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Cookies and Data in 2023 - what's changing?

FAQs about First and Third-Party Data, and Cookies

First-Party Data... Third-Party Data... Cookies... it can all be confusing.

A lot of people hear that "Third-Party Cookies" are going away on Google... and immediately think that all Third-Party Data targeting is going away. That's not true. Third-Party Data will continue to be a BIG part of Digital Advertising.

In fact, cookies aren't going away all together either -- first-party cookies will still remain to track visitor behaviors.

Here are a few questions we get asked most about the difference in the upcoming changes:

1. How Can You Show Ads to Your Previous Customers (First-Party Data) and People Who Look Like Them?

When it comes to first party data (data that you provide on your customers), we can do all kinds of targeted first party campaigns. Our Custom Audience Matching is all first party data that uses your database to serve ads on products like Display, Native, Social Mirror OTT, and Video Pre-Roll.

Matching: We target your list with cookie-less data. We match first-party data -- whether it’s phone numbers, names, emails, physical addresses, domain URLs, mobile device ids, wifi addresses, etc -- and compare it to offline data (like census and income data) and location data (mapping people from a business location to a home address) to determine who a person is and what their characteristics are.

Look-Alike Targeting: Now that we’ve matched your list, we can also build a new list of people who “look like” those customers who have already shopped with you. Lookalike audiences are then built within the campaign’s defined geography – so if you are targeting a 20 mile radius of your physical store, lookalike will stay within that. Lookalike is built based on the profile of a matched audience. Predictive is built through automated modeling using a genetic algorithm and machine learning to score everyone in the list, based on how closely they match the core audience.

2. What's the Difference in First-Party and Third-Party Cookies?

First party cookies are tracking pixels (code) that have information about a website visitor that is used by the website (or app) that the user is on.

  • For example, filling in your username and password automatically because you’ve told the website to save your login uses a 1st party cookie. A website publisher can still collect behavioral data about its users, like what they click on, what content they engage with, etc., but the website publisher (or app) can’t share it with other companies without the users’ consent (like clicking on a button that asks you to allow cookie tracking).

  • These types of cookies are not going away; they’re here to stay.

Third party cookies are tracking pixels (code) that has information about a website visitor that is then shared with another company (not the company that owns that website).

  • For example, retargeting and conversion tracking uses 3rd party cookies. Some products that we are offer like LinkedIn, Mobile Conquesting, OTT with On-Site Visit Tracking, Facebook & Instagram, and Amazon Targeting (display, video and OTT) all use first party data where each of those companies has collected information about their users.

When it comes to third party data, we integrate with top third-party data providers like BlueKai, Eyeota, Factual, Lotame, and Oracle, so almost any audience we want to target is available to us through these data provider companies. This data is layered over the ad inventory we bid on through the ad exchanges.

Ad Exchanges is a technology platform that works with publishers and ad networks and purchases their impressions to then sell them to advertisers. Advertisers can purchase directly from an ad exchange, or access ad exchanges through a Demand Side Platform (DSP). So what is a Demand Side Platform? That is a technology platform that allows buyers to manage, purchase and optimize programmatic inventory from multiple ad exchanges and Supply Side Platforms (SSP) through one interface. Inventory can be purchased through real-time bidding or programmatic direct deals which are direct deals between ad sellers and ad buyers. A Supply Side Platform is a technology platform that allows publishers (websites and apps) to manage and sell programmatic inventory for advertisers to bid on. Supply Side Platforms connect to multiple ad exchanges and DSPs at once to maximize the opportunity to sell inventory.

3. If Third-Party Cookies Are Going Away, What Does That Mean For Digital Advertising?

Don’t panic. Cookies are not the only way to target your next customer.

Google has announced that Third-Party Cookies are going away several times now, and most recently moved that deadline back 2 years now .

Rest assured that tech companies have been working together on solutions.

In fact, Google is only one of the ad exchanges that we use – we use dozens of DSPs (Demand Side Platforms) – also called Ad Exchanges, so cookies going away only affects the impressions that run on the Google platform. All of the other DSPs and Ad Exchanges that we use have said that they will address this phase out of cookies by using 3 solutions that are currently in development to track people, for example, by their email addresses.

As an example, Unified ID 2.0 is an initiative that some top ad-tech firms are working on together, that would rely on email addresses that are hashed and encrypted from consumers who give their consent. LiveRamp has what it calls “Authenticated Traffic Solution,” which it says involves consumers opting in to gain control of their data, and on the other side, brands and publishers being able to use that data.

