Third-party cookies: Google's delay and the impact on advertising

In this article, we summarise Google's recent decision to delay the removal of third-party cookies and explore what it means for the future of the digital advertising industry.

Google's recent decision to delay the removal of third-party cookies from its Chrome browser is an important development in the world of digital advertising.

It's a decision made after four years of effort, characterised by delays, disagreements and resistance from the advertising industry, and the search engine giant's realisation that the original plan wasn't working and a new direction was needed. 

Whilst this move may come as a relief to some, it raises important questions about the future of digital marketing, advertising and data protection. 

Understanding first-party and third-party cookies

To understand the full implications of Google's decision, it is important to distinguish between first-party and third-party cookies:

• First-party cookies: are set by the website a user is currently visiting. They are primarily used to improve the user experience by storing settings, preferences and login information. For example, if you visit an online shop and it remembers your shopping basket or login details, this is thanks to first-party cookies. Some of these cookies are also used for reporting and analytics tools such as Google Analytics and HubSpot.
  
  
• Third-party cookies: These are also stored on your device after a website visit, but also track your journey to other websites. They are primarily used for tracking and advertising purposes and allow companies to build a profile of a user's interests based on their browsing behaviour on different websites. This allows advertisers to target adverts based on the user's online activities. This is the case, for example, when you see advertising banners next to news articles or blog posts. 

When Google first announced in January 2020 that it was abolishing third-party cookies in its Chrome browser, this understandably caused concern in the advertising industry. The insights gained from the user profiles created by the advertising software using these cookies have been instrumental in ensuring that targeted advertising makes the best use of available budgets. 

Cookie phase-out delay: Short-term relief or new challenge?

Google's recent decision to delay the end of third-party cookies in Chrome is likely to be seen as a temporary reprieve rather than a permanent solution. Many advertising platforms that rely heavily on third-party cookies for audience targeting are likely to be relieved by this decision, as it provides more time to develop alternative strategies for a cookie-free future.

However, it is important to recognise that Google's delay is not an indefinite postponement. The company is strategically avoiding setting new deadlines, likely to avoid criticism of further delays and to reduce regulatory scrutiny. This suggests that third-party cookies will eventually be abolished, and the advertising industry needs to adjust to this reality.

Rising privacy concerns: the growing rejection of cookie tracking

While Google's delay in phasing out third-party cookies allows more time for the development of new technologies, the shift towards privacy-conscious consumers is also accelerating. Our data shows that a significant proportion of users - sometimes up to 60% on certain websites - are already rejecting cookie tracking, including first-party cookies, completely. This trend shows that users are becoming more aware and cautious about their online privacy and are opting to disable cookies, even if it might affect their user experience.

If Google Chrome users are eventually given the option to switch third-party cookies on or off, we could see a similar trend, with a significant number of users opting to disable third-party cookies. For advertisers who continue to rely on third-party cookie technology, this could lead to a decline in campaign performance as their ability to effectively target users decreases.

Advertising industry faces urgency to innovate amid cookie phase-out delay

For the advertising industry, the delay in the abolition of cookies offers a window of opportunity for innovation and adaptation. However, it should not be seen as a reason for complacency. Advertisers and technology providers need to accelerate their development of cookie-free tracking solutions that respect user privacy while maintaining the effectiveness of digital marketing campaigns.

Furthermore, this delay may have unintended consequences for Google itself. If Google does not develop and roll out its alternative to third-party cookies in time, Chrome could lose market share to other browsers that have already banned third-party cookies. This could put pressure on Google to accelerate its plans, which could lead to a more abrupt transition than originally anticipated.

Addressing misinformation: educating users on the role of cookies

One of the most worrying aspects of the ongoing debate about cookies is the spread of misinformation. Many consumers do not know exactly what cookies are or how they work. This ignorance has led to more and more users rejecting all cookies, including first-party cookies, for fear of being ‘tracked’ or ‘watched’. This widespread rejection of cookies hurts both the analytics and advertising industries, as it makes it more difficult to collect accurate data and place adverts effectively.

Advertisers are primarily interested in understanding how they can reach potential customers who are likely to be interested in their products or services. This is not about profiling or invading privacy, but rather about optimising advertising spend and ensuring messages are seen by the right audiences. The industry needs to work to educate people about the benefits and limitations of cookies to combat this misinformation and encourage a more informed user base.

How compliance with data protection standards is shaping the future of advertising

However, it is also important that the advertising industry recognises that users also have a right to privacy. As regulations on how and when personal data is used become more stringent, advertisers that put processes and standards in place to ensure they comply with regulations can gain audience trust by doing so. 

It is this philosophy that Huble has applied in our successful completion of ISO certification to demonstrate the high standards we set as an organisation in the way data is handled.

Advertisers and advertising software companies that prioritise the highest privacy and security standards are likely to lead the future of advertising. We've already seen this with website CMS platforms prioritising data security and the impact of GDPR on digital marketing. At Huble, we've even explored alternatives to Google Analytics to provide privacy-conscious customers with privacy-compliant analytics solutions. In any case, the companies that view privacy standards as an opportunity rather than a hurdle are the ones that will thrive as regulations come into force and changes unfold.

Adapting to a cookie-free future: embracing innovation and privacy in advertising

Google's decision to postpone the removal of third-party cookies is a pivotal moment for the advertising industry. Whilst this is a short reprieve, it demonstrates the continued need for innovation and adaptation in an evolving digital landscape. The future requires a focus on user privacy and transparency, coupled with effective marketing strategies. The move away from third-party cookies provides a valuable opportunity to develop new, privacy-conscious methods of communicating with consumers.

If you need support with your next advertising campaign or are seeking a more strategic approach that aligns with your marketing objectives, generates leads, and drives sales, contact the Huble team to explore our digital advertising services.