In our previous blogs, we told you more about the background of the cookie-less era and we shared a handy glossary. In this blog, we will tell you more about first and third-party cookies. How are they used and what does a shortened cookie lifespan mean for marketers and the customer journey as we know it today.
Spoiler: a customer journey will not change, but how you collect data points will!
What are first party cookies?
At the moment we usually refer to First Party Cookies and Third Party Cookies. Technically, first and third party cookies are the same kind of files. Files in which data of website visitors is stored. The difference between first and third party cookies lies in where cookies are made and how they are used by websites. Let’s start with first party cookies.
A first-party cookie comes from the website you are visiting directly. These types of cookies are generally considered “good”; they provide a better user experience. First-party cookies enable website owners to collect analytical data from customers. In addition, they help the visitor by remembering important pieces of information, such as language settings, items added to the shopping cart, username, and password. Most (Dutch) websites use Google Analytics to collect first-party website usage data.
What are third-party cookies?
As its name implies, third-party cookies are created and outplaced by third parties. A third party is another website then the website a visitor is currently interacting with.
Some common uses of third party cookies include:
- Retargeting: using previously saved cookie information to retarget visitors with visual or text ads often based on the products and services for which a visitor has previously shown interest;
- Cross-domain tracking: the practice of collecting browser data from multiple other websites, e.g. payment tracking;
- Ad-serving: use the information to make decisions regarding the ads that appear on a website, including impressions and lookalike audiences in an effort to inform advertisers on consumer preferences and ad performance.
Third party cookies are most commonly used for tracking and (digital) advertising purposes. Advertisers and marketeers rely heavily on cookies to make sense of the customer journey and we are accustomed to having cookie information available for 30 days. We now find ourselves in a situation where tracking and cookie collection have been restricted, but we often still make extensive use of third party cookies. Why? There was little need for change, up until now.
In preparing for 2022 it is important to understand that cookies play a significant role in the lifes of advertisers and marketeers. As Google Chrome announced to follow the example set by Safari and Firefox it is expected that all major browsers and operating systems will block third party cookies as of 2022 and onwards.
Though not stated clearly at this point, it is expected that Google Chrome will reduce the lifetime of first party cookies from 30 days to 24 hours, to level the playing field with their Big Tech counterparts. We will move forward on this notion towards building a sustainable future for advertisers, marketeers, and consumers.
Cookies have long been used to help marketeers gain an understanding of the customer journey. Furthermore, it helps advertisers gain an understanding of the value of their entire marketing mix, allowing them to attribute value to all channels in the marketing mix, not just to lower-funnel campaigns. The cookieless era poses a major impact on the customer journey and attribution. Cookie rejection hurts advertisers in multiple ways:
- Lack of insights: there is a great loss of data, which makes it unclear what the overall online performance is, what the trends are and what the impact and attribution of all business activities is.
- Marketing budgets are reduced because results are disappointing: unreliable metrics reporting and limited targeting options lead to reported marketing channel underperformance. This increases the chance that marketing activities will be unjustly cut off or stopped.
- Missed sales and growth opportunities: Due to undervaluation of the impact of media spending, this limits the ability to reach more potential customers and drive conversions. This is in line with the challenges we are currently seeing in upper funnel channels.
Looking at upper funnel media campaigns the majority of cookie data is lost, causing upper-funnel activity to continually be under-reported. As a result, direct conversions in reporting will increase substantially. The attributing value of channels in the marketing mix will become untrackable. We will encounter this across all marketing activities. By not being able to track a customer journey that exceeds 24 hours and by being unable to attribute a transaction to the correct platform, advertisers and marketeers are confronted with major challenges that need to be addressed.
Not being able to use third party cookies and a reduced cookie lifetime to 24 hours has a major influence on digital advertising. Merely a few changes one should consider bearing advertising in mind are:
- No remarketing; it will not be possible to remarket website visitors.
- No frequency capping; it will not be possible to adjust frequency capping in your campaigns.
- No lookalike audiences; it will not be possible to make look-a-like audiences of website visitors.
- No personalization; it will not be possible to personalize your ads.
Reducing the lifetime of first party cookies from 30 days to 1 day has a major impact on A/B testing both in advertising as well as onsite. Currently, when executing A/B testing on websites it is a common practice to create a test audience as well as a control group. Every website visitor who has seen variance A in the A/B test-setting; upon the next visit to the website this visitor will be shown variance A again. This provides the marketeer with valid data on the results of the tested variance.
The consequence of a cookie lifetime of 24 hours implies that after 24 hours, a returning visitor is seen as a new visitor. This might lead to a situation wherein a visitor will not return to the correct variance, as this should be the same variance as the first visit. Hence it could occur that upon a first visit, variance B is shown. Day 2 provides the visitor with variance A and a day later this might get back to variance B. This leaves the CXO specialists with unreliable data.
Discover Traffic Buiders Cookieless Era Impact Tool and measure the amount of data is lost for a advertiser!
Download our Dall White Paper and learn how to prepare and stay competitive in the world without third-party cookies.