What the U-Turn on Third-Party Cookies Means for Online Businesses
For years, the digital marketing industry has been bracing for the eventual phase-out of third-party cookies—a tool that has been integral to online advertising for over a decade. These cookies allow advertisers to track users across different websites and deliver highly targeted ads based on their browsing behaviors. In 2020, Google announced its plan to phase out third-party cookies from its Chrome browser, with the initial deadline set for 2022. However, after multiple delays, Google has now set a new deadline, aiming to deprecate third-party cookies by early 2025.
This delay gives online businesses additional time to prepare for a major shift in how they collect and use data for advertising. But with this extension, there are new questions and opportunities for businesses to adapt their strategies before the change becomes permanent. In this article, we’ll explore what this U-turn on third-party cookies means for online businesses, how it impacts advertising strategies, and how businesses should prepare for a future without cookies.
What Are Third-Party Cookies?
To fully understand the impact of the impending change, it’s essential to first understand what third-party cookies are and why they’ve been so important for online advertising.
A cookie is a small text file that a website stores on a user’s device to remember certain information about their visit. Cookies can be used for a variety of purposes, such as remembering login credentials, language preferences, or items in a shopping cart.
There are two main types of cookies:
- First-party cookies: These are created by the website a user is visiting. They are typically used to enhance the user experience on that specific site, such as remembering user preferences or login details.
- Third-party cookies: These are created by domains other than the website the user is visiting. Advertisers use them to track users’ behavior across multiple websites, enabling personalized ads, retargeting, and building detailed user profiles.
For years, third-party cookies have been a critical tool for advertisers, allowing them to track user behavior across the web and deliver ads that are more relevant to individual users. However, growing concerns over privacy and data security have led to increasing pressure to phase out third-party cookies.
Why Google Planned to Phase Out Third-Party Cookies
The primary motivation for phasing out third-party cookies is the growing demand for greater privacy and transparency in how personal data is collected, used, and shared online. Several factors have contributed to this shift:
1. Consumer Privacy Concerns
Over the past few years, consumers have become more aware of how their personal data is being collected and used by advertisers. High-profile data breaches, along with growing media attention on privacy issues, have led to increased discomfort among users about being tracked online without their explicit consent.
2. Legislative Pressure
Governments and regulatory bodies have responded to these privacy concerns with stronger data protection laws. Regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the U.S. have established strict rules on how businesses can collect, store, and process personal data. These laws emphasize transparency, user consent, and the right to opt out of data collection—placing more pressure on tech companies to change their data practices.
3. Browser Competition
Google’s competitors in the browser space, such as Safari (Apple) and Firefox (Mozilla), had already taken steps to block or restrict third-party cookies well before Google’s initial announcement. Apple’s Safari introduced Intelligent Tracking Prevention (ITP) in 2017, which limited cross-site tracking, and Firefox followed with Enhanced Tracking Protection (ETP), which blocks third-party cookies by default. Google’s Chrome, which controls more than 60% of the global browser market, lagged behind but finally announced its intent to follow suit.
Google’s U-Turn: Why the Deadline Was Delayed to 2025
Initially, Google set the phase-out deadline for 2022, but after multiple delays, the deprecation of third-party cookies has now been pushed to early 2025. This U-turn has been met with a mixture of relief and uncertainty. While the extension gives the industry more time to prepare, it also raises questions about why the transition has been so delayed.
1. Technical Challenges
One of the biggest reasons for the delay is the complexity of finding an effective replacement for third-party cookies. Google has been working on its Privacy Sandbox, a set of tools aimed at balancing user privacy with the needs of advertisers. The goal is to develop privacy-preserving alternatives to cookies that still allow for ad targeting and measurement without tracking individual users across the web.
Early proposals, such as the Federated Learning of Cohorts (FLoC), received significant criticism from privacy advocates who argued that the technology could still enable profiling. As a result, Google has shifted its focus to the Topics API, which assigns users to interest-based categories (topics) based on their browsing history. However, this new approach is still being tested, and Google needs more time to ensure these solutions work effectively at scale.
