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How Will Google Chrome’s Ban on Third-Party Cookies Affect Ecommerce?

How Will Google Chrome’s Ban on Third-Party Cookies Affect Ecommerce?

Google Chrome announced that they would be removing third-party cookies from the browser. This was expected to happen in 2021 but has recently been delayed until 2023, and is a continuation of a trend that already appeared in Safari and Firefox in 2017. It comes as an attempt to protect the privacy of their users more than before, but also because there are legal trends starting in Europe and America. Let’s try to figure it out:

  • What are first-party cookies and third-party cookies, and what are the differences between them?
  • How will the changes affect eCommerce?
  • And what should marketers and merchants do now?

What are cookies files?

A cookie is a small file that can store information on the computer. Each time a person visits a website, the site saves this data and uses it to track how many people have been there before or what they have viewed recently – making websites more personalized for their users!

A cookie contains information about the website’s visitors. Cookies allow merchants to track individual online activity. It is a way for websites to store and read the information on the users’ computers. Cookies make use of internet users’ behaviours analyzing and tracking their actions.

First-party cookies and third-party cookies 

There are two types of cookies, first-party cookies and third-party cookies. Google Chrome has decided that third-party cookies will be completely blocked in the browser by 2023.

Previously, other browsers such as Safari and Firefox made the same decision. The difference is that Google Chrome is the largest browser having though a significant impact on the market. 

Another difference is that all other browsers have removed third-party cookies technology without an alternative, while Google is working on implementing an alternative technology to collect behavioural information for marketing purposes. Google plans to replace third-party cookies with other solutions that are being tested.

What is the difference between first-party cookies and third-party cookies? 

First-party cookies are set by the website a user visits to improve the user experience by keeping in mind the passwords and shopping carts to propose the most relevant offer.

Third-party cookies come from other sources, such as ad networks or analytics services that want to track individual activities on different sites. Google ads and Google analytics use them to track visitors and show them ads adjusted to the history of their online activity.

First-party cookie – first-party data

A first-party cookie is a tiny code that gets generated and stored on your website visitor’s computer by default when they visit. This can be used to remember passwords, user data such as preferences or other information with just one click! It is all about gathering data about your visitors to make their user experience more personalized and relevant.

Let’s say a user visits an eCommerce site about shoes – it will have first-party cookie information about him or her, but if that site works with an advertising network like Google Ads or an analytics provider like Google Analytics – it will also be able to set cookies called third-party cookies.

Third-party cookies – aggregated data

Third-party cookies are used for remarketing purposes, allowing to track the users of the website and remind them about the products or services they were interested in by showing them ads on other visited pages.

This 25-year-old technology is not perfect and is currently considered to be not good enough, as tracking users’ behaviour makes them suspicious about revealing sensitive data.

Overall, cookies are a huge part of what makes the Internet work, but they have also been able to track people’s activities without their knowledge or consent. In fact, most browsers give you control over cookies through browser settings such as “private mode.” But the fact is that the situation needs to be arranged globally in a new way.

Privacy-sensitive trend

Users are becoming more aware of technology risks and don’t want to share their personal data with no permission, which is possible with third-party cookies. Consumers lose trust in online relations and transactions when they are not transparent.

As Google says the third-party cookies “…have led to an erosion of trust: In fact, 72% of people believe that almost all of what they do online is being tracked by advertisers, technology companies or other businesses, and 81% say the potential risks they face from data collection outweigh the benefits”

Source: https://blog.google/products/ads-commerce/a-more-privacy-first-web/

As user demands for greater privacy continue to grow, it’s clear that the web ecosystem needs to evolve. These expectations are also supported by laws established in European and American countries. So the digital corporations need to adjust their operating modes to the legal regulations on user privacy and modify digital advertising based on data that rely on third-party cookies.

Personalized offers and ads

A recent survey revealed that 63% of consumers want personalized ads and offers. But they also want the choice to be tracked or not, as well as being given ads with their specific interests targeted, so marketers can better connect them and provide what is best suited for each individual’s needs—a personalized experience.

