Preparing for a Cookieless Future | Nextdoor

Topic overview:

In recent years, the digital advertising industry has undergone a transformation. Stricter privacy laws by government organizations and the implementation of restrictions on user tracking mechanisms by large companies have significantly changed the collection of user-level data for marketing purposes. All of these changes have the sole intention of protecting consumers' privacy. One such change that we are anticipating will have a massive impact on the industry is Google’s planned deprecation of third-party cookies. 

The upcoming deprecation of third-party cookies introduces both challenges and opportunities for businesses and digital marketers. As privacy regulations tighten and consumer expectations shift towards a more private web browsing experience, the digital marketing landscape needs to evolve to accommodate the changes.

The depreciation of cookies warrants marketers to evaluate their existing campaign strategies to effectively reach, engage, and convert audiences in a way that respects user privacy while still being able to drive performance without much disruption.

Read on for more. 

Decoding: What is a cookie? Difference between a First Party Cookie and Third Party Cookie

Cookies are small text files that are stored in a user's browser when they visit a website. They store data related to the user's browsing behavior, site preferences, and actions taken when the user visits the website.

• First-Party Cookie - When a user visits a website, their browser stores small text files known as cookies. These files store data related to the user's browsing behavior, site preferences, and actions taken when they visit the site. First party cookies are implemented by the domain or website owner. They will still continue to exist. 
  
  
• Third-Party Cookie - These cookies are set by domains other than the one the user is visiting. They are mainly used by third party companies to collect data across different websites.

Here’s a brief overview of the key areas for digital marketers and businesses to focus on as they navigate this transition:

Understanding where Third Party Cookies are currently used? 

Third-party cookies have traditionally been used in marketing strategies in the following ways:

• Media Measurement: Cookies are prevalent in the media measurement space. Cookies are used to track user actions (conversions) on websites and tie them back to ad exposures, ultimately helping to give credit to the media channel or platform that drove the action or conversion.
  
  
• Audience Targeting and Personalization:
  
  
  • Personalization: Data collected from tracking users' behavior on the website helps to understand the user's preferences and the type of content the user is most interested in, which is used to provide a more tailored experience for the user. This data can be utilized for personalized marketing campaigns.
    
    
  • Retargeting: Cookies are used to retarget users who have visited the website and taken certain actions that add value to the website owner.
    
    
• Cross-channel tracking of user actions: Cookies are able to track the user's actions once they land on the website through various channels. This could be the web pages they visit, buttons they click, or any actions they take on the website that are of interest to the website domain owner and the third party. These actions are used for cross-channel attribution modeling or for targeting users that are highly valued for certain actions across channels.
  

What immediate impacts should marketers expect?

Across the landscape marketers should see noticeable changes in areas where third party cookies are currently in use:

• Media Measurement: Cookie ID’s are one of the dominant matching parameters used for attribution modeling. When third-party cookies are deprecated, less signal data will be available to tie ad exposure to website action (conversions). This will ultimately lead to an incomplete view of the performance of media tactics, partners, and channels.
  
  
• Decline in retargeting audiences: The deprecation of third-party cookies will make it more difficult to retarget individuals based on their actions, which will significantly impact the retargeting audiences.
  
  
• Limitations in user behavior tracking: Third-party websites cannot track user behavior across websites and channels. This will impact any marketing strategies that rely on cross-behavioral user tracking.

What steps can businesses take now to prepare for the phaseout of third party cookies starting in Q1 2025?

• Audit your current measurement stack and processes: Businesses need to audit how the evolving landscape impacts their holistic marketing strategy. The audit should encompass the following:
  
  
  • How is the data collected currently? How much of that data is dependent on third-party cookies?
    
    
  • Evaluate external partners and how their strategies are changing in response to the deprecation of third-party cookies.
    
    
  • Audit the current marketing performance measurement tools that will be impacted.
    Analyze if any partners or channels will be impacted more than the others and device mitigation strategies.
    
    
• Transition to first-party data strategies: First-party data has become increasingly important for businesses. Businesses should explore opportunities to increase the collection and utilization of first-party data. 
  
  
  • First-party data collection can be used for enhanced measurement and audience targeting capabilities that are otherwise impacted by third-party cookies.
    
    
• Explore new technologies and privacy safe data transfer mechanisms: Since Google's announcement of its planned cookie deprecation, the industry has been developing and exploring newer technologies and methods to still enable businesses, but in a privacy-safe way.
  
  
  • AI and Machine Learning: There are a number of innovations in methodologies that use artificial intelligence and machine learning for media measurement without relying on third-party cookies. Businesses should explore where some of these technologies fit in their measurement stack and how they can help alleviate some of the impact.
    
    
  • Availability of data for targeting, performance measurement, and optimization: Test and investigate enhanced data sharing mechanisms like server-to-server connections and data clean rooms to use first-party data for audience targeting and measurement.

How is Nextdoor preparing businesses for a smooth transition to the post cookie world?

Nextdoor is preparing businesses by developing innovative solutions and capabilities that can help mitigate some of the risk due to signal loss:

• Media Measurement
  
  • Nextdoor Conversions API (CAPI):  Nextdoor has built a future-proof conversions API that allows advertisers to share conversion data with Nextdoor in a privacy safe compliant manner for measurement and attribution.
    Learn more about Nextdoor CAPI here.
    
    
• Audience Targeting
  
  
  • Nextdoor First-Party Audience Targeting:  Nextdoor’s first-party audiences will not be impacted due to third party cookie deprecation. Leverage Nextdoor’s verified first party user data as an alternative to traditional cookie-based targeting as these audiences are based on key platform signals.
    
    
  • Contextual Targeting:  Examine the feasibility and effectiveness of contextual advertising on Nextdoor as an alternative to third-party cookie-based targeting.
    

Stay tuned for more updates on the Nextdoor for Business web page for strategies and learnings on measurement and adapting within the  evolving digital marketing landscape to a cookieless world.