In today’s digital-centric marketing landscape, a considerable portion of a brand’s marketing budget is dedicated to online channels, and this trend is unlikely to wane as the digital focus intensifies. 

However, heightened awareness among consumers regarding data management has prompted significant changes. The Australian Government’s stringent stance, exemplified by increased penalties for data privacy breaches in November 2022, underscores a global shift towards safeguarding user data. 

Concurrently, privacy changes from tech giants like Apple, seen in the form of the Privacy Opt-in for cross-platform tracking from iOS 14.5 onwards, have profoundly impacted advertisers’ ability to target users cross-platform, leading to a projected $10 billion loss for Meta.

In the wake of these privacy changes, traditional digital platforms are feeling the pinch. Apple’s prompted Cross-Platform Tracking Opt-in, with only a 16% opt-in rate, illustrates a growing user trend of opting out of advertising experiences. This shift in user attitude and behaviour, compounded by impending changes to third-party cookies, is causing a ripple effect across the digital marketing landscape. 

For industry giants like Google and Meta, it signifies a potentially substantial blow to their prospective revenue streams, and for leading brands’ marketing strategies around the world that rely on these platforms to target individuals with personalised ads.

Understanding the Cookie Ecosystem: First vs. Third-Party Cookies

At the heart of these changes lies the phasing out of third-party cookies, a critical component of the marketing puzzle. To comprehend the significance of this shift, let’s delve into the cookie ecosystem.

Cookies, in essence, are files that gather data about internet users. For years, web browsers have employed cookies to track users and store personal information. There are two primary types of cookies utilised in the market: first-party and third-party.

First-party cookies operate within the domain of an owned channel, such as a website, collecting data on its visitors, and are used to:

• Understand who visitors are and how they interact with their site
• Helps marketers better connect with their target audience
• Save user info for future visits
• Help inform basic website analytics 

For example: 

When a user adds items to their shopping cart on a team’s merchandise site, this cookie is created to keep track of the selected items. If the user navigates to other pages or temporarily leaves the site, the cookie ensures that their chosen merchandise is retained in the cart. It simplifies the shopping experience by preventing users from losing their selections every time they browse a new page.

On the other hand, third-party cookies controversially extend their reach beyond a website’s boundaries. Aiding brand marketing efforts in several ways:

• Retargeting: Tracking users and serving them ads for items or pages they previously viewed.
• Ad targeting: Serve users specific ads based on their browsing history and individual profile.
• Cross-site tracking: Track user touchpoints after they’ve left a website.
• Social media buttons: Using social media login buttons as identifiers to further track user demographics and interests.

For example: 

You visit a website and check out a pair of shoes from the brand, but don’t purchase. Across social media, you then receive ads for a period featuring the shoe that you were looking at earlier, prompting you to return to the website and purchase. Aside from the shoe you looked at, you may also receive ads from competing brands in the same category.

Countdown to Change: The Why and When

While the implications of third-party cookies’ demise are profound, the question arises: why is it happening, and why hasn’t it happened yet? 

The answer lies in the unpreparedness of many advertisers, stemming from a lack of control over first-party data. Google’s decision to delay the blocking of third-party cookies stems from the widespread reliance on its platform by advertisers. 

With the phasing out ramping up in the second half of 2024, 68% of marketers admit to feeling underprepared to not prepared at all for this seismic shift.

Embracing Change: The Rise of Zero/First-Party Data Strategies

Amidst the challenges, a glimmer of hope emerges in the form of Zero/First-Party Data strategies. As third-party cookies fade away, 87% of APAC brands have identified 0PD/1PD strategies as the core of their alternatives, followed by contextual targeting at 25%. 

While these strategies may have smaller catchments due to their need to capture 1PD that has opted-in to the brand, the possible precision with targeting offers reassurance to prospects. This shift isn’t just about adapting; it’s an opportunity for brands to truly understand their customers, providing a personalised experience that can drive conversions.

The impact of this shift goes beyond financial outcomes, paving the way for new metrics to identify positive marketing impacts. As we bid farewell to third-party cookies, brands must recognise the need for early adoption of 0PD/1PD strategies to stay ahead in the evolving digital landscape.

“Your digital strategy should start with the fan and end with the fan, and it shouldn’t be static. Continuous analysis and improvements, with consumer needs at the centre of every decision, is a recipe for long-lasting success.”

Dean Drury, Head of Product and Innovation – Head of Product & Innovation, CSM

In the face of the impending phasing out of third-party cookies, brands are urged to act swiftly, strategising for a future dominated by First Party Data approaches. Those who proactively embrace this change will find themselves well ahead of competitors as the cookie phasing-out process unfolds. The shift offers opportunities not just for heavy hitters but also for smaller players with sophisticated database structures.

A first-party data strategy is paramount for brands with sports partnerships seeking to tap into a highly engaged market by leveraging partnership intellectual property (IP). Leveraging the partnership IP ensures that the brand’s messaging aligns seamlessly with the passion and identity of the sports community, fostering a more authentic connection. As a result, brands can create tailored campaigns that resonate with the engaged market, enhancing brand loyalty and driving meaningful interactions that extend beyond the traditional consumer-brand relationship.

It’s time for marketers to future-proof their initiatives and navigate the evolving digital landscape with confidence, avoiding the pitfalls of being caught unprepared in the cookie jar.