The Cookieless Future: Challenges and Opportunities

Cookies are an important part of marketing. They are used to collect information on possible online customer behaviors, from searches, purchase history, the chosen payment methods and other preferences, to even every single click.

However, a change has come. While users are now drawing more attention to their privacy, companies have to accept their demands and adapt to the new approach. Users’ demands are supported by government laws that regulate companies' activities. This leads to a limitation in data collection and processing.

What will the cookieless future look like?

Why are cookies so important nowadays?

Cookies are a tool for providing a personalized user experience. They are used to collect information such as: 

• A user's browsing history 
• Purchasing behavior
• Device usage
• The entire online shopping process

This information is used to optimize marketing strategies and improve website functionality, which translates into generating even more profit. Now, due to privacy concerns, their use must be regulated. Government regulations such as the General Data Protection Regulation (GDPR) are meant to take care of citizens' data privacy, which also affects the use of cookies. 

What is more, the technology does not always bring the expected results. Targeting advertisements based on the data gathered with the use of third-party cookies (which are the cookies saved on a user's device by a different website or domain than the one they're currently on) does not always work properly. In many cases, it leads to customers receiving ads only after they have bought a particular product. 

We can also observe the phenomenon of hypertargeting, which is when marketers target a given advertisement to a very specific niche, which theoretically is most likely to buy the product, but ends up leaving out many other potential customers.

What does a cookieless future mean?

A cookieless future does not result in the complete abandonment of cookies and the gathering of users' data. The restrictions will only apply to third-party cookies, that is, data from external sources and collected by third-party providers.

When are cookies going away?

The abandonment of third-party cookies was announced a long time ago and was scheduled to take place in 2020, but the process has been delayed and the change is expected to be implemented by the end of 2024.

No matter what the future will bring, the marketing and advertising industry must still be data-driven and rely on data analysis. This means that collecting information will still be a widely used practice. However, it must both be efficient and effective on the one hand, and ethical on the other. How can brands achieve this?

A cookieless future requires a completely new approach that puts a priority on the transparent use of data. This is an opportunity to improve existing targeting methods and achieve a more customer-centric approach. The solution is to turn to zero-party and first-party data, that is, data collected directly from users in various ways.

Are all cookies going away in 2024?

The change in the use of cookies coming in 2024 will apply only to third-party cookies. Websites will still be utilizing other cookies (zero and first-party data) which do not fall under the same privacy concerns that block third-party cookies, will remain in use. Instead of analyzing third-party data, new approaches and technologies such as contextual advertising may emerge. Also, a new AI-based data analysis systems that provide users anonymity may be developed.

The complete elimination of cookies is rather unlikely. 

Currently, the main goal of marketers should be to embrace privacy conscious practices. Sites will use these files, but with a more pro-consumer and transparent approach that respects not only regulations, but also the dignity and independence of the user.

The importance of zero and first-party data

As a result of the upcoming change, companies have to increase their use of first-party and zero-party data. 

• First-party data is information collected for a company about its users, such as passwords and their preferences.
• Zero-party data is information that customers independently and actively provide to the company, for instance, in forms, surveys as well as in direct conversations. 

In a cookieless digital world, this type of data is gaining particular importance, as previous, conventional methods of collecting data will no longer be effective.

The transformation into cookieless future leads to a shift in the approach to consumer consent - marketers need to build healthy relationships based on trust. 

They also need to focus on providing value in exchange for received data. Customers should feel that the data collected has a purpose not only for the company, but also for themselves. What benefit will it bring to the customer if they voluntarily share their data with the company? By sharing their data, customers can, for example, receive personalized product recommendations and exclusive offers, enhancing their shopping experience.

Should we be worried about the cookieless future?

Finding your way in the new reality that is the digital marketing landscape is not easy and requires creativity. The most important thing is to recognize the difference between advertising and marketing, that is being able to create narratives, stories, and content that is both useful to users and that they can identify with.

How do we deal with a cookieless future?

To cope with the challenges of a cookieless future, companies should better utilize methods of gathering data that engage customers, such as surveys, forms, satisfaction polls, and interactions through loyalty programs. These channels not only provide valuable zero-party data but also offer powerful reasons to implement forms and surveys.

Transparency in collecting and processing customer data is equally important - there is no place for questionable practices when it comes to tracking user behavior and data use. This translates into building deeper relationships with customers, as their loyalty to brands increases with those that make the effort to develop a connection. 

What else should you expect?

Before a cookieless future becomes a cookieless present, marketers and ad tech companies should prepare for disruption and temporary chaos. They have to change strategies and approaches, as well as rethink new ways of working with data and measuring the effectiveness of ads. The main goal is to create a personal and customer centric approach to digital advertising that makes the user and their needs more important than just utilizing marketing tools and techniques.

What is the alternative to third-party cookies?

The shift away from third-party cookies makes it necessary to focus on new methods of data acquisition and analysis. How can you utilize AI in data driven, targeted marketing campaigns?

• Contextual targeting - placing ads on pages and other places relevant to the products. AI enables analyzation and a better understanding of the context of content, so a product’s targeted ads can be matched to the real message on the page, not just the embedded keywords.
• Predictive analysis - deeper analysis of users' data, patterns and behavior can be used to prepare a more accurately personalized message for them. This makes it possible to provide relevant messages without sacrificing their privacy.
• Natural Language Processing (NLP): processing the language that customers use gives marketers the ability to identify their true emotions and feelings. What kind of behavioral data can be analyzed? Various types of feedback, such as social media conversations and comments, reviews and direct messages can all be leveraged. This helps in recognizing customers' true emotions and perception of the brand.

A Cookieless future - a change we don’t have to be afraid of

A cookieless future changes the approach to digital marketing everywhere. Although the vision of the future seems challenging and uncertain, there is no reason to be afraid. The approach to gathering data is becoming more ethical and, as a result, relationships are becoming deeper and marketing content more authentic. Without third-party cookies, marketers have to discover other ways to reach customers and concentrate, for instance, on creating value, narratives and interesting content, instead of just selling.

Rather than bulk data harvesting, we should focus on a customer centric approach. It is essential to both collect data directly from the user themselves and provide them with value that appeals to them.

The use of AI will also increase, which will help in analyzing the collected data and improve our understanding of customer behavior. This will make it easier to implement targeted advertising and deliver personalized messages without violating user's privacy.