AdMedia Shares How the Demise of the Third-Party Cookie Will Affect Online Advertising

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Shockwaves traveled through e-commerce companies and advertisers when the phaseout of third-party cookies was first announced. Third-party cookies are used to track individual consumers across every website they visit, sometimes producing an intrusive atmosphere for the average consumer.

Privacy advocates have cheered the end of the third-party cookie, but companies that advertise online have been left scrambling for a replacement strategy. AdMedia, a company from Los Angeles, CA, with more than 20 years of digital ad experience, explains why third-party cookies are on their way out and share how Contextual Targeting Advertising can replace them for effective ad placement.

How Third-Party Cookies Work

A cookie is a text file with a small piece of data, like a user’s name and password, that can be used to identify your machine as you use a computer network. Specific types of cookies known as HTTP cookies or Internet cookies identify a specific user. They were introduced because they were thought to improve the web browsing experience by serving relevant and targeted ads and saving the user’s information for their next visit.

There are two main types of HTTP cookies: session cookies, used only when navigating through a website, and persistent cookies, which remain in the user’s browser indefinitely. Third-party providers use the persistent cookie. These cookies authenticate users and track multiple visits to a website over time.

The trick presented by the third-party cookie is that the cookie travels with the user wherever they go online. This means that their entire web browsing experience can be personalized, which can be a double-edged sword. Services like Login with Facebook use this system to allow users to store their information and use it across multiple websites. This can be convenient for the consumer. However, third-party cookies can also be used to build an identifiable data profile of each web user. Many privacy advocates have circulated warnings about these cookies, motivating web browser creators to phase them out.

Third-party cookies can produce intrusive advertising that follows people everywhere they go online. For example, if a user places a scented candle in their Amazon shopping cart, they will suddenly see ads for scented candles wherever they go. Some of these ads will be from Amazon, but many more will be from other websites. Privacy advocates and savvy consumers find this tracking creepy in some cases.

The Influence of GDPR in the European Union and Around the World

One of the major reasons third-party cookies are being phased out is the passage of the European law called GDPR (General Data Protection Regulation). GDPR is a legal framework setting guidelines for the processing of personal information belonging to EU residents.

Passed in 2016 and going into effect in 2018, the protocol must be observed by all websites that attract a European audience, even if they are based in other countries. The passage of GDPR is responsible for the ubiquitous banner ads at the bottom of nearly every website, where the website discloses that it collects cookies.

One of the major requirements of the GDPR rule is that all personally identifiable information collected by a cookie must be made anonymous or associated with a pseudonym. Privacy advocates called for this regulation to be put in place.

Google’s Role in Eliminating Third-Party Cookies

Google’s leadership in the online advertising sector has led them to dictate the terms of the demise of the third-party cookie. Their ads will remain relevant because they will shift to a system using first-party cookies coupled with contextual advertising. Their tracking is primarily put into place due to customers’ activities on their websites, so the prohibition against third-party cookies will not hurt their revenues.

However, sites like Doubleclick and other third-party cookie specialists will have to find new ways to target customers for serving advertisements online.

The Rebirth of Contextual Targeting Advertising

Third-party cookies foster a type of ad targeting known as behavioral targeting. Through third-party cookies, ad placement can easily be pushed across the Internet and surround a user with information based on their recent and historical activity. This type of advertising was undoubtedly beneficial before the phaseout of third-party cookies began. However, it is associated with damage to consumer privacy.

Contextual targeting is far less intrusive and is viewed in a more positive light by Internet users. Contextual targeting companies like AdMedia can extract information from the websites where the ads will be placed that helps determine which types are best for their visitors.

Contextual Targeting Advertising combines the use of first-party cookies or cookies that originate on the site where the ad will be placed with information drawn from the website itself. The types of information that contextual targeting focuses on include images and text. Keywords and key phrases are also used.

Contextual targeting is useful because it allows companies to serve their ads on websites with strong relationships to their products and services. For example, a hair salon’s website may serve ads for hairbrushes and other grooming products. A grocery store’s website will be able to serve ads for individual products.

Managing the Transition

Online advertising firms with expertise in Contextual Targeting Advertising can create robust strategies for websites that need to change the angle of their campaigns. The company can produce a seamless union of ad content and web page content through a thorough analysis of their website and the sites where ads should be placed.

Adapting to a Post-Third-Party Cookie World

If your company has relied on third-party cookies in the past, it is time to begin thinking about changing your online advertising strategy. Working with a specialist firm like AdMedia can help your company optimize its advertisements and ensure that you get through to every visitor who may buy from your site.

 

By Melissa Johnson

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