Third-Party Cookies Going Stale: The Depletion of Third-Party Cookies

Arent Fox

Arent Fox

Tides of change in the digital advertising and regulatory landscape over the last few years have recently ushered in an increasingly likely future without third-party cookies.

Background – An Abbreviated History of Recent Global Data Privacy Changes

The past few years have been marked by massive global shifts in data privacy regulation including for example, the introduction of the EU General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA) and Privacy Rights Act (CPRA), the Brazil General Data Protection Law (LGPD), and updates to Canada’s privacy law, all of which generally broaden the scope of consumer data protection by addressing consumer data collection, storage, dissemination, and/or use. These regulations, in addition to browser gatekeeping and the rise of ad-blocking capabilities, have resulted in palpable down-stream changes to the digital advertising landscape.

In 2020, the digital advertising landscape was further impacted by Google Chrome’s announcement that it would be phasing out third-party cookies by 2022, thereby joining popular web-browsers Safari and Firefox in ceasing third-party cookie use. Given that together these web-browsers account for 90% of the impressions rendered on browsers, Chrome’s announcement was seen by many as the end of third-party cookie use.

The Interactive Advertising Bureau (IAB) has developed a guide to help prepare businesses for a future advertising environment without third-party cookies, including information on how future digital advertising campaigns may be affected and what businesses can do to prepare.

Changes to Expect Upon the ‘End of the Third-Party Cookie’

It is important to note that the depletion of third-party cookies does not signal the destruction of third-party audiences nor of the digital advertising industry itself. Additionally, the IAB guide notes that the depletion of third-party cookies will likely result in the following changes:

  • Frequency capping may no longer depend on cross-publisher identifiers
  • Audience-based dynamic creative optimization will likely be hindered
  • Data Management Platforms will no longer be able to rely on cross-publisher identifiers in creating identifier linkages
  • View-through or multi-touch attribution may no longer be possible

What To Do

Given the anticipated depletion of third-party cookies in the eventual future, businesses may want to start considering alternatives, including using alternative advertising identifiers, like Mobile Ad IDs and CRM data, using other advertising data to make targeting decisions, and using contextual targeting. For example, pseudonymous deterministic authenticated identifiers are a type of identifier that encrypts personally identification information through hashing or salting. This type of identifier is based on user-authentication on multiple devices and across sites and provides an alternative to a third-party cookie.

Businesses may also consider monitoring and contributing to organizations working on alternative solutions. In addition to the IAB, other groups such as, the World Wide Web Consortium, and IAB’s Project Rearc are all calling for stakeholders to participate with input. The full IAB Guide to a Post Third-Party Cookie Era can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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