The End of Third-Party Cookies: What Now?

The end of third-party cookies is something we’ve been discussing on the blog for a while now, but never in a dedicated article, always in others talking about paid media.

Today, the conversation will be different. Our very own founder and CEO, Fabrício Toledo, came down to the content department and asked: we urgently need to talk about the end of cookies!

This is because the topic is no longer a future conversation. Over the past two years, all digital marketing publications have been warning that this day would come. And it’s happening this year.

In 2024, Google is indeed withdrawing support for third-party cookies from Google Chrome, and this will disrupt the lives of many people using Google Ads.

And it will literally break many alternative ad platforms that rely on these cookies to function. They are an important part of their products.

But we’ll address this a bit better throughout the article. Ready to learn all about the end of cookies in 2024?

What are cookies?

To start the article off right, we need to understand well what cookies are in general, and then delve into their main differences.

Cookies are small lines of code applied to a website’s source code. They allow the site to capture information about who is browsing.

For a long time in the early days of the internet, cookies served a function more oriented toward user convenience, along with cache.

They served—and still serve—to store login information, remember your shopping carts, offer related content, etc.

First-party cookies, which are these more basic ones, have never caused any controversy because they are not related to user privacy across the entire internet.

The biggest controversy is third-party cookies. These have been in the crosshairs of all browsers for some years now, with Chrome taking real action to remove them as an option in 2024.

We discuss these differences better below. Take a look:

What is the difference between first-party and third-party cookies?

If cookies are useful for remembering user actions within sites, why do they need to end?

The truth is that first-party cookies will continue to operate normally. It’s the third-party cookies that will be disabled. But what is the difference between the two?

The name says a lot. Let’s suppose you have a website and install cookies to track your user and offer personalized products and offers throughout their navigation.

These are first-party cookies, installed by you on your own site, and they capture information about your users.

Source

Third-party cookies are different. They are installed on other people’s websites and capture information about user navigation on them.

This information is then passed on to ad platforms, such as Google Ads, which use it to increase the accuracy of their ads.

For example: you went to G1 to see the latest news and interacted with its content throughout the morning.

There are third-party cookies installed on the G1 site actively collecting information and passing it on to ad platforms.

Advertisers benefit from this because targeting becomes much deeper, considering much more precise and diverse information than the standard model.

But how exactly does this importance play out? We talk more about it in the next topic. Stay tuned:

Why are third-party cookies important?

The biggest importance of third-party cookies is—or was 😅—the personalization of ads with AdTech platforms.

Remember you accessed G1 in the previous topic? And that within G1 there were configured third-party cookies?

Well, through these cookies, an AdTech platform can target your browsing history within G1 itself.

For example: you spent the whole day reading news about some AI-related launch.

An AdTech platform can create ads tailored just for you, who read these articles and are interested in AI.

This is the main functionality of third-party cookies, and it moves a substantial amount of capital in the AdTech world.

Just understanding: AdTechs are online platforms focused on creating and organizing ads.

The largest in the market today is Google Ads. And at the same time, the most used browser in the world is Google Chrome.

That’s why it took Google so long to start the movement to remove support for third-party cookies in its browser—the search giant will suffer a real financial impact from this decision.

And since we are talking about the decision, follow me as I have some points to discuss about it:

Why are third-party cookies going to end?

The problem with third-party cookies is that they operate in a very legally complicated environment.

While they are absolutely important for Paid Media strategies, they are quite invasive and do not allow user consent.

Not allowing consent is one of the biggest problems for the privacy of people online, and the primary target of legal resources such as GPDL.

As efforts to regulate online privacy evolved, it became clear that there is no longer room for data capture without user consent.

And online privacy laws take the issue of consent very seriously. They understand that it is impossible to provide consent to ad platforms you don’t even know exist.

One thing is to allow first-party cookies on a site. Another is to allow data capture by a site and then its sale to various platforms.

The point is that we need to understand that third-party cookies are not being banned from the internet completely. It’s just that the major browsers no longer support them.

