The world of online tracking is changing in 2023, and if you work in marketing, you’re probably already aware of the impending demise of third-party cookies. For years, these small bits of code have been the backbone of online tracking, allowing companies to monitor users’ browsing behavior across multiple websites and build detailed profiles of their interests and habits. But with increasing concerns about privacy and data protection, major web browsers like Google Chrome and Mozilla Firefox are phasing out support for third-party cookies, leaving many marketers scrambling for alternatives.
This shift has significant implications for conversion tracking, and CFOs should be concerned about the impact it will have on their bottom line. Without third-party cookies, it will be much harder to accurately track and measure the effectiveness of marketing campaigns, making it difficult to attribute sales to specific channels or campaigns. This means that CFOs may not have trustworthy data about their sales attribution and may struggle to understand the true impact of their marketing efforts.
But don’t worry, we’ve got you covered. In this guide, we’ll explore the implications of this shift and what it means for CFOs and marketing executives looking to track sales and optimize their campaigns. By the end of this guide, you’ll have a better understanding of the challenges ahead and the tools and strategies you can use to stay ahead of the curve. So, let’s dive in!
What are third-party cookies?
To understand the challenges of tracking sales without third-party cookies, it’s important to first understand what they are and how they work. Essentially, third-party cookies are small text files that are placed on a user’s device when they visit a website. These cookies contain information about the user’s browsing behavior, such as the pages they’ve visited and the products they’ve viewed. Advertisers and marketers can then use this information to serve targeted ads and personalize their marketing campaigns.
Google Analytics, Google Ads and Meta Ads, and most marketing tools use third-party cookies to track users on your website. When a user visits your website, a cookie is stored in their browser by Google or Meta, allowing them to track the user’s behavior across multiple sites. This means that when a user interacts with your website, their behavior is tracked and recorded by these tools, giving you insights into how users are interacting with your website and ads. For example, Google Analytics can track which pages users are visiting, how long they are spending on those pages, and where they are coming from. Google Ads and Meta Ads can use this data to track which ads are driving the most traffic to your website and which ads are converting the most users into customers.
The problem with third-party cookies
While third-party cookies have been a staple of online tracking for years, they’ve also been the subject of increasing scrutiny and criticism. Many users are uncomfortable with the idea of their online behavior being tracked and monitored, and concerns about data privacy have only intensified in recent years. As a result, major web browsers like Chrome and Firefox have decided to phase out support for third-party cookies, making it increasingly difficult for marketers to track user behavior across multiple sites.
The impact on tracking sales
The phasing out of third-party cookies has major implications for tracking sales and measuring the effectiveness of marketing campaigns. Without the ability to track users across multiple sites, it will be much harder to determine how users are interacting with a brand’s website and which marketing channels are driving the most sales. Additionally, many current sales tracking systems rely heavily on third-party cookies, meaning that companies will need to find new ways to measure their ROI and optimize their campaigns.
An example to illustrate
Let’s say you’re scrolling through Instagram and you see an ad for a product from a brand you’ve never heard of. You don’t click on the ad, but a few days later, you remember the brand and search for it on Google. You click on the website, browse around, but ultimately decide not to make a purchase. A few days later, you come back to the website and finally make a purchase.
Before the phasing out of third-party cookies, it would be easier for the brand to track your behavior across multiple sites, from the Instagram ad (even without clicking) to the Google search to the website visit and purchase. However, without the ability to use third-party cookies, it becomes harder for the brand to track your journey and understand which marketing channels were most effective in driving the sale. This makes it more challenging for brands to measure their ROI and optimize their campaigns, as they will need to find new ways to track and analyze user behavior.
Alternatives to third-party cookies
While the demise of third-party cookies presents a significant challenge for marketers, there are also a number of alternatives and workarounds that can help fill the gap. One approach is to use first-party cookies, which are placed on a user’s device directly by the website they’re visiting. While these cookies are less effective for tracking users across multiple sites, they can still be used to personalize the user experience and provide targeted content and offers.
However, building an in-house first-party tracking system is not an easy task, and it comes with its own downsides. First, it requires a significant investment of time and resources to develop a system that can accurately track and measure user behavior on your website. This means that smaller companies with limited budgets may struggle to create a robust first-party tracking system that can compete with the capabilities of third-party cookies.
Second, even with a first-party tracking system in place, there are limitations to what it can track. For example, it will not be able to track users who access your website from different devices or browsers, as first-party cookies are limited to the specific device and browser they are installed on. This can make it difficult to build a complete picture of a user’s behavior and interactions with your brand, which can limit the effectiveness of your marketing campaigns and lead to missed opportunities.
Another approach is to use device fingerprinting, which involves collecting information about a user’s device, such as their operating system, browser version, and screen size, to create a unique identifier that can be used to track their behavior across multiple sites. However, this approach is very controversial, as it can be used to track users even if they’ve opted out of cookies. Not recommended for serious companies.
What CFOs and marketing executives can do?
If you’re a CFO or marketing executive, there are a number of steps you can take to prepare for the end of third-party cookies. First, it’s important to ensure that your website is compliant with data privacy regulations like GDPR and CCPA. This will help you build trust with your users and avoid potential legal issues.
You can also explore alternative tracking methods, such as first-party cookies and new tracking tools, to see which approaches work best for your business. Additionally, it’s a good idea to work closely with your marketing and advertising partners to ensure that they’re also prepared for the end of third-party
