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Cookies were once a fundamental element of digital advertising, leaving marketers to scramble for an alternative after multiple browsers announced that they would be phasing out third-party cookies. Google itself is still working on that transition, but Apple’s Safari already blocks all third-party cookies by default.
This is all part of a larger evaluation of current privacy standards in digital advertising. Apple took another major step by requiring users to opt into Facebook tracking in their iOS 14 privacy update. These changes have dramatically transformed the online tracking landscape, making life that much more difficult for digital marketers.
In this article, we’ll explain the importance of cookies to contemporary tracking techniques and take a look at what ecommerce vendors are doing to adjust to a cookieless future. While the loss of third-party cookies undoubtedly poses a challenge, digital advertisers can still use a variety of tools to help track activity across multiple channels. Check out our website to try Omnisend free if you’re looking for a new way to target your campaigns without cookies.
What Is Cookie-Based Tracking?
At the most basic level, browser cookies are small text files typically stored on your computer after you visit a website. Cookies can store various pieces of information depending on the needs of the website.
First- vs. Third-Party Cookies
As mentioned above, the recent moves against internet cookies only apply to third-party cookies—in other words, cookies created by someone other than the site you’re visiting.
With that in mind, first-party cookies won’t be affected. Unlike third-party cookies, first-party cookies are used by the website you’re looking at.
For example, a website might store your preference if you switch their interface from regular to dark mode. This requires storing a file on your computer, but the information will only ever be used to remember your preference on that individual site.
Third-party cookies are generally a greater concern than first-party cookies. Third-party cookies are typically placed by advertisers, who use them to track user activity—often without the user’s consent or knowledge.
Furthermore, these cookies can be used on any site that works with the same party. If you’re targeted by an ad on one site, for example, the advertiser may be able to retarget you on a completely unrelated site simply by having their code on both websites.
As third-party cookies are phased out across the internet, more and more businesses will come to rely on their own data using first-party cookies. With that being said, this is just one of many ways in which marketers will adjust to third-party cookies going away.
Why Do Marketers Need to Switch to Cookieless Ecommerce?
As mentioned above, policy changes from browser giants like Apple (Safari), Google (Chrome), and Mozilla (Firefox) were largely responsible for pushing marketers away from third-party cookies. On the other hand, third-party cookies were already under increased regulatory scrutiny due to concerns surrounding data privacy.
The California Consumer Privacy Act, for example, took effect in 2020 and established a regulatory framework for websites that gather personal information from California residents. Personal information could include anything from IP and email addresses to geolocation and browsing history. The bill itself reads:
“A business that collects a consumer’s personal information shall, at or before the point of collection, inform consumers as to the categories of personal information to be collected and the purposes for which the categories of personal information shall be used. A business shall not collect additional categories of personal information or use personal information collected for additional purposes without providing the consumer with notice consistent with this section.”
Similarly, the European Union’s General Data Protection Regulation (GDPR) describes clear conditions for compliance:
- “Receive users’ consent before you use any cookies except strictly necessary cookies”
- “Provide accurate and specific information about the data each cookie tracks and its purpose in plain language before consent is received.”
- “Document and store consent received from users.”
While none of these regulations specifically prohibit websites from using third-party cookies, they impose significant new requirements that may make third-party cookies less practical for some websites. Combined with the prohibition of third-party cookies by major browsers, it’s no surprise that we’re at the beginning of a cookieless future.
How Will This Impact Ecommerce?
Attributing conversions to digital ads is vital for any ecommerce vendor in 2021—it’s nearly impossible to improve your approach if you don’t know what your customers are responding to in the first place. Many advertisers have grown accustomed to a multi-touch attribution model, which attempts to identify the contribution of each touchpoint to an eventual sale.
Multi-touch attribution was widely considered an improvement on earlier forms of attributing sales. Last-click attribution, for example, gave full credit for each sale to the last engagement before the customer followed through with the purchase. While this strategy had some merit, it obviously lost a lot of nuance and made attribution far too unreliable to be used effectively.
