The world of digital marketing is bracing itself for a change in the marketplace. Google announced at the start of 2020 that they would be phasing out third-party cookies in Chrome, with pilot projects and testing beginning at the end of that year.
Third-party cookies have been helping advertisers and marketers to gather consumer information for a long time and target ads based on consumer behavior. Google Chrome is the primary web browser used by two-thirds of consumers, including mobile internet browsing.
The change may be subtle for consumers and Google, but it will send shockwaves across the digital marketing sector.
How Does This Change Things?
Marketers and advertisers used to rely upon third-party cookies for access to consumer data and targeted advertisements. These cookies are also used by sites to run their on-site search engines and to make product recommendations to visitors.
When Google decided to make this change to Chrome, many websites and online businesses were justifiably concerned and began looking for an alternative to using third-party cookies to inform their advertising strategies.
Google knew it would be shaking up website development and data analytics, so it had already begun creating an alternative before it made the announcement.
Google Privacy Sandbox will be a way for advertisers and businesses to use targeted marketing online in a less intrusive way. This new toolset will businesses and marketers to use data to inform advertising strategies without compromising consumer privacy. One element of the Privacy Sandbox is called ‘Topics’. This creates a consumer profile from Chrome browser history that businesses can use to target advertising based on a broader, anonymous data set.
The biggest losers from this change will be small businesses that will struggle to compete on a level playing field with the bigger corporations. Larger companies will be able to react to this change quickly and invest in the people and technology that will be needed to harness the power of data analytics in a new way.
Why Is Google Making The Change?
There are a few reasons for this, and which one you think is more crucial depends on how you feel about Google. Consumers have become much more aware of how the data they generate is used for targeted ads and are warier about sharing their data because of it.
The concerns of consumers may be a big motivation behind the change, as Google can use the steps they are taking to protect their user data as a marketing tool for their web browser and smartphone operating system. This may not be their only motivator, however.
By phasing out third-party cookies from Chrome, advertisers and businesses will be compelled to use Google’s proprietary software and data analytics solutions: Google Analytics, and the new Google Privacy Sandbox. This gives them a lot of control over web advertising and businesses and will force many to use Google’s services to analyze consumer data.
Many in the industry think that Google looked at the problem of consumer data privacy and the effect it was having on consumer behavior and found a way to monetize it. Their influence in the online advertising space will increase too, and Google Ads and Adsense are the most profitable elements of Google’s business. Every crisis is an opportunity and Alphabet, Google’s parent company, seems to be making the most of the consumer data privacy crisis.
What Can Businesses Do To Prepare?
The first thing any business can do in anticipation of these changes is to start using first-party cookies to gather data. This can be more difficult for small businesses and companies that do not use tools that help generate data and consumer interactions like a newsletter.
It has been proven that consumers are much more likely to interact and follow links from high-quality content, and this can build up a strong database from information harvested from first-party cookies. Promoting your service rather than your product across broader advertising strategies will also help to make up for the shortfall in sales leads you will experience as third-party cookies are phased out.
Investments in other digital marketing strategies will become much more important, especially for smaller businesses that need to get more from their marketing budgets. Pay-per-click advertising will become more popular for many businesses and form a larger part of their marketing strategies.
Social media marketing, content marketing, and Search Engine Optimization will all help take up the slack that the loss of third-party cookies will create. All three of these digital marketing strategies generate data that businesses can use to make informed decisions. Though they do not offer the same quality of data as third-party cookie analysis, they will have a big part to play in the future.
How Much Power Will Google Have Over Businesses?
This is perhaps the biggest change that will come from phasing out third-party cookies from Chrome and across other Google platforms. Data analytics is a rapidly growing part of digital marketing and business intelligence. By removing one of the primary sources of data, and ring-fencing its alternative, Google is consolidating its power in the digital marketing space, where it was already very influential.
Google Shopping and Performance Max are two Google-powered tools that retailers may turn to so they can boost the awareness of their products when people search online. The algorithms and code that underpin these pieces of software are completely hidden from their users and can only be used to gain exposure on Google’s platforms like Google Shopping, Google Ads, and Google Adsense.
Online retailers and businesses are going to have to learn how to do more with less, at least in the short term. This will make it harder for marketers to rely on the information they have and limit the insights they can gain from it.
Digital marketing is going to change a lot when the phase-out is completed in 2024. Businesses need to prepare for the changes and start finding new ways to harvest consumer data to inform their marketing strategies today.
