Phase-out of Google’s Cookie Tracking and Its Impact on Advertisers

Google announced it will end third-party cookies which will potentially affect digital advertising. The Google Marketing Livestream 2021, provided information on what will come next and how advertisers can stay abreast with the shift. The phase-out aims to protect the online privacy of Google users. Apple’s Safar and Mozilla’s Firefox already block third-party cookies by default, but since Chrome accounts for two-thirds of the browser market, the impact of the phase-out will be significant to Advertisers.

Tewfic Kattan, Head of Paid Media at Sandstorm Digital, discusses the shift away from cookie tracking and how advertisers need to adapt and navigate to find other ways to reach audiences.

What are Cookies?

They are files saved on your browser that track your online activity, tracking includes browsing history, purchases, preferences, IP addresses, and geographic location.

Why is Cookie Tracking Important to Advertisers?

They help advertisers target personalized advertising to specific audiences that optimize your campaign which leads to higher conversion rates. By using data from cookies we attempt to lower the cost per acquisition (CPR) to have better control of tracking and maximizing the return on investment across different marketing channels.

What will cookie tracking be replaced with?

Google has proposed replacing cookies with a new and more private method of tracking users’ online interests, known as FLoC [Federated Learning of Cohorts], so instead of sharing individuals’ personal information, it will shift to group sharing with different demographics such as age, location, and interests. Personal browsing data would be kept and analyzed inside a user’s browser, rather than sent to other companies. Users would then be grouped into cohorts based on their interests and the rest of the online advertising industry would be able to use this aggregated data to target their messages. This will offer an alternative for Google to keep its users’ web history private and avoid privacy risks, while still granting marketers and advertisers the sufficient data they need to effectively target its consumers.

What is the future of Advertising with the phase-out of cookies?

Although advertisers rely on this data to reach audiences, the phase-out will be of great advantage to the user as their privacy will be better protected, hopefully, with rebuilding trust with the user, there is more likely they’ll opt-in to first-party cookie tracking. Transparency on how data is used and finding other means of reaching customers will likely benefit the industry in the long run.

Google’s plans to phase out the use of third-party cookies is an effort to adhere to tighter cookie privacy policies and maintain the trust of its users. Users have voiced their concern about not having control of their own data which has led Google to comply and move towards a new, more privacy-centric approach. Google maintains that advertisers will continue to be able to reach consumers as cookie tracking support reduces. It is still early on in the phase-out, and a few users are opting in tracking and sharing data, but it remains unclear what the future holds, first-party data and Google’s own insights will become even more crucial establishing customizable, targeted advertising for the future.

About Tewfic Kattan
Tewfic is managing partner and head of Paid Channels at Sandstorm. His 15+ years experience spans both traditional and digital marketing with specialism in PPC, Analytics and E-commerce Conversion Rate Optimization (CRO) working with some of the region's largest brands including Aramex and DAMAC.

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