One of the biggest changes to digital marketing since its inception is upon us: The future is here, and it’s a cookieless one.
With the support of new legislation such as GDPR (UK and EU), CCPA (California), and CDPA (Virginia), more focus than ever before has been placed on online privacy. Data scandals such as Cambridge Analytica made users hyper-aware of how their data was being (mis)used, driving a surge in demand for change.
Internet users across the globe are on a mission to gain more control over how their online data is collected and used by advertisers, ultimately throwing third-party cookies into the firing line.
Third-party cookies have been used to track user activity as they browse the web for years. The data collected by them is then used by advertisers to create interest-based audiences that can be targeted with ads.
But, with third-party cookies being pried from the hands of marketers everywhere, what will the landscape of digital advertising look like in a cookieless world?
Despite the fear of the unknown, a lot of digital professionals are excited about the changes. It also unlocks the opportunity to gain an advantage on the market if you can crack it before the competition. This guide explains everything you need to know.
- What are Cookies?
- First-Party vs Third-Party: What’s The Difference?
- Third-Party Cookies And Their Purpose In Advertising
- Third-party Cookies are Crumbling
- What this means for Advertisers
- Google’s Plan For Leaving Cookies Behind
- Universal Analytics Will Soon Be No More, So Say Hello To GA4
- How Machine Learning Will Play A Leading Role In Analytics Data
- Key Differences Between Universal Analytics And GA4
What are Cookies?
Simply speaking, cookies are small blocks of data created by a website server. These data blocks are then placed on a user’s computer or mobile device by a browser, (such as Chrome), each time they visit a website.
Although multiple cookies are created during browsing sessions, they can be categorised as either first-party or third-party. Both first-party and third-party cookies observe user behaviour, but there are differences between how each category is used.
First-Party vs Third-Party: What’s The Difference?
First-party cookies are stored under the same domain a user is actively visiting. For example, if the user is on soapmedia.co.uk, all cookies stored under this domain are classed as first-party.
They are typically used by the website server to identify a user between different pages on the same domain. They can also be used to remember selected website preferences.
Third-party cookies are cookies that are stored on a different domain than the one the user is currently visiting.
Rather than their purpose being to improve user experience, as is the case with first-party cookies, their main goal is to track user activity across multiple websites and applications during browsing sessions.
Third-Party Cookies And Their Purpose In Advertising
Third-party cookies are currently used by advertisers to track and collect data on users as they surf the web. The information these cookies store allows advertisers to build robust user profiles and audience groups based on things like age, gender, likes and dislikes, interests, and previous browsing habits.
Marketers have access to these audience groups and are able to create specific campaigns designed to pique interest and encourage these users to re-engage.
For example, Facebook uses third-party cookies to track how users interact with paid ads. If a brand is advertising its product on the platform and a user engages with the ad, Facebook stores a cookie. This cookie enables Facebook to attach the user to an interest-based audience group, allowing them to show them more ads about similar products.
Third-party Cookies are Crumbling
Cookies have played a vital role in the ad tech industry since the advent of digital display and programmatic advertising. However, with legislation such as GDPR being put in place to help with online consumer privacy, third-party cookies have rapidly become an area of concern. Consumers are desperate for more transparency and understanding of exactly how and why their data is being collected.
It’s because of this that Google has made the decision to phase out the use of third-party cookies on its market-dominating browser, Chrome, by June 2023 – a step that browsers Safari and Firefox have already taken.
So, with no more cookies in the cookie jar, what will marketers do?
What this means for Advertisers
Currently, Google allows businesses to customise their display ad campaigns for people that have previously interacted with their website. These users can then be shown ads for the businesses, products, or services they’ve previously viewed, encouraging them to re-enter the sales funnel and convert. This is referred to as remarketing.
Alternatively, as mentioned in the Facebook example above, third-party cookies also help advertisers determine user interests. This means advertisers can show these users ads for brands they may not have previously engaged with, but that could be of interest based on their interactions with other brands in the same sector. This is known as prospecting.
However, the removal of third-party cookies from Chrome essentially means that Google will prevent marketers from collecting any more data through third-party cookies. Instead, businesses will have to use their own existing data, (data that’s already been collected), which will be cross-referenced with a database of over 1.5 billion Gmail accounts where account information is present. This data will then be upscaled using Machine Learning (more on this below).
This will mainly affect advertising campaigns focused on remarketing, or marketing to specific audiences, and will also impact how the success of campaigns can be measured.
Other options are available for marketers such as market research platforms and data-led tools. These platforms offer the chance to view audience insights that would otherwise be lost with the removal of third-party cookies.
Essentially, considering third-party cookies are currently the lifeblood of targeting for marketers, adjustments will need to be made for advertisers to continue reaching relevant audiences.
Fear not, though, because good old Google has a plan.
Google’s Plan For Leaving Cookies Behind
For over a decade, Google has been the market leader in online advertising. In fact, in 2021 alone, it accounted for 177.7 billion U.S. dollars in advertising revenue. The main driver of this revenue is businesses advertising through search ads, the Google Display Network (GDN), and other Google-owned properties, such as Google Maps, and YouTube.
However, the audiences Google creates within Universal Analytics that can be reached by advertisers through the GDN are built using third-party cookies. Therefore, with third-party cookies quickly becoming a thing of the past, Google’s ad revenue will drastically deplete without alternative tracking and audience-building methods being made available to advertisers.
To combat this, the search giant has made the decision to completely change the way marketers reach their target market by introducing a brand new version of Google Analytics: GA4.
