Chrome has already begun the 3PC (also known as third-party cookie deprecation), and it’s already impacting your business and marketing performance. In this post, we will discuss how to mitigate the change and prepare for the full phase-out.
What is happening
Following the footsteps of other browsers, Chrome has started deprecating 3PC for 1% of users from the 1st of January 2024. This share will gradually increase until 3PC cookies are deprecated for 100% of users in H2 of 2024. Google is also introducing Privacy Sandbox as an alternative to 3PC to maintain accurate, personalised and useful advertising for users and marketers.
Why it matters
Whilst other browsers have already phased out 3PC, Chrome has the most significant market share worldwide with 65% and will have the biggest impact on advertising. Secondly, this market share is more heavily adopted amongst desktop users who have historically had better conversion rates than mobile users.
Google and Meta have been heavily reliant on 3PCs in the past to help build profiles of users that advertisers can then target. Placing remarketing pixels on your websites has allowed them to see user activity across multiple domains. This makes it easy for advertisers to target users because both Google and Meta had very complete and high quality datasets that allowed for granular marketing activities – this will change.
What will the impact be
The quality of the third-party data (3PD) stored by Google will decline sharply and become incomplete and far less accurate. There will be a shift from user-level data to aggregated data. This will make marketing less efficient and reduce ROAS unless advertisers act to mitigate the change.
Making Science’s 3PC deprecation tool predictor has shown that up to 30% of conversions could be lost. This is due to several factors, including poorer quality traffic and more inefficient targeting. On average, 44% of digital advertising revenue in Europe relies on 3PC, and a recent client case of a global luxury retailer showed that they rely on an average of 30% of revenue in the past month (January 2024) being dependent on 3PC. With Making Science’s tool, we were able to predict a potential loss of up to 9% of digital revenue due to the deprecation.
With this change, it is Google’s responsibility to provide the tools to advertisers to maintain a strong ROAS, and it is the responsibility of advertisers to implement them. As 3PC deprecation is rolled out, the importance of 3PD vs 1PD is going to shift dramatically towards 1PD – it has always been better, but 3PD has been good enough to get away with having dedicated first-party data strategies.
What can be done to mitigate the impact?
There are lots of options available to handle this change – in fact, too many. It is essential to understand the impact on your business and prioritise the available changes based on ease of implementation and impact. We can bucket the opportunities into mitigation and activation.
Mitigation
These activities are aimed at reducing the loss of data volume and quality by implementing tools provided by Google and collecting better data using durable, privacy-compliant solutions.
- It’s important to use a consent management platform (CMP) rather than a DIY solution for a consent banner. CMPs integrate with Google’s technical solutions and provide template consent banners that comply with the latest regulatory changes in differing markets, which can become hard to manage as more and more countries and states implement their own privacy legislation.
- A thorough and robust GA4 implementation will provide confidence in data, become the data source of truth for the business and stay up-to-date with privacy changes, as Google has shown its commitment to keeping GA4 compliant.
- Implementing Consent Mode V2 for all Google products and Enhanced Conversions will allow for better matching by Google whilst respecting privacy. Consent Mode is now a requirement for using advertising features within Google products, and Enhanced Conversions allow conversions to be tied to impressions and clicks better, improving the understanding of campaign performance.
These are the essential requirements for dealing with 3PC deprecation, but more measures can be taken if it is justified. Implementing server-side measurement will further improve the robustness of the GA4 implementation and marketing pixels. Using the measurement protocol for key conversions to ensure 1-to-1 matching between internal databases and adtech. A greater understanding of users can be achieved by using a Customer Data Architecture (CDA) or a Customer Data Platform (CDP) and cleanroom analysis can help cluster users together for better aggregated targeting.
Activation
Creating audiences and lists for targeting through 1PD will need to be more prevalent. The first source will create GA4 Audiences that can be passed into Ads and the Google adtech stack based on user behaviour. This should be in action already, but with better data collection, the quality of the audiences that can be created should improve.
Smart Bidding will help to improve campaigns if not already in use. Smart Bidding uses Google’s AI to optimise conversions or conversion value through advanced machine learning and contextual signals. Another increasingly important tool provided by Google is Customer Match. Uploading lists into Ads will enable accurate targeting and reduce the impact of 3PC deprecation. It is an important process to automate as it can otherwise be time-consuming.
Beyond Google’s tools come more advanced methods of improving the signal provided to adtech. Scoring users with predictive modelling tools such as Gauss Smart Advertising will enhance the signals sent into Google’s algorithms, which can start optimising these signals instead.
Setting priorities and winning over stakeholders
Making Science’s 3PC deprecation tool makes planning strategies and quantifying the issue to stakeholders much easier. By analysing the results and different performances of browsers, devices, channels and campaigns – advertisers can assign a monetary value to the impact of 3PC deprecation. This makes getting technical and legal approval for changes such as enhanced conversions into sprints and implemented on-site much easier.
Managing expectations and predicting change is going to be important for marketing teams in 2024 to keep senior stakeholders happy and allow for the marketing strategy to be run without interference.
The Role of Privacy Sandbox
Privacy Sandbox is one of Google’s tools to help replace some functionality once 3PC has been deprecated. Testing and implementing solutions using the Topics API or Protected Audiences will potentially go a long way to mitigating the impact of 3PC deprecation – which is Google’s intention. However, early reports are mixed, and the UK’s Competition and Markets Authority (CMA) raised concerns that Google has answered.
The role of Privacy Sandbox will increase throughout the year, and we need to pay close attention to its capabilities and learn how it will work with advertising campaigns and the impact it will have. But for the short-term, getting these other measures in place is important, and then maximising opportunities from the Privacy Sandbox can become a priority in H2.
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