Horrendously late to the party and with a sense of belonging that is not really earned, I’m here to explain cookies with random deli metaphors and the grace and poise of a bull in a deli.
To explain what I think is going to happen when they are removed, it’s probably helpful to explain what first and third party cookies actually are, so strap in, I’m going to give you possibly the strangest metaphor for a technology you’ve ever heard.
Imagine you go to a deli (told you), and the deli server gives you a note with your order number on it, then later when you return to the deli, they read the note and by the note they now know who you are and what you ordered. That’s basically what a first party cookie is. It’s a snippet of code that a website sets and then retrieves to work out who you are and provide you a better experience. Harmless right?
Now imagine that there are a bunch of random people in the deli, all part of a gang called the Deli Boys, and whilst you aren’t looking, they’re stuffing their own notes in your pocket about what you are doing in the deli.
Then, when you are out and about, perhaps you go into a flower shop. A Deli Boy gang member in the flower shop takes the sneaky notes out of your pocket and updates them with the fact you went to a flower shop and puts them back in your pocket. Any shop you enter where the Deli Boys are, they keep updating the notes. And by doing this, they can build up a profile of who you are and sell that to an advertiser who wants to sell you something.
That’s how third party cookies work. They are set when you enter a website (deli), but not by the website themself (deli server) but by third parties (the weird deli miscreants). These differ from the first party cookies as they can be accessed and updated whenever you visit a website (shop) that contains the third party code (a Deli Boy). Much like the fact the deli server can’t work out the other shops you’ve been in, websites with first party cookies can’t tell where you have been apart from knowing you’ve been to their site before. Third party cookies can track you over the entire internet. And eventually they’re going to be banned by Google Chrome, the world's largest web browser by market share.
We don’t know exactly how this is going to impact the advertising ecosystem but what we do have are insights from the now legendary “App Tracking Transparency” scheme Apple put into place. You will have undoubtedly seen this before, and if you worked in advertising and dealt with Facebook ads, you are probably now quaking as if you’ve just seen the Deli Boys roll by.
It was basically a pop-up Apple introduced in all apps that asked the user whether they consented to being tracked. That’s it, and this single handedly managed to wipe $10 billion a year off of Facebook’s profits alone, as they couldn’t utilise third party tracking as prolifically as they were before.
That is cataclysmic.
However, marketers still gotta be marketing. So where is the marketing spend that was going to be spent on behavioural-marketing going to go?
Most advertising now is behavioural-based, meaning it relies on reading the behaviours of users as they traverse the web. This is the reason you’ll randomly see an ad on a website for something you were just talking to your friend about. Third party ad companies have tracked your behaviour, and accurately matched it to millions of other people who displayed similar behaviours and went on to buy the product in question. Pretty creepy huh? But without the ability to track you across the web (a crackdown on the Deli Boys if you will, last one I promise), they won’t be able to do this anymore, and this is why we saw Facebook’s profits tank as they became less accurate with targeting.
We’re going to see two main shifts in the ad ecosystem when this process is all finally said and done.
Contextual advertising is going to become much more prevalent.
A new, more decentralised marketplace will open up for first party data.
For 1, this means that instead of advertisers following users round the web like a Brightonian seagull follows a hungover fresher, they’ll instead have to rely on the context of where the user is to target.
Imagine you have a running app and you want to promote it. You used to be able to find people who had searched and browsed running material (even on sites you don't own), and then follow them across the interent, absolutely blasting them with stupid ads that featured awful running puns. But as is becoming increasingly common, you won’t be able to do that fully by 2023. Instead you’ll have to advertise your app on relevant websites, like running forums and running based Youtube channels. And this leads to point 2.
This shift is going to improve the value of first party data.
Imagine you run the running forum (great pun there and the fourth use of the word ‘imagine’ by me in this blog, take that John Lennon) I mentioned earlier. Historically, you’d be able to earn advertising money by installing third party ad tech on to your site, and allow the third party advertisers to advertise whatever they wanted on your site, didn’t have to be related to running, it could be for hair plugs or any number of things, but it was all related to the user.
However, the future is going to mean that your advertising space has increased value, as you are one of the only people in the world who run such an illustrious forum. A marketplace of first party providers is going to blossom, and a more decentralised advertising ecosystem will flourish, as advertisers don’t just YOLO 100% of their budget to Facebook, and instead look to partner with different first party vendors.
Like I said about 5 minutes of rambling ago, I’m in no way early to this party, people have been writing about this for years. But no one has used deli puns to do it, so if you are an upcoming deli brand and want to advertise with some sweet first party data, I’ve got bills to pay so hit me up.