Marketers will have to keep in mind that users are more privacy-sensitive now, and it is a good time for them to start planning their next moves with this change of pace without third-party cookies by default.

What they can do is adjust the tracking tools they use on their sites so that they only collect data about who’s actually interested in their offers – the marketers can only use first-party cookies and collect first-party data.

Changing technology – without third-party cookies?

In the coming situation, the merchants and marketers will continue to benefit from using cookies that track user activity on their sites to target advertising to them.

There will be only first-party cookies possible to deliver a high-level user experience of the individual user who is aware of sharing personal data willingly.

Web users do not agree to third-party data collection, however, they are willing to share data with identified partners to improve their user experience.

Targeting ads based on user data from the web browser

The question is what Google will propose after blocking third-party cookies. It is still not revealed but expected that new technology will be implemented to replace third-party cookies in Chrome.

The Google initiative called The Privacy Sandbox link shows possible directions. Google will not only block third-party cookies, but also gives alternatives for data collecting, ad targeting, and new ways to track users online. The new approach focuses on targeted groups, cohorts with similar interests, rather than individuals.

No tracking cookies, what instead?

Google has announced that FLoC (Federated Learning of Cohorts) can provide an effective signal to replace third-party cookies. Its tests of FLoC to reach in-market and affinity Google Audiences show that advertisers will see at least 95% conversion rates per dollar spent when compared with cookie-based advertising.

The specific result depends on the strength of their algorithm, which is designed to cluster large groups into convenient segments so you never miss out on potential customers again!

But at least there won’t be any third-party tracking tools collecting data about users who are not interested in their products or services, so it will reduce the risk of violating privacy laws and getting into trouble.

How will the changes affect eCommerce?

Banning third-party cookies would have a significant impact on online retail, but it may not be as detrimental to marketers and merchants.

E-commerce sites rely heavily on real-time tracking of user behaviour – they need this information to optimize their site for conversions or personalize it based on the type of devices, browsers, or screen resolutions that visitors use.

Tracking customer behaviour and browsing habits 

This is how companies have been analyzing customer behaviour for years and it will be a huge challenge to change this focus towards an analytics approach aimed at understanding clients needs rather than just traffic volume on the site.

The e-commerce industry has already seen some changes since the launch of the GDPR (General Data Protection Regulation) by the European Commission in 2016, but this latest change may be the most significant so far.

Uncertain future of new technology after cookie ban

It is still too early to judge Google’s latest move, but it will definitely affect the way marketers do things. They should get ready for changes and be open to new ideas that can help them adapt their strategies in order not to lose money or customers.

Google’s latest move is most likely going to affect eCommerce marketing strategies, as it has already started doing so in Safari and Firefox browsers. However, this doesn’t mean that there are no options, as there are many tools that can help marketers adapt their strategies and still make a profit.

What happens when cookies are not tracked?

Merchants and marketers still have some options to use in-game. The winners are those who start to prepare soon enough and not only waiting for the web browsers operating rules to change and Google’s decision.

No third-party cookie marketing strategy

First of all, e-commerce sites should also make sure that they don’t collect data about users who are not interested in their products or services, as this can cause legal issues that will become all the more difficult to resolve as time goes on.

Marketers should start planning how they will adapt and adjust their strategies now before it’s too late and they no longer have any choice but to abandon their ad campaigns.

They can still make money and meet the needs of their customers, but they need to be ready for changes that will affect them in a number of ways.

The need for a good tracking tool

This is why marketers should also pay attention to the tracking tools they use and make sure they only invest in ones that do not violate privacy.

There are many options to choose from, so it shouldn’t be hard to find one that meets all of their needs while protecting users’ data at the same time.

Prioritize first-party cookies  

Blocking third-party cookies doesn’t mean that first-party cookies are not allowed. First-party data are those you should pay attention to. While first-party cookies and third-party cookies technically have the same structure, the difference lies in the allocation of data. 

The first-party data belong to the website owner and the third-party data goes to the aggregates of a huge amount of data, and users do not control the spread of the data.

