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The Death of the Cookie

The Death of the Cookie

Tracking cookies might soon be a thing of the past. In fact, just this past month, Google announced it would be phasing out support for cookies in its Chrome browser. Whether this is a positive or negative development depends on how you use the internet. 

For businesses, who use cookies for monitoring user behavior and gathering data on their marketing activities, and who spend a lot of resources turning cookies into customers, the death of the cookie is going to be a huge headache. On the other hand, users might welcome this development: cookies can reveal a lot about you, and their demise might bring gains in terms of online privacy.

In this article, we'll look at the way that cookies are used at the moment, why they might soon pass away, and what that means for both businesses and users. 

What Are Tracking Cookies?

Tracking cookies are also known as “browser cookies”, or just simply as “cookies”. They are small files that are stored on users’ devices and allow online businesses to offer a unique experience to each visitor. Using a visitor’s IP address as a unique ID, cookies contain information like browsing history, user ID, session ID, and several other pieces of information.

Looking a little deeper, there is a distinction between first-party cookies and third-party cookies. The former type of cookie is created and manipulated by a website that a user is browsing, and is a fundamental part of how most sites work. The most basic types of cookies are used to track a user as they move around a website, and to ensure continuity across pages: without this type of cookie, a user would have to log in to every new page they visit.

Third-party cookies are different. They are generally delivered by tracking pixels or Javascript code. Because third-party cookies originate from sites, companies, or services that users have not directly interacted with, they have long been seen as an invasion of privacy - or outright means to enforce internet censorship. Companies like Google do not ask users for permission to install these cookies, which are then used to track user behavior in order to target ads more effectively.

The Cookie Crumbles

Privacy concerns about third-party cookies have been around for many years, and several software companies have already developed systems to block or clear them from your browser cache.

Apple, for instance, has used its Intelligent Tracking Prevention (ITP) system to block tracking cookies, and Firefox’s Enhanced Tracking Protection (ETP) now blocks third-party cookies by default. This has made tracking cookies far less effective in monitoring the behavior of those who use these web browsers. The final death of the cookie, though, might be just around the corner. Google’s latest version of the Chrome browser, which began rolling out on February 4, has controls that let consumers block cookies.

Google’s decision has been driven by a number of factors. Firefox has gained market share by offering better privacy than its competitors, and so Google risks being left behind in the context of increased concerns about privacy. New regulations like GDPR and the California Consumer Privacy Act (CCPA) have also had an effect: this legislation puts in place far stricter controls about how and when cookies can be used.

Adding cookie blocking to Chrome is likely to have a huge effect on the use of cookies across the web. That’s because the Chrome browser accounts for over 60% of the browser market share. On the other hand, blocking cookies seems like a strange move for a company whose income is largely based on targeted marketing.

Google themselves have explained this move in terms of a response to consumer demand. “Our experience shows that people prefer ads that are personalized to their needs and interests,” Google engineering VP Prabhakar Raghavan said in a blog post explaining the shift, “but only if those ads offer transparency, choice, and control.”

The Bad News and The Good News

Whether the death of the cookie is bad news or good news depends on your perspective.

Here’s the bad news. Adweek has called the death of the cookie a “fundamental change” in online advertising. The use of cookies, and especially those that are able to collect valuable information on users, has long been one of the major considerations for app developers, and many companies rely on cookies for their income.

As such, the death of the cookie represents a radical change not just in the way that companies develop their online presence, but also in the core business model of many companies. This is likely to have effects at every stage of the business cycle: from the calculation of business loans, through the development of websites and online services, right through to the level of personalization that companies can offer their visitors.

On the other hand, the death of the cookie might be great news for users concerned about their privacy. It’s long been known that cookies are not just used to serve personalized ads: they are also used for government surveillance, and by hackers looking to steal data. This has led to claims that consumers have already lost the privacy war. The death of the cookie might – just – tip the balance in the favor of users.

In truth, however, the death of the cookie has been a long time coming. Smart users have long known that blocking cookies is part of the privacy best practices for freelancers, and smart companies have already started to move away from cookies as a way of tracking user behavior. 

Though popular ecommerce platforms like Ottawa-based giant Shopify have long flourished on the information yielded by cookies, these online companies have seen the writing on the wall and are allowing web analytics to be performed on other types of unique user identification, which allows companies to analyze their internet traffic, and to target personalized ads, without relying on cookies. 

So if you own a business, and you haven't started to prepare for a post-cookie world, now is the time to catch up. “The fundamental challenge facing marketers with this latest release is visibility into how their digital marketing is performing,” said Ryan Storrar, SVP and head of media activation for Europe, Middle East and Africa at Essence in an interview with Digiday. “ITP 2.1 is the latest chapter in this story. There are steps that can be taken to limit the impact in the short-term, but, more broadly, a post-cookie world is clearly on the horizon and marketers need to get ready.”
 

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