Privacy vs. Personalization: Advertising Without Third-Party Cookies

Internet privacy has been the hot issue for the past few years. New privacy policies such as the GDPR, CCPA, and LGPD are forcing companies to reassess the way they gather and store user data through their website. On the flip side, these privacy policies are forcing companies such as Google and Facebook to evaluate how they are gathering user data to be used for ad targeting (and other services). The objective is to find a balance between protecting the privacy of their users while allowing advertisers to still serve ads to relevant audiences.

If you’ve ever run display advertising, you know that having the ability to target your ads to specific audiences is the only way to get cost-effective results. HTTP cookies are how companies like Google and Facebook are able to identify people’s interests, and what they are currently researching to buy. Google announced in early 2020 that their browser (Google Chrome) would be moving away from using third-party cookie data in a two-year phased approach. Browsers such as Safari and Firefox have already blocked third-party cookies completely. However, as Google owns 66% of the global desktop internet browser market share (statista.com 12/2020), this change has a huge impact on the standards of browser privacy.

Will They Continue Offering Audience Targeting?

The solution is still in development but essentially Google has released a different way of tracking individuals that no longer records someone’s entire browser history, but instead hides them “in the crowd”. The FLoC (Federated Learning of Cohorts) identifies categories of browsed sites and lumps groups of individuals together with no possibility of someone being “fingerprinted”. Initial side-by-side testing by Google claims that this solution has a return of 95% of the conversions per dollar spent compared to the cookie-based method.

Changes to Keep an Eye On

What else besides ad targeting is affected by these changes? I’m so glad you asked… conversion tracking! Yes, attributing your conversions back to your ads is also based on the use of cookies in some cases. That solution is a little more complicated but essentially Google is playing with the idea of reporting back conversions in groups so no single conversion can be identified. They encourage advertisers to implement sitewide Google Analytics tagging on their sites and to limit the number of event-based conversions in preparation for this change. Recording clicks on your ads is first-party knowledge so you’ll always have an indication of how your ad is performing.

What About Facebook?

What is Facebook going to do? Facebook already implemented a work-around for third-party cookie blocking back in 2018 when they updated their Facebook Pixel code to include first and third-party cookie tracking. If you have the Facebook pixel on your site and you are asking your visitors to accept cookies on your site, you are sending information about your users back to Facebook. This information is not only being used to attribute your visitor data back to your Facebook advertisements, but it is also helping to build audience targeting data for other advertisers to use.

If you’re thinking all of this sounds like display advertising and attribution are in jeopardy- that’s just not the case. Google and Facebook will always find a way to make it possible to use targeted advertising effectively because it is a pillar service of theirs. Some of the best minds in digital are working on a solution and when everything is said and done it’s very likely we won’t see any indication of the final switchover. Nevertheless, Top Floor will continue to follow this closely and modify our clients’ strategies as needed. If you have any questions on privacy vs personalization or need help with your digital marketing strategy, let’s talk!