this method is generally accepted.

Contextual targeting is also discussed again. From old to new, because it had its heyday some time ago and is now preparing its comeback. Contextual targeting is, as the name suggests, based on its environment and tries to integrate itself there as best as possible in order to reach the desired target group. Viewed content counts and not the general user profile. The whole thing works mainly via a keyword comparison.

High relevance of first-party data

Incidentally, the generalization of cookie dying is not entirely correct, as first-party cookies, unlike their unloved relatives, are not on the decline. On the contrary: first-party data is more relevant than ever. Companies should therefore rely on the data that they already receive from their customers – and which they usually provide willingly. This also arouses more confidence in the user.

In addition, consumers can still give their okay for the use of technically unnecessary cookies. Most likely, when you see a real benefit in it. So if personalized advertising is used well and offers added value to the customer, it is possible that they will give their consent. A cookie consent overlay is helpful here, which explains exactly which cookies are used for what and above all – probably the most important point – which advantages result from this.

Beware of using tricks

However, some advertisers continue to try to get customers to agree by deliberately confusing them. Nudging cookie banners deliberately lead users on the black ice and confuse them or influence them with the help of their formulation or visual design. In the end, they give their consent without thinking about it or even though it was not their original intention. This not only violates the guidelines, but also often leads to defensiveness on the part of users. Cookie walls are also used from time to time. According to the motto “all or nothing”, users are denied access to a website if they do not give their consent. However, according to the data protection officer, this method is also illegal.

Third-party cookies: what role do Google, Facebook and Co. play?

One thing that cannot be avoided with the whole subject is the question of the power of large Internet companies. Google and Facebook are already optimally positioned and have more personal data stored than any other provider, which is precisely why there are approaches such as login alliances. In particular, Google is currently collecting measures under the “Privacy Sandbox” project which are intended to replace third-party cookies. What sounds positive at first, however, corresponds to the interests of the group and could multiply its power again. It remains to be seen whether the privacy sandbox will prevail. What is certain so far is that nothing is certain. The search for comprehensive solutions that can satisfy providers and users continues.

About the author: Marcel Hollerbach is CMO and board member of Productsup. The company offers SaaS solutions for managing, optimizing and playing out product data and customers such as IKEA, Trivago and Superdry. As a serial entrepreneur, Marcel Hollerbach is also a founding partner of Cavalry Ventures Management GmbH, a venture capital firm specializing in investing in European technology start-ups. Hollerbach also founded the hiClip video streaming platform. This was taken over by the Adconion Media Group and NativeAds, which merged with the Seeding Alliance and are now part of the Ströer Group.

Also read: A new case for marketers: why cookies are disappearing