It’s the same result, but understanding this helps us also understand Google’s reluctance to remove support.

Apple removed support for third-party cookies in Safari in 2013, around the same time Mozilla removed it from Firefox.

Google took another 10 years to make this transition, largely because they themselves are an AdTech, probably the most impacted by the change.

So, simple answer: third-party cookies are ending due to user privacy issues and advances in its regulation, from initiatives like LGPD and GDPR.

When will third-party cookies end?

The process has been gradual. Quite gradual, to be honest.

Google began disabling third-party cookies in January 2024, initially targeting 1% of all Chrome browsers worldwide.

This way, Google gets a bit more time to measure the impact that the end of cookies will have on its flagship, Google Ads.

It’s important to highlight here how dependent Google is on Google Ads. It is their largest source of income. Actually, I’m not just guessing: Google itself has made it clear that its main funding comes from Ads.

Third-party cookies have always been a very important part of this business. Target audience segmentation is its biggest advantage over other platforms, and suddenly it will lose a large part of the information that drives it.

Think about Social Ads. Actually: think about Instagram Ads for a moment.

Imagine if, overnight, you could no longer make segmentations based on the profiles a person already follows, or the type of content they usually interact with.

Let’s go beyond that: imagine if the Meta Pixel were disabled, invalidating your ads based on first-party cookies.

The impact on our friend Zuckerberg would be simply immense. Suddenly, instead of continuing to practically print money, he would be forced to rethink the way ads are made.

That’s what Google needs to do now. And that’s why we will only really see the complete end of third-party cookies at the end of 2024.

What is the Google Privacy Sandbox?

Google’s Privacy Sandbox is the method the search giant found to guide its advances in privacy within Chrome and Android apps.

But we also need to understand that the Sandbox is not one thing. It is a large initiative involving developers, tech companies, Google itself, and so on.

Basically and without getting too technical—but if you are techie, this link explains better—the Sandbox’s principle is the use of independent APIs so that the end of third-party cookies does not greatly impact the web experience.

And of course, at the same time, without losing fundamental privacy resources.

Through a set of APIs, the Sandbox is a constantly developing environment that seeks to maintain a balance between personalized ads and user privacy.

It is the most advanced thing today in this reconciliation between ads and privacy. And, at least in Chrome, it will determine what the future of ads will be like from now on.

This video below helps you understand better what it really is:

Notice that this video is from 2019 when Google started thinking about the end of cookies for Chrome and what alternatives would be most viable.

But while the Sandbox is developing, advertisers and AdTechs are on high alert throughout 2024.

Let’s better understand what the main impacts of the end of cookies are?

Difficulty tracking user interactions

Certainly, the biggest problem is really the difficulty in tracking users.

With third-party cookies, advertisers have many more targeting options for their audience.

We gave the example of G1, but we can simplify it and put it in our experience for you to understand better.

Let’s suppose you entered Zendesk’s website and researched chatbots to generate leads there.

You consume some materials related to this subject but soon realize that Zendesk does not work with this type of chatbot: their product is focused on customer service chatbots.

However, Zendesk has third-party cookies and passed this information to AdTechs. This allows us here at Leadster to use your audience profile in our ads, which become more targeted.

In other words: we are not advertising to a demographic segment, but to people who have shown direct interest in our platform.

Without third-party cookies, we and all advertisers no longer have this information, making it difficult to create ads and completely transforming our results with them.

More on this now:

Increase in budget dedicated to paid media

And what happens when advertisers have more difficulty finding their audience? Increased campaign costs.

Initially, at the end of 2024 with the real official end of cookies, we will see campaigns that cost X now costing 3X, just because the audience is now less precise.

This is the main challenge for marketers with the end of cookies: creating campaigns will become much more expensive than they have been in recent years.

We also cannot take into account the necessity to use more labor force. Without the information provided by cookies, it will be much more laborious to identify and define target audiences.

All this generates higher costs, which, in turn, impact campaigns and, ultimately, the return that companies see with them.

Diversification of Marketing Strategies

This price increase will bring significant problems for marketers, but also some opportunities.

