The Death Of Cookies: Leveraging A Zero-Party Data Strategy
Ad spending in the digital advertising market could reach over $700 billion in 2023, and cookies have long been the lifeblood of the digital ecosystem. Cookies are simply a piece of data that a website can store in a user’s browser that allow it to remember information and preferences. The “crumbs” of data that cookies leave behind have enabled advertisers to track user behavior and serve targeted ads.
Many privacy advocates have long argued that cookies invade user privacy, and now their warnings are finally being heard. The three leading browsers—Apple’s Safari, Google’s Chrome and Mozilla’s Firefox—are all phasing out support for third-party cookies, as I’ve written about before, which means the cookie will soon largely be a thing of the past.
This means that businesses will need to find alternative ways to track user behavior and serve personalized messaging. One solution is to switch to zero-party data, which is data that users voluntarily share with businesses. (I offered tips for how to do this in a previous piece.) Let’s explore the implications of the death of the cookie and the opportunities that zero-party data presents for businesses.
Federal regulators have tried—and largely failed, according to Axios—to pass stricter privacy laws. This has led to state-level laws like those described by Axios that dictate how companies collect, store and share consumer data. Virginia and California are the first two states to implement their laws, with Colorado, Connecticut and Utah close behind.
In California, for instance, residents can now sue companies for data collection violations, while other states allow their attorney general’s offices to impose fines in the tens of thousands of dollars per violation.
California’s new regulations are enforced by the California Privacy Protection Agency, which was founded in 2020. With such an agency, California has more muscle available than other states to enforce its privacy laws.
Privacy laws can often come to a head against large tech companies, such as Oracle and Salesforce. In 2020, Oracle and Salesforce were hit with a $10 billion GDPR class-action lawsuit for holding information that users didn’t proactively consent to share and other alleged violations, although the lawsuit was later declared inadmissible.
In another case, multiple complaints were lodged against Meta, as users say they have received ads targeted at their private health information, which the cases allege violate laws related to invasion of privacy and consumer protection. The current patchwork of state-level privacy laws is a difficult landscape for businesses to navigate. While big tech lawsuits make the headlines, small businesses that use cookies are no less liable under these regulations.
New state-level regulations are just one force driving the death of the cookie. Browsers are also playing a role in the demise of cookies with features such as Safari’s Intelligent Tracking Prevention and Firefox’s Enhanced Tracking Protection, which make it harder for businesses to track users with cookies.
The dramatic shift away from cookies doesn’t mean that businesses have to start from scratch when it comes to personalization.
