When it comes to cookies that track users on social media and websites, the party is starting to wind down. Increasingly, consumers concerned about their online privacy are saying “no thanks” to online tracking that follows them wherever they go.
This is creating a seismic change for advertisers and publishers who have relied on this type of tracking in the past. But it’s not the end of cookies or targeted advertising.
Marketers can still tailor user experience while respecting consumer’s privacy choices, and one way to do that is with cookieless tracking.
Here’s what digital marketers need to know about the rise in cookieless tracking.
What is Cookieless Data Collection?
In the past, marketers and publishers have often relied on third-party cookies to track user interests and deliver more tailored content. Cookies are snippets of code that identify your device.
Marketers maintain that the collection of data through cookies gives users a more streamlined and personal customer journey on a website. It is easier for the site to serve ads or content based on your interest and browsing history, not just on a single website but on other sites or devices as well.
For businesses, cookies allow them to see a collection of data, including the type of device they are using, pages they visit, and their browsing history. This information can be used to help businesses design better marketing campaigns for their target audience, create new products, and more.
However, regulations and tech changes are pushing sites toward a cookieless future.
With cookieless data collection, data is collected on the server-side instead of through a third-party cookie. This still allows publishers and marketers to deliver more tailored content, while still respecting their privacy.
Why is Cookieless Data Collection Important?
In order to understand the forces shaping cookieless data collection, it’s important to understand how cookies work. There are two main types of cookies used in online marketing:
First-party cookies: First-party cookies are those that the primary website owner uses to collect user data. Let’s say you create a wishlist on a website. If the site itself stores that information, it will likely be a first-party cookie. First-party cookies are also used for storing passwords and other essential information.
Third-party cookies: Third-party cookies are those generated by a website other than the one you are visiting. Typically, these are created and managed by advertising networks that website owners and publishers use to earn income (e.g. Google Ads or Yahoo ads). Here, trackers collect information regarding the browsing history of the user along with their activities on the website to help digital marketers to deliver more targeted ads.
Anyone who has spent time online has experience with third-party cookies. You search for a new phone, for example, and suddenly you’re seeing ads for phones on other websites, even those completely unrelated to phones or tech.
It has become increasingly common for websites to ask users if they accept cookies, and to allow them to customize the types of cookies they accept. This is in large part due to data privacy regulations like the General Data Protection Regulation (GDPR), EU’s privacy law, and the California Consumer Privacy Act (CCPA) which gives consumers more privacy over data that is collected.
In addition, some web browsers have stopped third-party cookie tracking, and the major player in this space, Google, is expected to do the same in the not-too-distant future.
Cookieless tracking allows for the anonymous tracking and collection of data. This tracking allows the data to be captured and stored as first-party data. Thus, even when a user rejects cookies and a browser doesn’t support third-party cookies, you can still collect data to create an even better digital marketing strategy.
Publishers and marketers who fail to adapt will likely spend more money and get a lower return on their ad spend (ROAS).
Cookie-based tracking is subjected to a range of regulations. These regulations vary among countries and geographic areas, which means it is very important to read and understand the regulations for the areas of the world in which your website will be operating.
For the EU, “...the regulations governing cookies are split between the GDPR and the ePrivacy Directive.” (Note that even if your business is based in the US or outside the US, you may need to comply with GDPR.)
Meanwhile in the U.S., Bloomberg law warns “...there are various state and federal laws that include cookies as regulated personal information…[such as] the CCPA”.
Changes to Browser Restrictions
The Firefox browser stopped cookie tracking in 2019, and Apple stopped cookie tracking in its Safari browser in 2020. Google Chrome is scheduled to do the same late in 2024. With these browsers preventing the collection of third-party data there is the growing need for cookieless data collection.
Increasing Use of Ad Blockers
Ad blocking tools like Ad Blocker, are also becoming more popular with users. Since many banner ads are served up by ad networks, they can be impacted by changes in cookie tracking.
How Does Cookieless Tracking Work?
The process behind cookieless tracking is relatively straightforward. Script runs when you visit a web page, collects the data, then sends it to the server to be stored as first-party data. Companies offer various scripts, some of which pair up with metric reporting interfaces such as Google Analytics.
Why Do Marketers Need to Switch to Cookieless Ecommerce?
There are several reasons that marketers should switch to cookieless ecommerce, but the two most important are privacy concerns and the end of third-party cookies.
Privacy concerns around personal data and security continue to evolve, and using cookieless tracking can help reduce some of those concerns as information is stored as first-party data. It’s easier to get consumer consent. And data storage can be more secure (if stored properly).
Outside of privacy concerns marketers will need to switch to cookieless tracking for the simple fact that third-party cookies are being phased out by many popular browsers. As third-party cookies become less and less effective, digital marketers will need to find other tracking solutions to create highly targeted campaigns.
How Will This Impact Ecommerce?
The shift to a cookieless world will have a significant impact on ecommerce.
Publishers may find ad revenues– an important source of income for many websites– decrease.
Digital marketing teams will find it more challenging to reach customers through tailored ads and retargeting.
The truth is, though, that the shift has already begun. Marketers and publishers will need to focus on finding other ways to nurture customer relationships such as email marketing, contextual advertising (relevant ads), affiliate marketing–and by using cookieless tracking.
Online marketing isn’t going anywhere; but the tools that marketers use will continue to evolve, and those who adapt are more likely to experience success.