Own database and relations building

You can still keep data about your clients to offer them personalized products and services and to communicate with them in the way they allow you to. Keeping passwords and accounts details to deliver a high-quality experience is a must.

Incentives for users to share their personalized data will allow you to build relations based on first-party data. Persuade them that you are worth building a relationship with by offering valuable content circulated in email newsletters and custom-created ads.

The first-party data can also help you learn more about your visitors and how they use the website.

Capture one-time store visitors with an opt-in system

It is essential to capture one-time store visitors with an opt-in system that will allow you to build future relationships, collect their contact information for newsletters or follow-ups emails, and consequently keep them coming back without having to spend money on ads.

The opt-in system is the best way to get in touch with one-time site visitors and convert them into loyal customers while gaining valuable information about their needs and preferences through newsletters or follow-up emails.

Focus on owned channels

It is also important to focus on the channels you have and prioritize email marketing to keep up with changes.

The idea here is to collect information about your visitors, send them personalized messages, and give them incentives for sharing their personal data. In this way, you will build relationships based on first-party data by keeping everything under control and protecting your clients’ privacy.

Build a stronger social media engagement

In addition, it is essential to build a stronger social media presence. People are spending more and more time on sites like Facebook or Pinterest, so if your e-commerce site has an active page, you can capitalize on this trend and engage visitors by posting content that interests them.

The key here is to go where your clients are and engage them, building relations that you can later use for ad campaigns customized according to their needs.

Use contextual ads – go back to the beginning of advertising

One of the most effective ways to reach your customers with targeted ads is through contextual advertising. Contextual is more likely than cookie-based behavioural retargeting because they appear where you least expect them on a website or app, making this type less creepy for consumers who may be avoiding technology as much as possible due to privacy concerns these days.

Contextual ads are more relevant to the content presented on the website and more convenient for the users as they suppose to be less disturbing.

When it comes to ad campaigns using contextual ads is the new direction. The right place and the right time is key because you are targeting ads to specific groups of people based on their interests and preferences, not behaviour.

When using contextual advertising keep in mind that visitors come from different channels, so what works for one group may not work for another, so you should test and try different options to find out what works best for your website.

People-based targeting

The marketers have to identify their customers by first-party data operating through diverse devices and track them in real-time to discover their real needs and appeal to them correctly. Collecting data from different sources and combining them to create a real picture of a customer is a challenge for customer-centric marketing. Brands can now automate their marketing approach and reach audiences on any device is one cohesive strategy. This approach can be realized in omnichannel e-commerce platforms like Magento.

Omnichannel user experience

Instead of relying on third-party cookies, e-commerce should relocate the attention toward building a comprehensive customer experience across all channels offering the same standard of service that customers expect. Clients expect to be treated with respect for their personal needs and to have access to the individual shopping service mix

A great tool to achieve this is the Magento e-commerce platform and its omnichannel functionality to support nowadays customer expectations and technology requirements. More about Omnichannel features at Magento e-commerce platform read on our blog post about ☞ Magento e-commerce platform for omnichannel. 

Conclusion – being up to date is a clue

Since nothing is yet settled for good, and the only sure thing is coming changes, you should pay attention to the changing environment, test the best solutions for your e-commerce and check out new technologies like Google Privacy Sandbox that will appear in the comming future.

The corporation will not resign from data collecting as its existence depends on them, the question is what will be next.

Marketing expert predicts that cookieless marketing will be based on first-party data, content, and community. So building individual relations is a wise decision. Keep in mind that the biggest players in proprietary data are large corporations such as Google, Facebook and Amazon.

But you are not without a chance to succeed at this. You need to be smart and identify your business data sources, choose the right technology, collect it and use it for the benefit of your customers, keeping in mind that a client-centric approach is going to build your success.

The Magento e-commerce platform can be a good tool for your business ambitions now and in the future. Robust open-source e-commerce platforms are future-oriented and allow you to scale and compete with the biggest players.

For more smart solutions and devices, ask our Magento Expert, we will be happy to share our knowledge with you and support your e-commerce development for mutual success – Let’s talk

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