Aug 10, 2021

Next Steps for Brands in the “Age of Warring States” After Cookies

The use of third-party cookies will no longer be supported by Google by the end of 2023. While browsing on the web, consumers will no longer be tracked by ads wherever they go. This news has laid a bombshell in the tech industry, where affected brands have begun scrambling for suitable alternatives. Most companies, however, have not yet found plausible options.

According to an investigative report by Integral Ad Science (IAS) early this year, 61 percent of professionals in the digital industry believe that the elimination of third-party cookies is the most important digital news of 2021.  76 percent believe the change will accelerate the development of advertising technologies and innovations in web technology. 5xRuby co-founder Tsehau Chao said: “We have entered a post-cookies ‘Age of Warring States’, during which a flurry of advertising and network technologies will contend with each other, while brands wait to see which will emerge as the leader of the new era.”

The elimination of third-party cookies began brewing last year. 

The scheduled departure of cookies is considered a major event in the digital industry. Various brands have relied heavily on the third-party cookie service provided by Google, “such as understanding the web-visitor profile through Google Analytics, and capturing the buying habits of web users where the identity of individuals can be deciphered for the most part.” 5xRuby Technology Director Qiu Zheng Xian (pen name: Aotoki Tsuruya, hereinafter referred to as Aotoki) stated that most of the services provided by advertising technology companies are built on top of cookies to carry out precision marketing for brands and reach sales objectives. Gradually, however, consumers began to detest being traced, considering it an invasion of privacy and even a breach of personal data security. The result was the enactment of General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA). Nearly half (44%) of the people in Japan also became aware of the importance of strengthening privacy protection. Thus, the Japanese government revised the Act on the Protection of Personal Information in June last year, to enforce full protection for the privacy of netizens.

Aotoki said: “Currently, most consumers still use Google to browse the web. The discontinuation of cookies will greatly impact various brands, which are advised to plan ahead before Google officially disables third-party cookies.” Numerous advertising technology companies are currently developing appropriate proprietary technology in response to the Cookie-free Age. For example, a third-party technology tool, Fingerprint, generates a set of unique ID using fingerprint recognition web devices, which allows a brand to track the ID while protecting user data security. In addition, major corporations such as the sports brand Nike and tourism booking brand Trip have been using their own website-visitor data for the most suitable marketing of online services.

Brands bear the brunt of the impact of the 3rd-party cookie discontinuance

5xRuby co-founder Mu-Fan Teng believes that the most intuitive impact is that it is no longer possible to obtain user data and track usage behavior when users do not login or actively provide personal data, effectively breaking the connection between brands and website visitors. The second factor is the inability to place ads targeting anonymous users or a designated group. “This is the most common method of online advertising!” Teng said. Without a designated advertising target, the cost of ads will be affected, which may become higher, or revert back to the era of TV advertising.

Google is reportedly testing a replacement technology, Federated Learning of Cohort (FLoC), dividing netizens into different “groups” based on their browsing history in order to protect their privacy.  But, the plan is not yet confirmed.  The Brave Browser, which values cyber data protection, believes that the practice of “group classification” based on the users’ browsing history without their permission is considered an invasion of privacy. Amid the upcoming chaos, Mu-Fan Teng advises customers to return to thinking about the brand itself, and seek other ways to continue learning about their target audiences, including the following four methods:

Four Things to Start Doing to Usher in the Cookie-Free Age

1. Establish Your Own Data Assets

To reduce the cost of advertising, entice website visitors to voluntarily leave their data, whether via the company website, e-commerce, or a promotional campaign. According to a survey conducted by the U.S. coupon website RetailMeNot, 70 percent of the people placed more value on discounts during the pandemic period compared to the past. Promotional campaigns or good prices can help gather user data by enticing consumers to register and become members. Of course, a good website design is a real plus.

2. Adopt Effective Technical Support

Since third-party services will have more difficulty storing and accessing cookies, e-commerce brands need to formulate their own customer tracking systems, and rely on different types of tools to continue gathering customer information, such as establishing their own chat mechanisms or chatbots. Another recommendation is the implementation of links to social platform services, such as using the Facebook Conversions API, to become free of the limitations of cookies. By carefully recording the users’ path of visitation, it is also possible to reach a certain degree of data accuracy.

3. Update and Optimize Website Services

When cookies cease to be the most important consideration for brands, they will have to reexamine and update their own website technology services. When it is technically impossible to perform precise delivery of ads, the importance of display ads also drops. The content of online advertisements that the brands present to consumers must exert greater impact, and how to offer online services with flexibility becomes the key.

4. Redistribution of Ad Placement Budgets

Changes in digital tools inevitably affect the annual budget planning of each brand. Unaffected by the policy on cookies, platforms such as Facebook or Instagram may continue to deliver individualized advertising. Therefore, brands are advised to re-establish strategies and change budget allocations to more effectively spend time and energy.

In an age of turbulence due to the new cookies policy, brands must prepare to shift their strategies and get ready for the future.

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