Google’s decision to phase out third-party cookies: impact on Indian industries

Early last year, Google announced that it would phase out third-party cookies on Google Chrome, ushering in dramatic changes in the digital marketing space. Though Google has since decided to delay the deprecation until the end of 2023, the ‘cookie-less future’ is nevertheless certain.

To contextualise: third-party cookies help advertisers track user activity across their web travels in order to better target them with relevant ads. For example, consider customers who repeatedly choose to read about cultural apparel online. Using insights derived from third-party cookies, advertisers can personalise ads for those customers with information related to heritage jewellery and traditional clothing, and then push those ads on any web pages those customers visit in the future.

With the demise of third-party cookies, this level of addressability presents a real challenge to advertisers, marketers and publishers in India. Here’s a glimpse at what lies ahead.

1. Providing advertisers with a means of creating a privacy-safe digital identity

In response to the overwhelming concern around the deprecation of third-party cookies, Google announced in early 2021 that it would move from individual tracking to a solution referred to as Federated Learning of Cohorts (FLoC). It is a cohort-based solution for tracking.

In other words, tracking large groups of people with similar browsing habits, where members of each cohort remain supposedly anonymous. The objective with this move was to allay apprehensions among advertisers who can still track campaign effectiveness, albeit at a ‘crowd level’, while complying with new regulations around customer data privacy.

However, this creates a new challenge: advertisers need cohorts that are sufficiently large for the purposes of privacy, but still meaningful enough to enable accurate personalisation. This approach is also browser-specific and still up in the air in terms of the accuracy it can offer.

In this context, defining a privacy-safe digital identity will become a necessity for advertisers. This is where industries will see Mobile Ad Identifiers (MAIDs), which are mobile-based and more sustainable and efficient identifiers than cookies, take center stage​​. This will incentivise advertisers to address their in-app mobile challenges to drive better interactions and demand, considering about 90 per cent of Indian consumers use mobile devices to browse and purchase.

2. Looking towards first-party datasets as the goldmine for identification

Brands have essentially depended on hashed email/phone numbers with digital identifiers (mobile AdIDs, smart TV IDs and other digital device identifiers) to identify their customers. However, the deprecation of third-party cookies means that marketers will need to invest largely in building consented first-party datasets to continue executing their marketing strategies.

This is where we’ll see a larger adoption of Customer Data Platforms (CDPs). A CDP is a system of record for marketers that enables them to unify customer data from multiple sources into what is referred to as a ‘single customer view’, or ‘golden record’. This golden record gives marketers a comprehensive understanding of their customers’ behaviours, needs and preferences, and provides the starting point for effective personalisation across the marketing, sales and services functions.

But that’s just one part of the equation. The right CDP should also give marketers complete confidence that the data they are using is in compliance with privacy regulations, including GDPR, ePrivacy, CCPA and - for businesses marketing to consumers in India - the upcoming Personal Data Protection Bill (PDPB).

Ideally, marketers should also be able to use their CDP to master and orchestrate these consent preferences throughout the entire customer journey.

3. Freeing publishers from dependence on a single provider

Meanwhile, adtech providers will continue to develop universal, agnostic ID solutions to sidestep restrictions emerging in the wake of third-party cookie deprecation.

In an ideal world, an authentic, universal ID for every single player in the advertising industry would provide the missing link for the marketing ecosystem. However, this is an uphill task to say the least, as it requires massive industry alignments and complex technology integrations across the ecosystem.

In this scenario, vendors have about two years to develop their universal ID solution and secure enough partners to be able to maintain relevance in scale and offer a feasible industry alternative. Publishers will have an incentive to work with multiple universal ID solutions to avoid dependence on any one provider.

Meanwhile, it’s become a growing trend amongst publishers to start charging for content or requiring logins to access their content in order to capture valuable first-party data, such as phone and email details. Thus, a publisher’s first-party cookies will become a valuable digital currency to target their customers across different domains.

While the cookie-less future will force all web publishers, advertisers and marketers to seek alternative solutions to safeguarding addressability, it is fostering an ecosystem that better prioritises consumer privacy and trust. However, the clock is ticking - and it’s time for all parties to test, adopt and adapt before it’s too late.

(Projjol Banerjea is the co-founder and chief product officer of Zeotap.)