The End of 3rd Party Cookies & How E-Commerce Sellers Will Be Affected

Introduction

For over two decades, websites and internet marketers have relied on cookies to provide them with the data they need. Everything from logins to usage metrics is recorded using these small snippets of code, but now they’ll soon see their end. Major browsers are phasing out support for third-party cookies for privacy and security reasons, and new data privacy laws are requiring websites to comply with various regulations (such as adding a cookie policy to their e-commerce store).

Value of Third-Party Cookies in E-Commerce

Third-party cookies are very versatile. E-commerce sellers use such cookies to track visitors, improve user experience, and collect other data to refine audience targeting. If a website knows what the user likes, it can target advertisements specifically connected to that interest to increase conversions. Data privacy laws don’t explicitly ban third-party cookies though, as long as the website places a notification such as a cookie consent banner to ask for consent before using such cookies. Despite this, it’s best to start looking elsewhere to future-proof your marketing strategies.

A Cookieless Future

With the phasing out of third-party cookies, we’re looking at an essentially cookieless future. Google plans to drop third-party cookies from its browser by 2024. Companies are recognizing their users’ needs for more privacy, transparency, choice, and control over their personal data, even though it’s difficult when such companies thrive on collecting user data.

First-party cookies will still be with us for the foreseeable future because they serve many essential functions. These cookies will only be used for first-party session recording, account logins, shopping cart storage, and online billing in e-commerce, and won’t be of much use for advertising agencies that function across multiple websites.

How E-Commerce Sellers Will Be Impacted

E-commerce sellers now need to start looking at other methods to collect data to compensate for the loss of third-party cookies. Two key areas affected are behavior tracking and ad targeting.

Behavior Tracking

Every mouse click, hesitation, and dwell time metric helps e-commerce stores cater better to the customer’s needs and wants. Behaviors reveal a lot of information that can help in advertising and will still be a key area where data is gathered. Therefore, e-commerce stores will have to look at options such as linking unique advertising IDs to each customer when they’re logged in to track their behavior.

Ad Targeting

Ads are targeted using previous data that may reveal what a potential customer is interested in. Without third-party cookies linking a browser or device to a data profile, this becomes more difficult. Advertising IDs are an alternative here too, but a much better method is contextual advertising.

Bonus: Tips For Preparing Your E-Commerce Store

If you’re looking to drop third-party cookies, then take a look at some of these tips.

Stay Abreast of Data Privacy Law Changes to Maintain Regulatory Compliance

Ever since GDPR was implemented in the EU, many other jurisdictions are in the process of enforcing similar data privacy laws (consider CCPA and CPRA vs GDPR, CCPA vs PIPEDA, and CCPA vs LGPD). Therefore, e-commerce stores must stay updated on the data privacy laws of the jurisdictions they operate in to ensure compliance. Consulting a relevant expert and educating yourself by reading data privacy guides will help with strategizing.

Develop Targeting Strategies From First-Party Cookie Data

In terms of first-party vs third-party cookies, third-party cookie data was used so often because of how easy it was to access. Now, marketers will need to focus on building long-term relationships with their customers and learning more about them through different avenues, such as first-party cookie data. Using data from users that are visiting your website, you can develop targeting strategies that are privacy-friendly and effective at the same time.

Implement Keyword-Based Ad Campaigns (Contextual Targeting)

If someone is visiting a website about a specific topic, they’ll likely be interested in a related product or service, and a contextually targeted ad can be placed. Analyzing which ads work best can then guide your future strategies.

Enhance Your Social Media Presence

Using social media goes a long way to staying in touch with customers and gathering data. Posts that perform well can be converted into ads. Social media platforms offer many tools to businesses looking to expand their customer base as social media profiles provide rich data sources for targeted marketing.

Conclusion

Ever since GDPR and cookie consent first challenged e-commerce stores and third-party cookies edged nearer to the end of their lifecycle, Google has been working on alternatives that respect privacy but still help websites develop effective marketing strategies. Their first attempt, Federated Learning of Cohorts (FLoC), tried to sort users into groups of comparable interests, but FLoC soon failed. Now Google is exploring Topic API, a browser-based interest bank that shares certain topics a user is interested in with supported websites while still safeguarding privacy and keeping control in the users’ hands. Will Topics stick? We’ll have to wait and see. Until such a system is established, it’s best to future-proof your store’s marketing strategy by finding privacy-friendly data sources.