User Tracking: Google Won’t Support Alternative Solutions to 3rd Party Cookies

Google’s latest announcement saying that after the removal of third-party cookies in Chrome, set for early 2022, they won’t allow any kind of user tracking, has stunned the Digital Marketing industry. Now the discussion has opened – Advertisers, Publishers and Data Brokers are looking for the alternatives to the alternatives they already have figured out (like Unified IDs or email addresses), while some players openly call Google’s move anticompetitive (sounds like another antitrust probe coming soon?).

Let’s wrap it all up and thoroughly review how the post-cookie Internet will look according to what we know right now.

Google’s is charting a course towards a more privacy-first web – as announced on March 3, 2021.

In early 2020 Google announced that they would stop the use of third-party cookies in Chrome before 2022, joining a growing list of browsers choosing to ditch the tracking technology.

Although Chrome isn’t the first browser which has decided to block 3rd party cookies, nevertheless it is definitely the biggest one with more than 60% share of the market among all Internet browsers.

Source: StatCounter Global Stats – Browser Market Share

The general understanding was that the end of third-party cookies won’t mean the end of tracking – and that the need for true end-user consent to process personal data will persist long after third-party cookies, and the technologies that will replace them.

However on March 3, 2021 Google announced that once third-party cookies are phased out, they will not build alternate identifiers to track individuals as they browse across the web, nor will they use them in Google’s products – even if this means giving the competitive advantage to other providers who allow any way of tracking user identity. 

In the cookieless future, Google wants ad targeting, measurement and fraud prevention to happen according to the standards set by its Privacy Sandbox, whereby cookies are replaced by five application programming interfaces. Advertisers will use each API to receive aggregated data about issues like conversion (how well their ads performed) and attribution (which entity is credited, say, for a purchase). Privacy Sandbox represents an alternative pathway that Google is providing for the ad industry to take; relying on anonymized signals (that are not cookies) within a person’s Chrome browser so as to profit from that user’s browsing habits.

The solution presented by Google is the privacy-preserving APIs called Federal Learning of Cohorts. FLoC uses machine learning algorithms that run on the device so as to group people into audience segments based on behavior such as browser history. The idea is to improve privacy by letting advertiser target groups (or “FLoCs”) of users based on common interests, rather than using a pseudonymous identifier for each individual user.

To capture the key differences, let’s review the User Identification process as we know it.

User Tracking in Digital Advertising – status quo

Google’s announcement has heated the discussion about the cookieless future. As The Programmatic University’s Founder Wayne Blodwell noted in his LinkedIn post: “This is huge! Any company which is involved in facilitating a match between datasets (think Unified ID 2.0, companies that rely on email addresses/first-party cookies etc.), will be unable to operate in the way they do today and are exceptionally challenged in how they operate in future”.

This is huge! Any company which is involved in facilitating a match between datasets (think Unified ID 2.0, companies that rely on email addresses/first-party cookies etc.), will be unable to operate in the way they do today and are exceptionally challenged in how they operate in future

Wayne Blodwell, The Programmatic University

What does it really mean to identify a user?

An identifier is a means of consistently recognizing a specific entity as distinct from others across multiple interactions. In database terms, it is a “key” that enables users to look up an entity. In general, we want identifiers that are machine-readable, are unlikely to collide with each other, and are consistently available.

An “identity”, on the other hand, is more than just name recognition. It is considered to be an approximation of the entity; a collection of metadata describing the entity, one that enables platforms to perform various business transactions (interests, measurement, rights, etc.) related to that entity.

The process of identifying users heavily depends on the approach and goals which need to be achieved. It’s commonly known that all Internet interactions involve the use of identifiers. In all, there are three main types of identifiers:

Device ID – a unique identifier available across the different websites or applications (cross – domain) visited on a given device.

User ID  – an identifier connecting various Device IDs together to provide a cross-device view of a person.

Customer ID – identifier enabling the reconciliation of a customer’s online with offline identification information.

Right now the companies such as LiveRamp, LiveIntent, InfoSum, Optable or Zeotap are working on universal ID and privacy by way of design solutions, which provide a shared identity for users across the supply chain without the use of cookies.

On the other hand, Permutive, mParticle, Qwarry, AirGrid or Illuma are working on Customer Data Platform and contextual targeting solutions, which will allow for hyper-personalized advertising by using key-words, selected topics, location, browsing habits, and many other factors. This can be accomplished using first party data.

A popular approach to identifying for the open internet is represented by the Unified ID 2.0 solution. The main goal of Unified ID 2.0 is to create a standard identifier for the ad industry using hashed emails as a replacement to third-party cookies.

What should Digital Publishers do in the light of the news brought by Google?
Best practices.

· Create an appropriate exchange of value between users, ensuring them high-quality content, optimal ad density and good UX. Over time, they should feel comfortable enough to create an account and log in with your personal details;

· Work on the diversification of income sources apart from advertising;

· Use already-owned user segments;

· Implement the most valuable Unified IDs and verify their impact on the results;

· Consider participation in market aliases (like NetID) if there are available in your market;

· Observe the market, test and learn about new trends and popular solutions;

· Listen to your clients: whatever you invent, it should have a demand on the market. The more you listen, the better your decision-making will be;

· Use your partnerships with advertisers, agencies and tech vendors;

· Verify your assumptions;

· Don’t be afraid of mistakes.

How does User Tracking 3rd-Party Cookies work?

The term “cookie” was coined by the web-browser programmer Lou Montulli, who took the terms from “magic cookie”, which is the packet of data which a program receives and sends back unchanged, used by UNIX programmers. Its main function was to remember the user’s browsing activity in order to improve their experience on the web and it’s still used today.

There exist 2 types: first-party (1PC) and third-party cookies (3PC).

First-party are generated and stored by the website you are visiting directly (remembering language settings, passwords, shopping carts, game scores etc.)

Third-party cookies are created by websites outside of the website you are visiting (cross-site tracking collects data where you’ve been and what you’ve done; whereas retargeting shows you products you previously looked at, ad-serving for ads that are in-line with your interests, other third-party services provided to website owners)

Fun fact: cookies can have an expiration date. Approximately 40% of cookies live for less than one day.

The main differences between 1st-Party Cookie and 3rd-Party Cookie

First-party cookies are usually set by the internet server of the Publisher (website owner) or by using any JS script uploaded on the webpage. Third-party cookies may be set by the external server; for instance, which is in the property of the ads demand vendor uploading code on the Publisher’s website.

First-party cookies are available only for the domain which has them set. Third-party cookies are available across every domain/website, which loads third-party server codes.

First-party cookies is compatible with all browsers and might be blocked or disabled by the user. However cookie files from third-party vendors are also compatible with all browsers; unless they have been blocked by the default.

What’s next for the User Tracking?

Google’s latest decision has created a lot of uncertainty for those working in the Digital Advertising industry. Still, it is getting more and more clear that the true winners in the cookieless world will be those players who focus on creating a user-friendly environment, respecting the fact that people no longer want to feel tracked as they do now.

“72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies” is an impactful quote from Google’s announcement and the fact that we can easily exchange “feel” with “fear” is something that should really speak to the minds of all Digital Advertisers and Publishers.

Considering the scale of the Digital Advertising industry, which exceeds $100 bln per year on a global scale, we hope that despite the current uncertainty, in the long term it will be possible to minimize losses by learning-as-you-go approaches and by using the services of reliable suppliers.