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Third-party cookies have now been a staple of digital advertising for over twenty years, as they allow marketers to track their customers’ movement across different platforms, effectively measure conversions, and optimize advertising spend. However, extensive concerns regarding consumer privacy, alongside tough regulations like GDPR and CCPA have led to privacy-first approach making traditional third-party cookies obsolete.
As Google joins Firefox and Safari in the phase-out of third-party cookies by the end of 2024, performance marketers face a monumental shift. Sumit Gupta, Data Analytics Leader at Snowflake and Dropbox, has had his share of adapting to a world without cookies, and is here to provide his insight on what the future holds: How do we measure ad performance? How do we target and retarget users? Most challengingly, in what way do we maintain Return on Advertising Spend (ROAS) in a post cookie world?
Multi-touch attribution has heavily relied on third-party cookies to track users to various websites for years, and now that super power is lost in the woods. The loss of cookies leads to severe blinds spots within the customer journey.
● Loss of proper cross-channel attribution: Splitting impressions, clicks, and conversions into specific components gets much harder without third-party cookies.
● Less effectiveness of retargeting: Performance marketers are highly dependent on retargeting users that have previously interacted with the ads, but with no cookies, these audiences shrink significantly.
● Rise of dark funnel marketing: More conversions will be credited to “direct” traffic which undermines what specifically drives sales.
Regarding the attribution problems, Sumit has told me “Inability to attribute clicks to channels has been the biggest challenge as far as reporting goes. The fact that we don’t have full funnel attribution in the traditional sense is quite problematic for improving Return on Ad Spend and estimating long term metrics like Lifetime Value (LTV), Click to Purchase Rate, etc..”
With third-party data becoming obsolete, first-party data (data collected directly from users through owned channels) is the newest gold standard of marketing analytics.
● Brands are doubling down on first-party data collection through email subscriptions, loyalty programs, and on-site interactions.
● Platforms like Facebook and Google are pushing server-side tracking (e.g., Facebook Conversions API, Google Enhanced Conversions) to fill data gaps.
● Explicit user consent is becoming the norm, requiring brands to build trust and transparency in their data collection strategies.
Before overly intrusive behavioral tracking took hold, ads were targeted based on context, like showing travel ads on a travel blog. This still works exceedingly well and is now coming back into favor for those seeking privacy.
● AI-powered contextual targeting: AI driven contextual targeting is now more sophisticated in analyzing website content, sentiment, and user intent.
● Privacy-friendly contextual ads: Contextual advertising that takes data privacy laws into consideration targets relevant audiences without infringing on data privacy laws.
● Large publishers are leveraging AI: They are developing audience segments using data science algorithms instead of relying on cookies.
With the disappearance of third-party cookies, United ID 2.0, LiveRamp’s IdentityLink, and hashed email tracking based solutions are gaining traction.
● Logged in user data is now more valuable than ever. Brands that successfully motivate users to register accounts will be at an advantage.
● Retail media networks like Walmart Connect, Amazon Ads, Flipkart ads) are thriving, as they give advertisers access for their relevant first-party shopping information.
Below are some adaptions that Sumit and other industry experts have made to the shifts in the industry
Spend more on email marketing, loyalty programs, and customer contact. Link CRM systems with advertising networks for better tracking and personalization.
Move towards incrementality testing and media mix modeling to evaluate a campaign’s impact without third party cookies. Use predictive analytics to shape users and devise smart targeting plans.
Leverage Google’s Enhanced Conversions and Meta’s Conversions API to track ad interactions without infringing on personal privacy. Use server-side tracking to minimize the impact of browser restrictions on data collection.
Implement AI-driven ad placement strategies that use contextual advertising. Spend some budget towards the Topics API from Google and other interest-based targeting platforms.
Going forward will be difficult without cookies, but it will also open doors for new solutions. For analytics experts like Sumit, finding new ways to ingest and transform data is the new reality. At the same time, performance marketers will have to change how they tackle attribution, segmentation, or retargeting campaigns. The silver lining is the potential for building robust direct connections with customers by leveraging first-party data, and privacy-compliant advertising offers. The relevance of performance marketing is no longer in user tracking; rather it lies in delivering relevant, value-centric experiences in a consumer respectful manner.
The issue at hand is not if you're ready for a cookieless future, but whether you are ready to prosper in it.
