Third-party cookie deprecation - statistics & facts
In January 2020, Google announced that starting in 2022, its browser Chrome would no longer accept third-party marketing cookies. The move was later postponed to the first quarter of 2024, when Google began eliminating cookies for one percent of Chrome users. This was supposed to be followed by a full phase-out in the second half of the same year. However, in April 2024, complete deprecation was put off again until the beginning of 2025. The company cited “ongoing challenges related to reconciling divergent feedback from the industry, regulators and developers” as a reason for yet another delay. The United Kingdom’s Competition and Markets Authority (CMA) was especially vocal about its doubts regarding the move. In its April 2024 report, the agency ordered Google to pause the process until competition-related concerns were addressed.
Even though cookie deprecation and its consequences were named top marketing concerns of 2023, marketers are already pinning their hopes on the change to solve numerous problems, such as (re)targeting, data onboarding, and data activation. As of mid-2023, first-party universal identifiers were seen as the most promising cookie replacement solution. At that point, it was being tested by 25 percent of marketers worldwide. In May 2023, four European telecommunication providers rolled out a joint venture called Utiq that offers publishers and advertisers such an identifier. Other popular solutions were private marketplaces (PMPs) and data clean rooms. The latter was a technology Disney chose to develop and offer to brands in order to profit from the change.
What are third-party cookies?
Cookies collect demographic information about internet users, such as age, gender, product preference, and information on previous searches. Such data is then used to target consumers with digital ads tailored to their profile. Chrome is not the first browser to take a stand against third-party cookies. Mozilla’s Firefox started work on limiting the power of cookies back in 2013, and Apple’s browser Safari began preventing user tracking by limiting cookie use in 2017. However, Chrome’s move will have the farthest-reaching consequences, as the browser holds nearly two-thirds of the global browser market. There are countries, such as India, with its 1.4 billion internet users, where the share reaches 90 percent.Who will profit?
According to Google’s vision, consumers will be the primary beneficiaries of the transition, as their personal data will no longer be collected, processed, used, and possibly also traded by a myriad of companies across the globe. However, U.S. marketers do not share this view; two thirds of surveyed industry experts believe that the changes will not improve consumers’ control over their data, and over 50 percent think that privacy concerns will persist. Additionally, organizations skeptical of Google’s move argue that the company aims to conquer an even larger market share under the new cookieless conditions, as the search giant has access to consumer data from sources unavailable to its competitors. This is confirmed by the results of a recent survey showing that more than eight in 10 UK retail and e-commerce marketers were planning to move to Google Analytics 4 (GA4) after cookies have been phased out .Who will lose?
First and foremost, advertisers will lose. Without tracking, online ads will not be able to reach their target audience as well as they did before, and sales revenues, especially in the e-commerce sector, will suffer. This development will likely lead to a decline in digital advertising spending, not only because decreasing revenues often cause reduced spending in general but also because advertisers might decide to cut down on digital advertising in favor of more effective media formats. In addition, lower ad spending can negatively affect online publishers whose existence depends on ad revenues. As third-party cookies are the base for programmatic advertising, around which an entire ad tech subsector was built, vendors of supply-side and demand-side platforms, ad exchanges, and data management platforms will also experience a drop in earnings. Finally, if industry predictions come true and cookies are replaced by first-party data (which a company collects from customers via its own systems), trade in consumer data will increase exponentially, disproving Google’s claims of putting user privacy first. On top, without third-party cookies, consumers will be facing a less personalized and thus less relevant online shopping experience without gains on the digital privacy front.What is the advertising industry doing about it?
Four years after the world first heard of Google’s plan, a majority of surveyed marketers said they believed that third-party cookie deprecation was a positive development, as cookie-based identification was inefficient. What is more, every three out of four businesses worldwide reported adopting at least one third-party cookie replacement solution, and another 20 percent were planning to do so in the future.Even though cookie deprecation and its consequences were named top marketing concerns of 2023, marketers are already pinning their hopes on the change to solve numerous problems, such as (re)targeting, data onboarding, and data activation. As of mid-2023, first-party universal identifiers were seen as the most promising cookie replacement solution. At that point, it was being tested by 25 percent of marketers worldwide. In May 2023, four European telecommunication providers rolled out a joint venture called Utiq that offers publishers and advertisers such an identifier. Other popular solutions were private marketplaces (PMPs) and data clean rooms. The latter was a technology Disney chose to develop and offer to brands in order to profit from the change.