Universal Analytics Will Soon Be No More, So Say Hello To GA4
In 2021, Google announced that they would be phasing out the use of Universal Analytics and replacing it with the newest version, GA4, by June 2023. In their announcement, they said:
“Universal Analytics was built for a generation of online measurement that was anchored in the desktop web, independent sessions, and more easily observable data from cookies. This measurement methodology is quickly becoming obsolete.”
On the switch to GA4, Google stated:
“To help you get better ROI from your marketing for the long term, we’re creating a new, more intelligent Google Analytics that builds on the foundation of the App + Web property we introduced in beta last year.
“It has machine learning at its core to surface helpful insights automatically and gives you a complete understanding of your customers across devices and platforms.”
Essentially, GA4 will still enable marketers to continue showing relevant ads to different target audiences, without relying on third-party cookie data. It promises to be the future of analytics, showcasing cross-platform tracking and AI-driven data, whilst offering a privacy-centric approach.
It’s worth noting that the effectiveness of GA4 is based on the amount of data that’s fed into it. Therefore, we recommend migrating to GA4 sooner rather than later. UA3 will still be supported up until June 2023, and both versions of analytics can be used in tandem up until then; by which point, you’ll already have a host of available data in GA4. So, if you want the best results with limited impact on your marketing operations, it’s vital to gain an understanding of, and migrate to, GA4 as soon as possible.
How Machine Learning Will Play A Leading Role In Analytics Data
Universal Analytics relies heavily on the collection of third-party cookies to create data sets. Because of this, advertisers have only ever been able to make reactionary decisions, (those based on data collected from previous user activity), about their marketing strategy. However, with the eradication of cookies rapidly approaching, these data sets will soon be incomplete.
To prevent this from having an impact on marketers everywhere, GA4 will use machine learning (ML) to fill the cookie-shaped gaps within analytics data.
ML combines artificial intelligence with computer science to complete data sets based on a sample of live data. It looks for patterns in user activity and feeds the information found into an algorithm, generating an accurate prediction of how users have behaved online.
In the case of GA4, the platform will take a data set consisting of 1,000 users. It will then analyse user activity over the last 28-day period, and upscale it, creating a complete analytics report.
This ML model keeps users anonymous whilst still allowing marketers to access user behaviour; something that’s essential for data analysis in a privacy-centric landscape.
Additionally, with GA4 utilising ML, marketers will have the opportunity to become proactive with their advertising efforts, rather than reactive; a huge change in the way analytics-backed decisions have been made so far.
This is because, along with having the ability to track users seamlessly across devices and platforms, GA4 will also be able to predict user trends and offer insights into potential changes in activity. These insights can be viewed by marketers who can use them to inform strategic marketing decisions that could positively impact ROI.
So, alongside ML, what other differences are there between Universal Analytics and GA4?
Key Differences Between Universal Analytics And GA4
There are numerous differences between UA and GA4, but we’ve rounded up some of the biggest changes below.
Users and Events
GA4 is built around Users and Events rather than Sessions.
In Universal Analytics, sessions consist of page views, events, interactions, and transactions. However, in GA4, everything that a user does whilst on a website or application is tracked as an event.
Once recorded, events can be used to populate user properties, ultimately helping to define audiences for remarketing purposes.
Moving to an event-based model means that GA4 is better able to predict user behaviour, offering more understanding of how users are interacting with websites and applications.
Within GA4, parameters can be sent with each event. These are pieces of information that can help specify exactly what actions a user took, or add further context to an event.
As an example, parameters can be used to provide information about the value of a user’s purchase on an e-commerce website.
Some parameters, such as page_title, are automatically sent. However, in addition to those automatically logged, GA4 users also have the ability to log up to 25 parameters with each separate event. This is a far cry from the three parameters available in UA.
Historically, it’s been a challenge to analyse a user’s transitions from a website to an application within Universal Analytics.
However, due to the fact that GA4 uses an event-based model that collects data across multiple platforms, this is no longer an issue.
Changing to this approach will improve the quality of the data being collected, and will also provide UA4 users with one single report across multiple user journeys.
In Universal Analytics, if a user found a specific product through SEO but then returned to purchase the product through a PPC search result, their conversion would be attributed to PPC. This is referred to as last-click attribution.
Instead, GA4 offers data-driven attribution (DDA) to determine which activities were the most influential in a user’s decision to purchase. This means, in the above example, the conversion would be attributed to both SEO and PPC, as both activities contributed to the conversion.
This new approach will allow marketers to optimise where channels are best positioned.
Another new feature that GA4 offers is lifetime values. The user lifetime property provides a multitude of metrics that offer insights into user behaviour across their customer lifetime.
This includes information like first and last purchase data, initial acquisition data, lifetime engagement, and lifetime revenue.
Being able to see which initial acquisition campaigns drove the most conversions gives business owners and marketers the insight needed to make decisions about upcoming acquisition activities.
Three predictive metrics are available in GA4 to track users who have been active in the last 28 days: Purchase probability, revenue prediction, and churn probability.
- Purchase probability refers to the likelihood that a user will make a purchase within seven days.
- Revenue prediction refers to the amount of revenue expected from a user within the next 28 days.
- Churn probability refers to the likelihood that a user won’t be active within the next seven days.
These metrics can be used by marketers to create predictive audiences who can then be targeted in Google Ads campaigns. As an example, users with a high purchase probability could be targeted with a remarketing campaign that encourages them to convert.
Overall, the removal of third-party cookies is one of the biggest changes to the digital advertising industry since its inception. But, with people across the globe fighting for more privacy online, it’s a vital step, and every marketer is in the same boat.
With Google having designed GA4 specifically for the cookieless world, marketers need not fear. Although the same data won’t be available, the introduction of machine learning and data modeling will actually offer new features, changing the way advertisers and marketers operate.
Get ready for cookieless advertising to become the new norm; make the switch to GA4 today.