If you’ve browsed the web recently, you’ve probably seen dialog boxes warning you that the sites you’re visiting use cookies, and by continuing to use a site, you agree to its privacy policy. This is great news for consumer privacy. So, why does it have marketers concerned? Let’s take a look.

What is a cookie?

A cookie alone is no reason to panic. Cookies are simple text files containing just enough information to identify you and your preferences. They tell the site you’re visiting how much time you’ve spent on each page, the links you’ve click, and if you’ve logged into your account. Cookies are how the site remembers your language preference and why your shopping cart continues to hold items even if you get pulled away from the page.

Specifically, these are first-party cookies, which means they can only be read by the domain that creates them. They can’t access files on your hard drive, and they can’t be read by other websites. While first-party cookies do collect information about you, the intent is that this data will make your experience on the site more pleasant.

Cookies are powerful.

With just a small text file, a website can determine which pages you’ve visited and how long you stayed. From that, they can infer a lot of information about you. If you’re on Amazon searching “baby bottles”, it could be assumed you’re the parent of a small child and Amazon might start suggesting popular baby toys. If you also browse women’s clothing – now they have even more to recommend.

Imagine this happening across every site you visit – all the information being gathered about you, your family, your interests, your shopping habits. That’s where third-party cookies come in. These files aren’t created by the website you’re browsing, but by a “third party” that follows you from site to site gathering key information about you as you browse.

All of this information is culled together and used by marketers to serve ads for products they think you’d be interested in. The intent is still to make your browsing experience as pleasant as possible by not feeding you irrelevant ads. So, what’s the problem?

Privacy.

As we spend more time on the web and share more information across the internet, consumers and data privacy advocates have become increasingly concerned about privacy and transparency. Consumers are understandably wary. They want to know what information is being collected on them and how it’s being used.

As these security concerns became more prominent, strict privacy laws such as the EU’s GDPR, California’s CCPA and Apple’s ITP were passed. These policies strictly define “personally identifying information” and severely limit how it can be gathered and used. This signaled the beginning of the end for third-party cookies. Businesses now have to disclose that they’re collecting data, and consumers have the right to know how it’s being used.

Seeing the writing on the wall, Safari and Firefox have already begun blocking third-party cookies. Emerging open-source browsers, such as Brave, are being developed with privacy controls at the forefront. Google, arguably the largest data aggregator, has vowed to block all third-party cookies by January 2022.

How does this change the advertising landscape?

For individuals worried about privacy, this is a huge victory. For marketers and business owners, it can seem like a bit of a blow. Without the insight third-party data provides, how will they find customers and grow their business?

Luckily, as it turns out, third party data isn’t all that informative anyway. As the practice of data mining became a lucrative business, the information being collected became less relevant and more erroneous. Just for jokes, go check out Oracle’s Data Cloud Registry. You’ll see the bits of data being collected on you as you surf the web. Mine says I’m 35 and a Baby Boomer; that I like baseball and cats. None of this is true.

And, while the future will certainly see more restrictions around the collection and use of consumer data, there are alternatives to third-party cookies. Many will result in a more personalized experience for you and your customers.

What’s on the horizon?

Let’s revisit first-party data. This is information customers willingly share with you because they trust you and your brand. It’s yours alone – your competitors don’t have it, and it gives you the ability to create a tailored experience for your customers. That’s far more valuable than having to glean they have a fondness for cats.

Direct publisher buys are also still an option. Remember searching for baby bottles on Amazon? That’s Amazon’s first-party data. So is the information Google gathers when you search for an auto dealership. In fact, Google, Amazon and Facebook are three of the largest first-party data holders in the world. By placing ads directly through these publishers, you’re tapping into vast stores of first-party data they have collected, from shopping and browsing habits to location history and Alexa voice requests. You can take this a step farther by sharing your own customer data with these platforms (in an anonymized process that removes personally identifiable information) to find your customers on those platforms, plus thousands more prospects with similar attributes.

So, while third-party data will soon be gone, let’s remember that it was never the most accurate information in the first place. Change is on the horizon, and with it comes the assurance of a better consumer experience that shows you value your customers’ privacy as much as they do.