The End of Third-Party Cookies
Late last year, Apple announced the implementation of iOS 14. The new operating system will render Apple’s Identifier for Advertisers (IDFA) dead. Apple’s iOS 14 will prompt users to either opt-in or opt-out on data tracking for each app. Most advertisers and marketers preempt that most users will largely opt-out. Thus, they would not be able to track online activities and preferences. This will largely affect valuable analytics and insights among social media apps.
The main controversy on Apple’s iOS 14 was focused on third-party cookies. These elements are used to collect information about an online user from page to page. For example, when a user reacts to a post on Facebook, third-party cookies will save the reaction in a cache folder. Facebook’s AI will later absorb the information, which collectively, will be used for ad segmentation and targeting. A digital marketing speaker Hong Kong notes the importance of third-party cookies as providing helpful insights for future marketing campaigns. Without them, it will be hard to determine what users prefer and want.
So, is it really the end of third-party cookies? Let’s check and see!
WHAT ARE THIRD-PARTY COOKIES?
Cookies are small files stored by websites in an online user’s device. Generally, there are three different types of website cookies?
- First-Party Cookies are files saved on the website itself. They are used to identify a user between the website’s pages.
- Second-Party Cookies are shared files between the website and its partner. These are commonly used in affiliate marketing.
- Third-Party Cookies are small files saved by a website from other sites that a user visits. These files are the basis for analytics and insights that are helpful to ad segmentation and targeting.
A social media agency Hong Kong has demonstrated third-party cookies in an example scenario. Let us say that you are browsing some information about a plan for a Cancun vacation. You liked the photos but decided to put off the plan until next year. The following days, you will notice seeing a frequency of ads about a Cancun vacation. This means that the website’s machine learning has already recorded your third-party cookies and ranks Cancun ads as your current interest.
Third-party cookies are largely used by advertisers, marketers, and servers to track an online user’s behavior and translate them into virtual user profiles. So, if you have ever seen an ad that matches your recent online activity, third-party cookies have already tracked you and your current search intent. They are what digital marketers call personalized advertising.
Under the data protection law, third-party cookies are very controversial since they fall under the invasion of user’s privacy. Although, to some extent, their results are beneficial to users. They make it easy for online users to find campaigns and information relevant to their interests and preferences. The downside is being spammed with a lot of annoying ads. But most websites are transparent enough to explain third-party cookies. They also give users the option to block third-party cookies.
WHAT IS APPLE’S IDFA?
Apple’s iOS 14 has greatly impacted advertisers, marketers, and servers by technically killing IDFA. It is the short term for “Identifier for Advertisers” that Apple’s iOS uses to track third-party cookies. In September 2020, Apple’s iOS 14 updates gave users the option to allow or block the IDFA per a user’s app. This is to strengthen the company’s stance that privacy is a user’s right.
Among the most affected apps are social media platforms like Facebook, Instagram, Twitter, etc. It also affected Google’s search results. According to a video marketing agency Hong Kong, the implementation of iOS 14.5 has also affected mobile and video advertising. This is because IDFA is the major folder where mobile advertisers and marketers depend to personalize mobile and video offerings.
Apple’s iOS 14.5 data privacy protection made it a requirement for developers to get permission from a user to access their devices through a local sharing network. This included data tracking across websites.
After the implementation of iOS 14.5, around 95% of American users opt-out of data tracking. Worldwide, the existing 70% of iOS users allowing IDFA goes down to around 10% to 15%. So, out of the 728 million iOS users globally, only 72 million to 108 million opted-in to data tracking. Therefore, as a large percentage of iOS users disabled data tracking, 2021 marks the end of third-party cookies.
HOW SHOULD BRANDS SURVIVE THE END OF THIRD-PARTY COOKIES?
The end of third-party cookies is not the end of digital marketing. Rather, it means the need for a shift in digital marketing strategies. There are two basic ways to do that. One is through contextual targeting, and the other is through a universal ID.
Contextual targeting allows a website to display relevant web pages based on the content or keywords. For example, if a brand wishes to promote sneakers, they can put ads on dedicated sports pages or marathon runner’s history. They may be quite limited in reach, but they can reach consumers with a higher buying intent.
Universal IDs are common identifiers used by different platforms. They are either tracked via their personal email, phone numbers, or first-party cookies. These identifiers also allow data tracking across different channels and platforms. The only challenge with such a third-party cookie alternative is that a website needs to seek agreement between many publishers. Most publishers only approve websites that are related to their niche. So, segmentation and targeting may also be very limited.
Even though it is the end of third-party cookies, digital marketing goes on. Digital marketers will find a way to replace them. Other alternatives like contextual targeting and universal IDs may help. But the key is to be able to connect to the audiences in an authentic and relevant way.