Beyond ad targeting, the demise of the third-party cookie will hit key digital media functions

After Google announced this month it will phase out the use of third-party cookies in Chrome, many focused first on the impact this would have on ad targeting. But the third-party cookie has long been a workhorse in digital media, used for a host of ho-hum yet critical functions, including user profiling and audience analytics.

“Cookies are a blunt instrument,” said Michael Krauss, vp of product management at Sourcepoint. “Publishers have a love-hate relationship with cookies. It helps them monetize content, but they lose control of the audience if they aren’t sure who’s dropping them.”

Here’s a guide to the possible collateral damage from the assault on the cookie.

Frequency capping
When consumers see retargeted ads for items they have already purchased, they become frustrated. Advertisers currently manage the number of ads shown across sites by tapping a user ID. That cross-domain user ID, currently available via a third-party cookie, is read by a demand-side platform or an ad server to determine which ad should be delivered.

Media executives are predicting an upswing in the number of more contextually delivered ad campaigns since they won’t be able to target individual users by using third-party cookies. Yet even if an ad is contextually targeted and not featuring an item that a user has already bought, a consumer will likely become frustrated by seeing it multiple times, said Mathieu Roche, the CEO of universal identity platform company ID5.

“Publishers could manage it themselves on their own sites, but for this process to work across websites, we need a cross-domain ID that is currently only available via a third-party cookie,” Roche added.

Ad campaign attribution
Currently, third-party cookies have been used to link ad exposure (measured in impressions or views) to user actions (clicks, purchases and page visits) on different websites. Advertiser and publisher executives have suggested that in the future if third-party cookies can no longer be used to show which party is credited for an ad’s success, the more primitive and less effective practice of last-click attribution will return.

Affiliate publishers, which had more limited visibility of Apple’s audiences after the company updated Safari’s Intelligent Tracking Prevention policy to shorten the lifespan of third-party cookies, say they are thrashing out solutions with their affiliate networks about how to measure if their content leads to a retailer’s sale in the post-cookie era.

Single-sign on and subscription platforms
If they currently rely on third-party cookies, companies with interfaces like membership platforms, subscription management services and single-sign-on functions across multiple sites will need to develop alternative processes. Otherwise paying customers will be asked to sign in multiple times, leading to a subpar and frustrating user experience. Subscription platform companies that rely on first-party cookies placed by publishers won’t run into an issue as a result of these changes.

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“There is definitely a potential issue for federated login systems, like those developing in Europe, that might [right now] require third-party cookies,” said Michael Silberman, svp of strategy at subscription platform company Piano.

Audience analytics  
When in 2019 Apple shortened the life span of third-party cookies on Safari to seven days after updating its Intelligent Tracking Protection policy, third-party audience analytics software like Google Analytics were at risk of having inflated audience numbers. The reason: Cookies might have counted one user as two people when the same person returned to a site a week later.

Without the use of third-party cookies, other functions of analytics software can become more limited such as when a publisher with multiple properties wishes to view the number of visits a user takes to its different websites, said Ratko Vidakovic, founder of ad tech consultancy AdProfs. Some analytics companies have already started using first-party cookies or integrating analytics with publishers’ websites by setting up subdomains, he added.

Fraud and bot detection
Security companies today use third-party cookies to look for patterns in user behavior on retail or finance sites to spot oddities that could be fraudulent or nonhuman traffic. Also relying on third-party cookies, advertisers currently bid higher to reach audiences they believe to be more valuable based on browsing behavior, Vidakovic said. Users that visit a luxury car website might be categorized as being of high net worth by an auto advertiser.

“Even publishers without a strong first-party data strategy will benefit from this change,” Vidakovic said. “It’s a good thing that third-party data segments, the ones associated with third-party cookies, will go away. They have always had questionable provenance from a marketers’ perspective.”

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