The main one is the possibility—or rather, the necessity—of investing in alternative ways to generate leads and sales.

Today, there is no better channel than paid media to generate visitors to your site. This happens for two main reasons:

1. Ads work, always have and always will. And digital ads even more so, as they do not have a complex infrastructure behind them, like TV commercials do;
2. Online ads are extremely efficient. You control how much you invest and how long the campaign runs, in addition to having incredible indicators that allow you to create very precise and specific strategies.

However, these two points are now significantly threatened by the end of third-party cookies.

First, because ads have always worked, but they always worked with them. It’s quite difficult to know if they will continue to work since Google does not provide performance statistics for ads in browsers like Safari and Firefox.

The second point is also highly threatened, as we saw in the previous item: with the end of cookies, campaigns become less targeted and therefore, less efficient.

The End of Third-Party Ad Platforms

It’s important to remember that although Google is the largest AdTech in the world, it is not alone in the market.

There are several other AdTechs that together account for about 20% of the market, with Google dominating the rest.

The end of third-party cookies, for these platforms, will often mean their complete end.

This is because they depend heavily on them. In fact, their main differentiator is precisely this: who has more third-party cookies and how their organization is done ad by ad.

This is a significant impact on the marketing world because these AdTechs will find themselves in a very complicated scenario. Without cookies, they have no product.

What to Do if You Rely Heavily on Third-Party Cookies?

This category, “brands that rely on third-party cookies,” includes practically everyone who uses Google Ads today.

In fact, many people use third-party cookies without even knowing they are using them. For many, these cookies are just another setting in Google Ads. The important thing is knowing how to use them, not necessarily understanding how they work.

But I’m getting a bit off track here 😅

If you find yourself in this situation—relying heavily on third-party cookies and at the same time fearing what will happen now that they are ending—I’ve brought three tips to help you.

Only three because, at the moment, it is not very clear what will happen in the future.

It could be that Google implements miraculous solutions with the Privacy Sandbox, and little changes for advertisers.

Or it could be that the end of cookies in 2024 is much worse than we are imagining.

In any case, these tips are universal and work both now, in the preparation phase, and later when cookies actually disappear from Chrome.

Google Enhanced Conversions for Web

This is a feature aimed at organizing the data obtained through first-party cookies on your site.

You are certainly seeing all over the internet that valuing these first-party cookies is the main way to deal with the problems that the end of cookies will bring.

The problem is understanding how to work with this data, right?

Enhanced Conversions allows you to have a deeper insight into your users and implement first-party cookie data into your campaigns.

Basically, it gathers information obtained in a conversion on your site, encodes it, sends it to Google, and then matches the data with the Google account of the person who made the conversion.

This improves the conversion event as a whole, as well as allowing much greater control over first-party cookie data.

You can learn the technical details of the practice by clicking here.

Minimize Expenses and Increase ROI

Actionable strategies to deal with the end of third-party cookies are still being developed, and few are actually being implemented.

So, what remains for us at the moment is to make changes to our own strategies.

It has never been more important to make good segmentations in Google Ads. It has never been more important to configure conversions in Google Analytics.

This is the time to reduce costs to wait out the storm. Review your campaigns, reduce the amount invested for now, and keep observing what can be done to maintain a positive ROI.

Keep Up with Google’s Developments

The biggest problem with the end of third-party cookies is certainly the uncertainty of how everything will be in the future.

Without support from Google, it’s impossible to say how everything will be in a few months, right?

But believe it: the support they could give, they are already giving.

In some situations in digital marketing, there’s not much to be done. Third-party cookies are ending, and it is very likely they will not be replaced by something as precise and rich for marketers.

So, what you can do now is follow Google’s main initiative, the Privacy Sandbox, to understand it well and start implementing some points here and there.

Many people are saying that Google “left everyone hanging,” but in fact, the one who loses the most with the end of cookies is Google itself!

So, get ahead. Start working today by researching and delving into the subject.

And don’t forget to sign up for your free trial here at Leadster!