2. Industry Pushback
The advertising industry, particularly small and medium-sized businesses (SMBs), have expressed concerns over the lack of viable alternatives to third-party cookies. Many businesses depend on these cookies to drive targeted advertising campaigns, retarget users, and measure the effectiveness of their marketing efforts.
The delay to 2025 allows more time for businesses to adapt and for the advertising ecosystem to develop new solutions that can maintain the effectiveness of digital advertising without compromising user privacy.
What the U-Turn Means for Online Businesses
Google’s decision to delay the phase-out of third-party cookies until early 2025 offers businesses more time to adjust, but the industry must still prepare for an eventual transition. Here’s what this U-turn means for online businesses and how they can use the extra time to prepare for a cookie-less future.
1. Temporary Continuity, but Prepare for Change
In the short term, businesses can continue using third-party cookies for their advertising and marketing efforts. However, this delay should not be seen as a reason to avoid preparation. The eventual removal of third-party cookies is inevitable, and businesses that fail to adapt could be left behind.
Companies should take this opportunity to test alternative methods, such as first-party data strategies and contextual advertising, to ensure they are prepared when the shift occurs in 2025.
2. Emphasize First-Party Data Collection
With third-party cookies on the way out, first-party data will become even more critical for businesses. First-party data refers to information that businesses collect directly from their users, such as through account sign-ups, email subscriptions, or purchase history. This data is more reliable, privacy-compliant, and valuable for building personalized marketing campaigns.
To prepare for a future without third-party cookies, businesses should focus on improving their ability to collect and leverage first-party data. This might include:
- Encouraging users to sign up for accounts or loyalty programs.
- Offering incentives for users to share their preferences or contact information.
- Creating personalized user experiences through first-party data rather than relying on third-party tracking.
3. Invest in Contextual Advertising
Without third-party cookies, contextual advertising is emerging as a viable alternative for targeting users. Unlike behavioral advertising, which relies on tracking users’ actions across websites, contextual advertising places ads based on the content of the webpage a user is currently viewing.
For example, a sportswear brand might place an ad for running shoes on a blog post about marathon training. Contextual advertising respects user privacy while still delivering relevant ads. Online businesses should explore platforms that support contextual advertising and begin testing strategies to ensure they are ready for the transition.
4. Adopt Privacy-First Technologies
The delay to 2025 provides time for the development and adoption of privacy-first ad technologies, such as Google’s Privacy Sandbox. These technologies aim to provide advertisers with tools for ad targeting and measurement that do not rely on tracking individual users across the web.
Some promising solutions include:
- Topics API: Grouping users into interest-based categories based on their browsing history, without storing individual identifiers.
- FLEDGE: A proposal for serving remarketing ads without third-party cookies, using privacy-preserving mechanisms.
- First-party identity solutions: Businesses can create unified customer profiles using first-party data, allowing for personalized marketing without the need for third-party tracking.
Online businesses should begin experimenting with these tools as they become available to ensure they are well-positioned when third-party cookies are finally deprecated.
5. Embrace Transparency and Trust
With privacy at the forefront of the digital landscape, businesses must build trust with their users by adopting transparent data practices. This means being upfront about how data is collected, stored, and used, and giving users more control over their personal information.
By offering users clear opt-in options, explaining the benefits of sharing data, and demonstrating a commitment to privacy, businesses can foster long-term customer loyalty and enhance their brand reputation in a cookie-less world.
Preparing for the Future Without Third-Party Cookies
While Google’s decision to delay the deprecation of third-party cookies until 2025 provides online businesses with extra time, it also highlights the urgency of preparing for a future without these tools. The advertising industry is undergoing a significant transformation, with user privacy taking center stage.
To thrive in this new environment, businesses must focus on building robust first-party data strategies, investing in privacy-first technologies, and adopting contextual advertising. By embracing these changes now, companies can stay ahead of the curve, continue delivering personalized experiences, and ensure long-term success in a post-cookie world.
