By Vlad Gozman, a serial entrepreneur and the founder & CEO of involve.me. Follow @vladgozman on Twitter.
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In 1992, Netscape made history by inventing the cookie, enabling websites to remember user information and preferences. This simple invention sparked the digital advertising revolution, and cookies quickly became the lifeblood of the online ecosystem. Today, the digital advertising industry is worth over $600 billion, and cookies are responsible for a large part of that.
But the cookie is dying. In response to user privacy concerns, Apple, Google and Mozilla have all announced plans to phase out support for third-party cookies in their web browsers. This will have a profound impact on the digital advertising ecosystem and could lead to the slow death of the cookie.
The loss of third-party cookies will make it much harder for advertisers to track users across the web and serve them targeted ads. This will lead to less effective advertising and could reduce the overall size of the digital advertising industry. In addition, the loss of cookies will make it harder for publishers to monetize their websites, as they will no longer be able to sell targeted advertising.
This could lead to a decline in the quality of online content, as publishers move to other forms of monetization such as subscriptions or paywalls. So why are cookies coming to an end?
Privacy Concerns
From Edward Snowden’s revelations about government surveillance to the Cambridge Analytica scandal, there is a growing mistrust of Big Tech and its handling of personal data.
These concerns have even created a niche of privacy-preserving products, such as the Brave web browser, which blocks third-party cookies and other tracking technologies by default. Further, DuckDuckGo, a search engine that doesn’t track users, has seen its market share grow in recent years as privacy-conscious users flock to it.
In addition, privacy regulations such as the General Data Protection Regulation and the California Consumer Privacy Act are making it harder for companies to collect and use personal data. These regulations could have a chilling effect on the cookie ecosystem, as they make it more costly and risky for companies to collect and use data.
The writing is on the wall for the cookie. In response to user privacy concerns, and in compliance with new regulations, browsers are phasing out support for third-party cookies.
How Businesses Can Adapt With Zero-Party Data
Cookies are often seen as a non-negotiable part of the digital advertising ecosystem, but that doesn’t have to be the case. In fact, cookies are not necessary for online advertising.
There is an alternative to cookies called “zero-party data.” Zero-party data is data that is voluntarily shared by users with businesses. This data can include things like preferences, interests and contact information. Zero-party data is collected directly from users, typically through interactive data collection methods such as surveys, polls and quizzes.
Zero-party data is more valuable to businesses than cookies because it is more accurate, specific and reliable. In addition, zero-party data is collected with the user’s consent, so there are no privacy concerns.
Making The Shift Away From Cookies
Businesses that rely on cookies for digital advertising will need to make the shift to zero-party data if they want to stay relevant in the post-cookie world. After all, millions of internet users are now using ad blockers, which block cookies and other tracking technologies.
Additionally, new browser features such as Safari’s Intelligent Tracking Prevention and Firefox’s Enhanced Tracking Protection are making it harder for businesses to track users with cookies. And, as mentioned earlier, major browsers are phasing out support for third-party cookies altogether.
The good news is that there are other ways to collect data on your website visitors and customers. One tip is to create engaging surveys that let customers express their preferences. You can also offer incentives, such as discounts or free shipping, in exchange for customer data. For instance, an e-commerce store selling clothes might create a style quiz that collects data on customers’ size, color and pattern preferences.
Another tip is to use interactive calculators whenever possible. For example, a home improvement store could offer a calculator that helps customers estimate the cost of their project. This type of tool collects data on the specific needs of each customer, which can be used to create targeted marketing campaigns.
The Future Of Digital Advertising
Digital advertising is at a crossroads. Cookies have long been the foundation of the online ecosystem, but they are no longer viable due to privacy concerns and browser changes. Businesses that want to stay relevant in the digital world need to make the shift to zero-party data.
Zero-party data is more accurate, reliable and privacy-friendly than cookies. It is also becoming increasingly necessary as browsers phase out support for third-party cookies. Businesses that don’t make the switch to zero-party data will likely be left behind in the post-cookie world.
