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Why the Internet is Giving up On Cookies and How We Can Live Without Them

What are we talking about?

Cookies are being phased out by advertising platforms and companies like Google. The process of “removing” cookies has been going on for a number of years, but now it is directly affecting everyone: the companies themselves, the advertising platforms, the advertisers and the users themselves.

For the market and the internet in general, this is a big challenge and a big change.

First, let’s explain that there are two types of cookies:

  • 1st-party cookies – they store useful data for the user. For example, the preferred language, a successful login. In ecommerce, cookies also store data on the remainder of the goods in the shopping cart and more.
  • 3rd-party cookies are cookies that websites pass on to third-party advertisers for more accurate targeting. It is through third-party cookies that advertising systems know that since you bought rubber boots on one site, you should show an umbrella on another.

And now cookies of the third order are going to disappear. The reason for this is the growing trend towards greater privacy.

People want more control over their digital footprint. They want to take control of their data.

Against the backdrop of this trend, the EU, for example, passed the famous GDPR law — and now users are greeted on every European website by an ugly bar with several buttons: go ahead, choose what data about you you want to store on this site.

And how, does it make a big difference?

For the market, abandoning cookies is comparable to a meteorite hitting prehistoric earth. The dinosaurs are bound to go extinct, but they will be replaced by other species: faster and more adaptable.

Thankfully the meteorite has been falling for quite some time. For example, Apple disabled third-party cookies in Safari back in 2019. And while Safari has less than 10% of the share of desktop browsers, attribution in mobiles fell immediately 8% — Apple holds half the share of mobile browsers.

In 2023, with Google’s abandonment of third-party cookies, publishers could lose tens of billions of dollars a year. This is spurring the industry to use other solutions.

Man, it turns out advertising will be less accurate now, doesn’t it?

Yes, definitely — targeting ads will be more difficult.

Some users will probably see irrelevant ads more often.

But this won’t last forever.

Today’s publishers use very powerful advanced targeting systems that can more accurately predict online users’ interests and behaviour without third-party cookies. Predictive models are used to do this, which take into account the available data.

For example, a publisher predicts that a user living in an elitist area of London with default English on their device is more interested in renting a private jet than a radish in bulk. This is of course an abstraction, but the principle is true — and advertising systems make billions of such predictions a day without any cookies.

Well, what about the login’ in?

There will be more “one button” local logins. In Russia, Tinkoff, Yandex and Sber already have such systems — and there will only be more.

As a result, large companies will create their own “safe pools”. You will be able to log in via Yandex ID, and you will no longer need a password or login. And sites and services will not only recognise you quickly, they will also give you new services that are currently unavailable. For example, pay for goods and services with a single button.

Smaller companies are lobbying for the introduction of Unified ID 2.0. True, its implementation prospects are still vague — users don’t like to leave an email address for authorization on the website, and nothing will work without email.

And large companies can also use the data they receive in “clean rooms” — to share information with each other.

What other “clean rooms” are there?

In such ‘rooms’, companies enrich their own data with data from other advertisers – usually from closed ecosystems. This allows for insights and evaluation of advertising effectiveness. However, neither party is allowed to use the other party’s raw data outside of this space.

Publishers (or their associations) and advertisers already use ‘clean rooms’ in a similar way to get new insights and valuable information from user data. This has the potential to enhance individual targeting, attribution between brands and publishers, and gain insights based on combined information from different devices. And all this without data security risks.

Well, it doesn’t look that bad…

That’s right, publishers and advertisers are adapting to the new environment. Technology is helping – it’s as if the world has been used to using old-fashioned cookies for years, and has been resistant to using new, modern personalisation technologies.

And the abandonment of cookies will also benefit the quality of content. Content in general is coming to the fore as a sales tool, especially authorial and personalised content. Models like ChatGPT can help create such content, but that’s another story…

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