But what are the big companies doing?

Google’s solution:

Google’s plan to phase out third-party cookies in Chrome is part of a larger strategy of creating a “Privacy Sandbox” with open standards for tracking users while protecting their privacy. Google launched its “Privacy Sandbox” initiative to find a solution that protects user privacy and lets content remain freely available on the open web.

Being tested by Google are several cookie replacement ideas:

  • First there was FLoC – which stands for “federated learning of co-horts.” The ideas was to place people into cohorts or buckets based on their browsing history – in other words, replacing the third-party cookie with a FLoC ID. This concept has now evolved into the Topics API.

  • Topics API, replaces FLoC and is in beta as of early 2022. It would allow companies to personalize ads based on a limited number of regularly updated content topics as determined by the browser. Topics API uses on-device machine learning. None of the data processing happens on an external server, including Google servers. But unlike FLoC, which generated a cluster ID to reflect a given Chrome user’s browsing patterns, the Topics API allows Chrome to determine up to five topics – think things like fitness, travel, books, team sports or rock music – that represent a person’s top interests for a certain week across participating websites. When someone visits a participating site, the Topics API picks three topics for targeting purposes – one topic from each of the past three weeks – and shares them with that site and its advertising partners to personalize ads to that person. Shared topics are persistent to a website and only remain active for three weeks. Then they’re deleted, and fresh topics are added in their place. The API supplies multiple topics so they can be combined (for example, targeting a book lover who is also into fitness). While similar to contextual (keyword) targeting Topic API would be more specific. The Topics API could be used to target a fitness lover on a news site regardless of whether someone is reading about fitness.

  • FLEDGE, which stands for “first locally-executed decision over groups experiment,” is the Privacy Sandbox’s answer to Retargeting. The purpose is to allow remarketing to brand-specific cohorts of users without allowing third parties to track browsing behavior across sites.

  • The attribution reporting API or, more officially, the Core Attribution API, is meant to support view-through and click-through conversions.

So in essence, Topics would be for targeting, FLEDGE would be for Retargeting, Core Attribution is for measurement.

4. What Does Blocking 3rd Party Cookies and Being ITP Compliant Mean with Chrome, Firefox, and Safari?

Google Chrome will follow Apple Safari and Firefox with the eventual blocking of third-party cookies within the Google Chrome browser. Safari and Firefox have already made the move, but Google, in its desire to take a more measured approach, has determined it will phase out third-party cookies over a two-year period.

For context, Apple released Intelligent Tracking Prevention (ITP) in 2017 to protect user privacy by limiting the ability of marketers and online businesses to track users across domains via its Safari browser. ITP 2.1 raises the bar even higher, capping the lifetime of cookies set client-side to seven days, instead of the possible two years.

First-party vs third-party Cookies: It should be noted that the move away from third-party cookies by the three major web browsers does not mean an end to cookies. First-party cookies, those cookies that are placed on a person’s browser when they visit a website owned by a primary company or organization, will still be in place. Companies will be able to track visitor behavior (conversions) in terms of where they entered the site, how long they stayed, pages visited, and where they exited.

What’s being phased out are third-party cookies, those cookies that are used by advertisers to track visitor moves as they navigate to multiple sites. The third-party cookies enable advertising platforms, and the companies that use them, to build a comprehensive visitor profile – all based on their online activity.

Marketing attribution in a post-third-party-cookie world: The demise of third-party cookies will not mean the end of digital advertising and the ability to assign proper attribution to individuals engaging in various touchpoints along the buyer journey. Several entities are currently hashing out other methodologies brands can leverage to retrieve audience analytics.

There are three requirements to be ITP-compliant:

  • Cookies must be first-party (they cannot come from a third-party domain, such as an attribution firm) and should not be placed by the browser.

  • Destination URLs cannot contain any tracking parameters or fragment tags (no UTM codes!).

  • The site hosting the advertisement, and thereby referring customer traffic to a company site, can’t collect data for cross-domain tracking.

Another option that is being currently discussed as a way to gather audience data is the use of a unified ID solution, which would mean a universal ID that’s shared across demand-side platforms (DSP), supply-side platforms (SSP), and data management platforms (DMP).

In addition to alternative ways of assigning online attribution, offline attribution (i.e. On-site Visit Tracking) could also gain in prominence as a result of reduced third-party cookie use. Linking ad exposures to specific outcomes and having it done accurately could play a significant role in the future of marketing attribution.

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