In January 2021, the world of digital marketing witnessed a landmark shift as Google announced its plan to phase out the use of third-party cookies in the next two years. The other major web browser players will also be phasing out support for third-party cookies within this timeframe. This change will lead to a fundamental shift in how digital marketing will work in the future as personalization today is heavily dependent on third-party cookies.

Cookies & their Importance today

Cookies are codes dropped by a website on its visitor’s browser. It provides a unique identification with a user id and captures vital personable identifiable information and analytical data like language preferences, login details, time spent on the page, cart activity, etc. While the website domain itself owns first-party cookies, third-party cookies are owned by companies other than the website domain.
Both first-party and third-party cookies help in providing personalized experiences by assisting the marketers to give their website visitors relevant and exciting content. These cookies help build an in-depth understanding of the visitor to be hyper-targeted with better advertising and to measure the performance of such ads.
Nevertheless, data privacy is a definite downside to using third-party cookies. Visitors have no idea which organizations are collecting their data other than the organization they own or the website they visit. According to a Dentsu report, 91% of consumers are concerned about the amount of data that companies can collect about them, and 42% have taken steps to reduce the amount of data they share online. These numbers are a case to this point.

What will be the effect of the discontinuation of third-party cookies?

With the immediate effect upon the lapse of the specified two years, markets might see a significant shrink in the third-party audience, collected via third-party cookies. Therefore, marketers will need to go back to the drawing boards to find new and effective strategies to target their visitors and find new ways to aggregate audience data. This move by Google and other web browsers is a welcome move for the visitor and consumers. It will provide data security assurance as the users will know which organization is capturing their behavioral data and warrant that any unwanted third-party organization is not monitoring their activity.

How should companies navigate this change?

Companies have ample time to build new strategies to collect data from visitors and continue to provide personalized experiences.

  • Focus on first-party data collection: First-party cookies are stored on visitors' browsers by the websites they visit and owned by the website owner. They help in collecting critical analytical data, language preferences and help provide an overall good user experience. Companies must strategically invest in building capability to precisely and thoroughly capture first-party data. Companies will have to be early movers to make the most of these two years and make their first-party cookies mature enough to capture key data points, run all ID-based solutions, and ultimately increase their lifetime value.

  • Explore second-party relationships: Although a current practice among companies in co-related domains, sharing of second-party data can be really beneficial for all parties concerned. Second-party data is another company’s first-party data shared in a contractual partnership with one another. For example, Airlines share 1st party cookies with hotel chains but they don't share that data with other companies. Such symbiotic relationships might become increasingly important for companies with a substantial audience overlap in the near future.

  • Contextual Targeting: Behavioral Targeting aims to collect data on a visitor’s behavior and ensures the ad is relevant to them while mainly ignoring the context next to which the ad appears. Marketers need to evolve this approach and move on to Contextual Targeting that targets a visitor based on the content of the page in which the ad appears. As the avenues for providing personalized advertising to the audience will shrink, marketers need to go back to the basics and focus on contextual targeting to put their messaging in front of the right audience.


As the talks about the right to privacy intensify, it is increasingly becoming important for marketers to find ways to target their audiences in a way that respects their privacy.
The digital community needs to collaborate and take advantage of this opportunity to develop better processes and technologies to build personalized targeting while building an audience’s trust in a company.

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