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Cookie Deprecation – The Fall Out Explained and what it means for both Advertisers and Publishers

The concept of privacy has become a central theme, prompting significant shifts in the way data is collected, used, and shared online.

One of the pivotal changes that has rocked the affiliate world is the depreciation of cookies – after all, cookies have been the main way to track and assign sales to affiliates for over twenty years now.

On a wider scale, cookies have long been the backbone of online tracking for the digital marketing industry as a whole, providing valuable insights into user behaviour, preferences, and engagement patterns. However, concerns over user privacy and the rise of stringent data protection regulations, such as GDPR and CCPA, have prompted a re-evaluation of the cookie ecosystem.

Major browsers have supported this move with the likes of Safari blocking third-party cookies as part of its Intelligent Tracking Protocol (ITP) which was released in 2018. A year later, Firefox made a similar move. As with most things in the online space, most eyes have been on Google given that almost 63% of online users browse the internet and buy their products using Chrome.

The rollout of this blocking started to happen at the beginning of 2024 with Google announcing that it was testing its latest features by restricting third-party cookies by default for 1% of users.
It’s assumed that this rollout will continue until all third-party tracking solutions are blocked, so let’s have a look at what this blocking of cookies means for both publishers and advertisers.

Effects on Publishers:

Audience Targeting Challenges:

Publishers have traditionally used cookies to display relevant ads to their audience regardless of where they are on the site. This increased level of targeting has allowed them to charge advertisers more money and bring in much-needed revenue.

In addition, by implementing third-party sales tags, publishers allowed their advertising partners to spend more money with them due to the optimisation of ad campaigns to highly targeted audiences. With the deprecation of third-party cookies, publishers face a significant challenge in continuing to offer the targeting and reporting solutions to which advertisers have become accustomed. Unless they can find a solution, while adhering to the privacy guidelines, they will be unable to continue to offer the advertising solutions that they currently do.

Revenue Impact:

The big impact of this restriction in ad campaigns will likely be seen in the publisher’s bottom line. If advertisers are unable to target users accurately or optimise their campaigns, they’re likely to decrease (or remove entirely) the performance based budgets that they have for a particular publisher. This will be felt particularly by those publishers heavily dependent on programmatic advertising where large amounts of personalised, targeted ads can be bought and sold in less than a second.

Enhanced Focus on First-Party Data:

The depreciation of third-party cookies has shifted the spotlight onto the need to capture users first-party data – that’s the data that is submitted directly to a website from a user, typically via a registration or sign up and opt in process.

Registration hasn’t normally been required on most publishers’ sites meaning that publishers don’t tend to have a lot of first-party data. This, again, has meant that publishers aren’t in a position to serve relevant ads as they know very little about the person browsing a page.

That is all changing, though, with publishers now investing in building and leveraging their first-party data sources to maintain a deep understanding of their audience, which they can then pass on to their advertising partners.

User Experience and Content Personalization:

Cookies play a crucial role in tailoring content and user experiences. Without them, publishers are now challenged to provide personalised content without relying on traditional cookie tracking methods.

Once you’re on a site, a publisher wants to keep you there (so that they can serve you more ads and relevant content to increase conversion). Therefore, AI-driven solutions and contextual targeting become vital tools for publishers aiming to maintain a high-quality user experience while maintaining low bounce rates.

Effects on Advertisers:

Loss of Granular Targeting:

Advertisers or brands now face a loss of granularity in targeting as third-party cookies are blocked from potential customers’ browsers. We discussed above how brands are unable to target users to the same degree on a single website, but the bigger hit for them is the ability to precisely target users across multiple sites.

Adaptation of Attribution Models:

The value of tracking users across multiple websites is that it allows advertisers to build user journeys which helps them to see which sites played a significant role in the build-up to a sale.
These attribution models were heavily reliant on third-party cookies which will no longer be available as Google joins the cookie deprecation movement.

Advertisers, therefore, need to reassess their attribution strategies and understand which partners they can double down on to increase sales if there is to be a short term fall out.

They need to focus on alternative methods such as extending their first-party data sources, building probabilistic models, or employing advanced machine learning algorithms to measure the impact of their campaigns accurately. All of which may be very costly.

Rise of Privacy-Compliant Strategies:

For advertisers, any solutions they put in place must go beyond simply replacing optimisation and reporting strategies, though.

For the first time, everything has to align around user privacy. Failing to do so can be hugely costly with GDPR alone penalising companies up to 20 million euros or up to 4 % of their total global turnover (whichever is higher) if customer privacy is put at risk.

Collaboration with Publishers:

All of the above means that advertisers and publishers must collaborate more closely than ever to ensure privacy is honoured along the advertising chain, while also guaranteeing the effective use of media spend. As such, we have seen first-party data sharing and cooperative advertising initiatives increase massively over the last few years in this channel.

Embracing the Future: Looking at solutions

There’s no doubt that as the cookie depreciation landscape unfolds, the online landscape will be forced to change in a way that the media industry has not seen before.

Publishers and marketers alike must proactively seek innovative solutions to thrive in this new era. Here are a few ideas of how they can do it:

For Publishers:

Improve your First-Party Data Collection:

Publishers need to prioritise the optimisation of their first-party data to provide advertisers with the granularity of targeting that they need.

We’ve already seen several publishers and broadcasters force users to provide 1st party data via registration in order to access content. This will continue and it wouldn’t be a surprise to see publishers offer something in return (like discount codes, for example) in exchange for customer information.

Invest in Contextual Targeting Excellence:

Once this data has been collected, publishers need to ensure that they offer real value to their users by embracing contextual targeting as a powerful alternative to third-party cookie-based audience segmentation. Publishers need to use their customer data to provide high-value content and relevant ads to their readers, which will ensure a more personalised experience for users – all without compromising privacy.

Get to grips with AI and Machine Learning:

AI and machine learning technologies can help publishers gain insights into user behaviour without relying on traditional tracking mechanisms. These technologies can identify patterns, preferences, and trends, enabling publishers to deliver tailored content and advertisements based on the information available to them

For Marketers:

Diversification of Data Sources:

Advertisers must look beyond their first-party data to provide the value that they’re looking for from advertising campaigns. This involves relationships with data providers directly or technology platforms that can offer them additional information.

Diversification in this way ensures resilience in the face of a changing landscape – but comes with an increased risk of ensuring that everything is aligned with privacy regulations which are continually changing

Try Advanced Attribution Models:

Advanced attribution models that go beyond traditional cookie-based tracking need to be explored.

These models will need to rely on machine learning algorithms, and predictive modelling to provide a more nuanced understanding of what’s working based on probabilistic likelihood rather than deterministic cookie data.

Open Collaboration with Publishers:

Advertisers have traditionally foregone direct relationships with publishers – preferring to buy media across a wide range of publishers programmatically.

This will need to change in favour of stronger collaborations with a smaller number of trusted publishing partners.

That way, advertisers can benefit from shared first-party data and minimise their own exposure to data that might not have been collected properly. Working one-to-one with a publisher will also allow greater insight to be provided into the efficiency of a campaign and how it can be optimised.

Conclusion

The depreciation of cookies represents a unique shift in the digital advertising landscape, prompting publishers and marketers to reevaluate processes and strategies which have been built up over twenty years.

However, this period of transition also offers opportunities for innovation, collaboration, and the development of more privacy-conscious practices. By embracing change and adopting forward-thinking solutions, both publishers and marketers can thrive in the evolving world of digital advertising.

One thing is for sure, though. The stakes for getting it right and wrong have never been higher.