by Julia Smith
Google Eats Third-Party Cookies: How the Demise of Third-Party Cookies Will Impact Automotive Marketing
By Julia Smith & Sierra Vachon
Google Chrome plans to end tracking via third-party cookies by January 2022 entirely. Of course we’re not referring to the cookies you eat, but the primary software code marketers use to track user activity online in the digital marketing world. These cookies are further-divided into “first-party” and “third party”.
- First-party cookies track user behavior and only share data back to the owners of the website the user is visiting at the time.
- Third-party cookies track user browsing habits across websites to create online behavior profiles that can be used to target consumers with advertisements directly based on interests. Only third-party cookies are being eliminated. Websites will still be able to utilize first-party cookies to track their visitors.
Why is Google Moving Away from Supporting Third-Party Cookies?
According to Paul Coffey, Director of Platforms, Partnerships & Privacy, Google EMEA, “…the changes are part of a long-term evolution of the online advertising ecosystem in response to consumer expectations.” Coffey further states that 70% of users feel they are being tracked by advertisers, technology providers or other companies all the time and over 80% feel that the potential risks they face from data collection outweigh the benefits.
Other browsers and tech companies have already undergone similar changes, with Apple being the most recent to start implementing the end of third-party cookies within apps; giving users the choice to opt-out proactively. That said, with Google Chrome’s 70% market share, the impact of removing third-party cookie support from Chrome will be far more significant. Case in point, as of March 2021, 41% of advertisers rely exclusively on third-party data for targeting and measurement (Cookie-pocalypse, WNIP).
What Does This Mean for Dealerships?
For automotive dealerships, the biggest digital marketing tactic that will be disrupted is retargeting. Retargeting relies on third-party cookies following users from site to site. This is a big deal. In 2019 Google estimated that removing third-party cookies from its browser could initially reduce publisher ad revenue by up to 52%. But where is this money going to go?
The World Media Group hosted a webinar with industry experts to discuss what this means, and how marketers can prepare. With the third-party data market currently worth $19 billion a year, they asked the audience where they think the money will be reinvested. According to the poll, 56% of the audience expects it to go into first-party data strategies, 31% believes it will go to contextual targeting and 13% thinks it will go to direct partnerships.
Forward-looking automotive digital marketing companies like CBC Automotive Marketing have already begun to plan strategies and implement changes with the phasing-out of third-party cookies in mind, by finding other reliable data sources and effective ways to advertise to target audiences successfully.
A good example of an auto brand that has aggressively prepared for this change is Cadillac. They have been shifting to tech vendors that can help match their first-party data with other resources, such as publicly available automotive purchase data. They also expect to rely on Google for broader reporting on campaign results, operating more as it has in the pre-cookie past.
What are the Alternatives to Third-Party Cookies for Automotive Dealers?
Like Cadillac and CBC Automotive Marketing, other proactive digital companies are already lining up alternative ways to successfully run effective and targeted advertising in a world without third-party cookies.
The largest of these, Google, generates over 90% of its revenue from advertising. Clearly, it is in Google’s best interest to invest in smart, effective alternatives to third-party cookies that protect individual privacy. Thus, Google has proposed replacing third-party cookies with data compiled through FloC (Federal Learning of Cohorts).
This strategy will allow automotive digital advertisers to group users together based on interests while keeping personal identity and web habits hidden “in the crowd.” This is where Google’s proposed “Privacy Sandbox” comes into play. While Chrome will no longer support the use of third-party cookies, Google will still allow advertisers to use first-party cookies to target their ads. In early trials, Google reports that marketers were able to convert messages to sales at 95% of the rate they did with third-party cookies.
Elizabeth Brennan, Head of Advertiser Strategy at Permutive, points to another way digital advertisers can offset the loss of third-party cookies. Brennan suggests brands “…wean themselves off third-party data” by “…forming strategic alliances with publishers to take advantage of their audience insights and wealth of actionable first-party data.” (“Cookie-pocalypse,” WNIP).
Exactly how the FloC, Privacy Sandbox and first-party data strategies will play out in the real world remains to be seen. But history demonstrates that there will continue to be viable alternatives – some yet to be discovered – that will allow forward-thinking automotive digital marketers to generate strong ROI on their campaigns.
What is CBC Automotive Marketing Doing About This?
At CBC we recognized the need early-on to navigate these changes while continuing to generate high-quality leads for some of the most successful automotive dealers in the US. The changes are yet another reminder of the complexity involved in running successful and cost-effective digital marketing campaigns in 2021 and beyond. As a cutting-edge marketing agency, CBC Automotive Marketing is well-positioned to enable our auto dealer partners to thrive in this brave new world, including through:
- First-party data collection: This is more critical than ever. We continue to emphasize collecting data for our clients; aiming to consistently capture sales information by zip code, age, gender, etc. Regularly exporting and analyzing this data allows us to optimize our campaigns and keep our finger on the market’s pulse as it specifically relates to our clients’ customers.
- First-party data strategy: CBC is systematically shifting our focus to first-party rather than third-party data. We’re also shifting budget allocations in alternative areas of contextual targeting while reducing ad retargeting budgets.
- Vendor Partnerships: We’re consistently researching and vetting the best vendor-partners for matching first-party data with other resources, such as publicly available automotive purchase data.
- Publisher Partnerships: Our strong alliances with premium publishers allow us to take advantage of their audience insights and actionable first-party data.
- Google’s Privacy Sandbox: CBC will utilize this new interface from Google. This will shield Chrome users from explicit identification and monitoring via third-party cookies, while still providing advertisers with enough data to derive insights and make useful judgments regarding consumer behavior (Harper, Dealer Marketing).
In the end, the phasing-out of third-party cookies will give consumers what they have been asking for – more personal privacy and control over the relationship with the brands they do business with. We don’t anticipate the type of all-out cookie apocalypse some are warning of. If your marketing agency is being proactive about these changes for your dealership or group, you should have nothing to worry about. If not, then perhaps it’s time for conversation with CBC Automotive Marketing!