Opinion

What the death of cookies means for retailers

Online advertising has been built on the much maligned cookie. Without cookies, online advertising as we know it simply wouldn’t exist. But in these days of increasing focus on privacy, there are big moves afoot to change the way cookies work.

With giants like Apple, Google, and Firefox driving these changes, we as an industry must adapt or perish. The death of cookies will change the way we work as an industry, which is why it’s so weird that hardly anyone is talking about it.

What are cookies?

There’s a lot of noise in the media about cookies being evil. This is nonsense. Disable all cookies on your web browser and most of the web will be broken. Without getting too technical, cookies are needed to manage a website of any complexity. There’s nothing inherently bad about them, no matter what an ill-informed tech journalist tells you.

The real problem is third-party cookies. Cookies are associated with a domain. Third-party cookies are when a website places cookies that belong to a domain that isn’t theirs.

Let’s say, for example, that WidgetShop is using the services of AdCo to do some advertising. WidgetShop installs the AdCo javascript, which is required to measure how effective AdCo’s campaigns are. This enables AdCo to see who visited the shop, but also, in conjunction with pixels, which is a bit beyond the scope of this piece, who visited all the other shops with AdCo trackers.

As a result, they can build up a picture of a user as they move across the web. This is done via third-party cookies, and this is the thing that’s currently under threat. In the days of increased focus on privacy, people are becoming uncomfortable with their browsing patterns being bought and sold, even though the information is usually anonymous.

It’s a separate but related topic to the string of new privacy laws, such as GDPR, CCPA and others, that are being discussed in Australia and around the world, and it has repercussions for online marketing mainstays like Google and Facebook tracking pixels.

Running Google Ads? Read on.

What’s changed?

It’s a rapidly moving space. Apple’s Intelligent Tracking Prevention (ITP) is a system that limits the use of tracking cookies for the Safari web browser (which makes up around 35 per cent of all web usage in Australia). ITP 1.0 was rolled out in 2017 to restrict their ability to track. Ad tech companies soon adapted, and thus started a game of cat and mouse between Apple and ad tech companies. Ad tech companies exploit a loophole, Apple updates ITP, and the game continues. We’re up to ITP 2.4 and no doubt there will be more iterations to come.

But now Google have entered the game. On January 14, Google announced that Chrome, which has 50 per cent browser share, will get rid of third-party cookies within two years. Unlike Apple, who have bullied their way through it, Google is being more consultative.

The vested interests are obvious. Apple is happy if publisher sites get starved of advertising money; it further serves their interests of turning the web into a giant walled garden and driving people further into apps, which they control and take a 30 per cent cut from.

With most of Google’s revenue coming from advertising, they’re in a different situation. However, they could rig the game to favour their own business over other advertisers. It’s a developing story so let’s see what Google does.

So what? How does this affect me?

Right now, Facebook ads are suffering. While Facebook have their enviable identity graph, it’s still built on a foundation of third-party cookies. ITP 2.4, in some cases, restricts the cookies to seven days. So regardless of what attribution window you have set in Facebook (typically 28 days post click; one day post view), for many Safari users (including the majority of iPhone users), the reality is seven days post click; one day post view. This isn’t the future, this is today. You may be reducing your Facebook budgets unfairly based on poor data.

There are workarounds for this, but unlike updating a simple tracking script in Google Tag Manager, they may involve proper development work. (Techie note: ITP treats server-side cookies less harshly than client-side ones set via document.cookie, so you may need to implement this server side.) And who knows what ITP 2.5 or Google Chrome in two years’ time will look like.

What to do about it?

There’s a lot less fuss in the industry about these upcoming changes than there should be. This could fundamentally change the nature of what we in retail advertising do.

Best case, we’ll need to bother our dev team, make code changes, update a bunch of scripts and more. Remember the rush to roll out Google Ads’ “conversion linker” tracking a few years ago? That was in response to ITP.

Worst case, our attribution will be all messed up and we’ll no longer be able to figure out how to spend our ad dollars.

Chances are the outcome will be somewhere in between, but at this stage no one knows – not even Apple or Google. The Cookie Status website gives a good overview of the current state of play, although it’s a bit technical to interpret. In the meantime, keep your eyes and ears tuned, listen to your publisher reps, and be ready – times are changing!

Mark Baartse was the former CMO of Showpo and now is a marketing and e-commerce consultant.