Unfortunately, the loss of third-party cookies will make multi-touch attribution much less insightful—at least outside of platforms like Facebook, Google, and Amazon that offer centralized user data. Marketers will have to come up with new ways to measure the efficacy of each interaction and form of content.
Similarly, third-party cookies have played a fundamental role in digital ad targeting for years. A third-party cookie placed on one site can track a user across the internet and be used for retargeting later on. This was one of the main sources of ad targeting data for a decade or longer.
While cookies going away doesn’t make it impossible to target ads effectively, it adds significant new barriers that marketers will have to find new ways to overcome. Advertisers who crack the code of targeting ads without tracking cookies will be able to transition more seamlessly to a cookieless future.
How to Prepare an Ecommerce Business for Cookieless Tracking
Cookies were the center of online attribution efforts for more than a decade, and the future of ecommerce tracking remains uncertain. How marketers respond to the end of cookies will determine their success (or failure) in a world without cookie targeting.
The most straightforward solution to the loss of third-party cookies is simply to rely on your own data. While first-party data is more limited in scope than information gathered through third-party cookies, it can still contribute to both attribution and ad targeting.
Since businesses will be relying on internal data, the end of tracking cookies will likely lead to a greater gap between small businesses and larger enterprises. Walled gardens like Google and Facebook are even more valuable when marketers don’t have access to third-party data.
Effective first-party data gathering depends on strong performance across opt-in channels like email, SMS, and push notifications. These engagements aren’t affected by the loss of third-party cookies, so we expect to see a renewed focus on opt-in channels over the next several years.
While first-party data collection is still allowed by all major browsers, it is also regulated by the GDPR, CCPA, and other pieces of legislation. With that in mind, it’s crucial to ensure that your information gathering practices follow all relevant guidelines and don’t put your business at risk of noncompliance.
Marketing Mix Modeling
Marketing mix modeling is an increasingly popular targeting method that enables marketers to fine-tune their campaign strategies using aggregate data rather than personal or private information. While these models obviously aren’t perfect, they give marketers a good idea of the successes and failures of different interactions.
If you’re currently spending equal amounts of money on Facebook ads, search ads, and influencers, for example, a marketing mix model will help you optimize that spending and generate more sales on the same budget.
The main downside to marketing mix modeling is that it works at a macro rather than the micro scale. With that in mind, it may be more effective when combined with first-party data gathering and other activities that allow marketers to see things at a more granular level.
Contextual advertising offers another alternative to conventional methods of cookie tracking. With third-party cookies, advertisers rely on the third party itself to target leads based on their activity on other sites. With contextual advertising, the targeting is baked into the content of each unique page that a user might visit.
The idea behind contextual advertising is to place ads on pages that are directly related to the content of the ad. If you’re selling mountain bikes, for example, you could reach out directly to a popular biking website to see if they have space to run your ads.
In contrast to cookie-based tracking, contextual advertising doesn’t rely on any specific information about visitors. People who visit a biking website are a self-selecting group, so it makes sense to target them with biking-related ads even without any more data on their browsing or spending habits.
Contextual advertising is a common-sense marketing solution that existed long before our high-tech approaches to ad targeting. Showing a few trailers for upcoming films before a movie starts is a classic example of contextual advertising.
As with marketing mix modeling, the nature of contextual advertising means that this strategy comes with some notable limitations. Since the context is determined separately from the intention of a user, it’s difficult to know who your content is reaching. Leads often need to engage with a brand several times before making a purchase, so user-specific retargeting will still be a critical aspect of digital marketing in the cookieless future.
With third-party cookies quickly becoming a thing of the past, marketers will have to rely on cookieless tracking and trusted opt-in channels for targeted marketing. These opt-in channels, such as email and SMS will be even more critical for ecommerce marketing strategies moving forward. Try Omnisend free for 14 days to take advantage of hyper targeted automation email and SMS workflows.
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