Google has finally decided to act on its initiative to deprecate third-party cookies. Announced in 2021, and after several postponements, the withdrawal process has now been rolled out. The plan is to target 1% of the audience in the first quarter of 2024 and cover the remaining over the year in a phased manner.

This is clearly not an easy decision. As a leading web browser with over 66% of the market (Source: StatCounter), there is much at stake. Almost 90% of Google’s revenue is generated from advertising enabled through third-party cookies.

For marketers, Chrome's tracker cookies are the power behind the online digital ad campaigns. From the time third-party cookies were introduced three decades ago, they have been indispensable for marketers and Google alike. It has been the fount of all data on user behavior. These are the sources for insights into audience behavior and the most accurate way to identify the target audience. Cookies gather information that helps businesses plan and execute online marketing campaigns.

And for users, third-party cookies ensure an excellent online experience.

Then why are cookies vanishing? What changed? For that, let's look at how cookies are used.

Online businesses use a combination of third and first-party cookies placed on sites to gather data related to user behavior and needs.

First-party cookies are those that the domain owner specifically places on the site. These details are available only to the host site and help provide a better user experience - such as remembering language preferences, login details, shopping cart items, etc.

On the other hand, third-party cookies are those placed by a party other than the domain you are viewing. These track user behavior to gather data around the demographics, browsing history, and specific interests of the site visitor. When the user navigates to another site, these cookies follow them.

The data gathered is shared with businesses, which use the information and opportunity to display personalized, relevant ads to the user on sites they are visiting. Third-party cookies are, therefore, primarily for adware. They are used to display ads based on online behavior.

What has changed is the rising concerns over the use of this very private data.

Privacy and data misuse fears have made users apprehensive of the personal information collected and shared with unknown parties. Monitoring bodies took cognisance of this and the GDPR and the CCCA came into existence.

With these privacy regulations coming into the picture, the pressure on browsers to allow users greater control over their personal data arose - which meant that third-party cookies had to stop sharing personal data with third parties. Browsers such as Mozilla's Firefox and Apple acted quickly and blocked the use of third-party cookies.

Under pressure to adhere to the regulations, Chrome had been gently pushing out the deprecation date while feverishly working on alternatives - now found in the Chrome Privacy Sandbox.

The Privacy Sandbox initiative looks at striking a balance. It seeks to create solutions that will provide companies and developers alternate marketing tools using legitimately acquired data while also protecting people's privacy online.  The goal is to deliver the same level of user experience using user-consented data - eliminating concerns over unapproved data collection or misuse.

The Privacy Sandbox appears to be a viable alternative to third-party cookies. It allows online advertisers access to user information without compromising user privacy.

What this means, though, is that digital advertising could change. Ads could become more contextual based on the site visited. Businesses will have reduced access - only those details users are willing to part with will be available. There may also be a higher level of accountability attached to the use of data and sources.

Chrome's third-party cookies have always been a critical part of every marketer's strategy. These support targeted campaigns, displaying ads to interested visitors and capturing leads through retargeting across multiple sites. Replacing this will not be a cakewalk. But with the privacy sandbox, marketers are sure to discover a better, more sustainable alternative as we see the cookie vanishing from our websites.

For now, we can only watch, learn and adapt.

Source.