What is a cookie?
The mother of all cookies, Google, is probably in the best position to provide a concise definition. They explain that a cookie is “a small file saved on people’s computers to help store preferences and other information that’s used on webpages that they visit.” Both Google Analytics and Google Ads use cookies to provide their services, such as tracking user insights and delivering digital adverts to the desired target audience.
First-party vs third-party
If you place a cookie on a user’s device, it’s a first-party cookie and will still be allowed. Information collected might include:
- Identify returning visitors to your website
- Save what a user put in their online basket
- Auto-complete forms for users
- Save user preferences
- Keep users logged-in
If the cookie then follows the user around the web, or it isn’t your own cookie, it’s a third-party cookie and will no longer be allowed. Information collected is used to:
- Improve targeting for digital ads
- Make remarketing possible
- Better understand the customer journey across different websites
Why is Google getting rid of cookies?
Concerns around privacy and cybersecurity have been growing steadily and are now finally being addressed by tech giants like Google. According to a recent study by Pew Research Center, 81% say that “the potential risks they face because of data collection outweigh the benefits.” Google – or Chrome specifically – are therefore phasing out support for third-party cookies to provide users with a safer (or at least perceived safer) browsing experience.
Google believe that “people shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.“
Of course, Google’s decision is not purely altruistic. They understand that with increasing regulatory restrictions, alternatives to cookies are not a sustainable long-term investment.
What are the alternatives?
Other providers are considering hashed emails as an alternative to conventional cookies. In this approach, e-mail addresses are made unrecognisable by transforming them into hexadecimal strings, using an algorithm. This value cannot be traced back to any individual, but the associated user data (such as browsing behaviour and other analytics) can be used by marketers. Google will not replace cookies with alternative user-level identifiers, such as hashed/encrypted email addresses.
Google recently introduced the Privacy Sandbox in order to replace cookies with privacy-first alternatives. The idea is based on Federated Learning of Cohorts (FLoC), which works by clustering large groups of people with similar interests and making them “one of many” in a non-identifiable crowd. This information is then stored on the user’s device, rather than within the advertising or analytics platform.
Regarding analytics and measurement, Google is currently trialling event-level reporting for measuring click-through conversions. As this approach will add noise and limit the amount of conversion data that can be collected at a time, “advertisers will have to prioritize which conversions are most important for their reporting needs.”
Remarketing poses a different challenge but is being tackled by allowing advertisers to create and deploy their own audiences, again without the use of third-party cookies. In order to target users who have previously visited a certain website, the idea of “trusted servers” is being discussed.
How will this impact digital advertising?
In theory, the impact on digital advertising should not be too noticeable in the long run. Of course, numbers will likely dip, but I do believe that they will relativise over time and provide a great return for advertisers.
Google claim that while there will be changes to the advertising environment, they will still be able to deliver results for advertisers and publishers. This promise is based on the development of privacy-preserving APIs that prevent individual tracking but still provide enough insight to provide a reliable ROI for advertisers. Conversions are estimated at around 95% of their current conversions, but of course, this very much depends on the audience and strength of the clustering algorithm.
How does this change affect hotels and travel businesses?
Without cookies, the focus is likely to shift to email marketing. This involves using a suitable CRM (customer relationship management) system, which could range from MailChimp to a custom solution, depending on your needs. In conjunction with this, you will need to collect relevant email addresses wherever you can, while complying with the GDPR.
Further, with 66% of global web users using the browser Google Chrome, Google Search Marketing will also become more relevant.
Facebook recently introduced a first-party version of the Facebook Pixel (their version of a cookie) so marketers can continue to collect and utilise certain data. This might make Facebook Ads even more attractive as an advertising platform.
If – as currently uncertain – remarketing remains an option, it will likely continue to play an important role too. Retargeting is 10 times more efficient than other ad placement strategies, as the guest has been to your website before and is therefore potentially at a very different stage of their booking journey.
The web might change to a ‘logged-in environment’ where users are identified using their (unhashed) email address – like we already know from social media, Google Chrome and Amazon Prime. The big advantage of a logged-in environment is that it exists across devices. So – in theory – you should no longer see a hotel ad on your phone after just having booked a room at that same hotel on your laptop.
While the whole cookie situation remains somewhat uncertain, the key takeaway is to continue to not put all your eggs in one basket. Prioritise a holistic or integrated marketing approach across the entire funnel to optimise your direct booking strategy.
Not sure how all of this impacts your business?
We’re happy to help with adjusting your digital strategy and implement suitable ads. Head over to umidigital.co.uk/services/digital-advertising or email hello@umidigital.co.uk to have a chat.