Measuring the effectiveness of web marketing: What are the alternatives after cookies are abolished?

As an important topic in the digital marketing field, third-party cookies are likely to continue to be a trend even in 2023. This is because third-party cookies, which have been in use for about 30 years, are gradually reaching the point of retirement. Major web browsers such as Safari and Firefox already block third-party cookies by default, and Chrome (Google)Phased out in mid-2024Is scheduled.

Until now, third-party cookies have been an essential source of information for digital marketing, collecting information about user behavior across websites. So what happens when third-party cookies go away?

In this article, we will explain the background to the abolition, understand the impact it will have on your existing digital marketing activities, and introduce several alternative methods for measuring the effectiveness of your web marketing.

Important point

• Why are third-party cookies being phased out?
  • This is because it has been pointed out that individual behavior can be tracked online, posing risks in terms of privacy protection.
• When will cookies be phased out?
  • Its use has already been restricted in some web browsers and on iOS.
  • It is scheduled to be phased out in Google's Chrome browser in mid-2024.
• What impact will cookie removals have on marketing?
  • The biggest impact will be on targeting and retargeting ads to individual users, and measuring their effectiveness.
• What are the alternatives to cookies?
  • Conversion APIs from major platforms (Apple, Google, Meta, etc.)
  • Cookieless attribution methods (ID solutions, fingerprinting, zero- and first-party data, etc.)
  • Measurement method that doesn't require user data: Marketing Mix Modeling (MMM)
• Which alternative is most effective?
  • Given the technological and legal uncertainties, the realistic answer is that there is no viable alternative.
  • There is no alternative (due to privacy reasons) that can replicate the amount of information and coverage available through third-party cookies.
  • Rather than relying on just one alternative, it is a good idea to consider a diversified approach (e.g., using the conversion API of the relevant ad platform in parallel with MMM and conducting integrated analysis in MMM).

The reason behind moving away from third-party cookies

There are several factors that led major web browsers to decide to drop support for third-party cookies, including GDPR, ad blocker plugins on browsers, and policy changes within the web browsers themselves.

Under the GDPR, the use of cookies has become an opt-in system, making it increasingly difficult to track user behavior using cookies.

Major web browsers such as Safari, Firefox, and Chrome already have some measures in place regarding cookies. User privacy has become more important and people are more willing to respect it.

Justin Schuh, former director of Chrome engineering at Google, said:Chromium Blogsaid:

"Users are demanding greater privacy–including transparency, choice and control over how their data is used–and it's clear the web ecosystem needs to evolve to meet these increasing demands." Justin Schuh

Users are demanding greater privacy - transparency, choice and control over how their data is used - and it's clear that the web ecosystem needs to evolve to meet these growing demands.

How will a cookie-free future impact digital marketing?

After the abolition, it will no longer be possible to utilize the behavioral history of individual users stored in third-party cookies. In other words, it will no longer be possible to use information on interests and attributes based on which pages were viewed on which sites, individual users' cookie IDs for targeting and retargeting, or to measure the effectiveness of conversions and purchase completion pages through cookies.

If you still rely on third-party cookies to measure the effectiveness of your web marketing using Google's Universal Analytics, you'll need to consider alternatives that don't require the information captured by cookies.

After the abolition of third-party cookies, you will have multiple options to measure the effectiveness of your digital marketing, evaluate the cost-effectiveness of your online advertising campaigns, and plan your budget.

Each has different features, advantages and disadvantages, but here we will look at the main alternatives to third-party cookies.

Alternative 1: Proprietary conversion APIs offered by companies like Apple, Meta, and Google

Most browsers and platforms are developing alternatives to third-party cookies.

Apple has already stopped using third-party cookies in apps (iOS) and browsers (Safari) and is rolling out the Apple Identifier For Advertisers (IDFA is a device ID that Apple randomly assigns to users' iOS devices). Since IDFA is an opt-in system, it can measure the behavior and conversions of only users who have given their permission (about 2% of iOS users). In addition, there are alternatives from Apple, such asSKAdNetwork APIBy using a certified ad network that uses , you can measure the number of app install conversions from ads on the App Store, as well as the number of impressions and clicks on the ad before that (no targeting functionality).

Google is testing several proposals for alternatives to ad relevance and measurement for some Chrome users.flockとTopics, for retargetingFLEDGE, and conversion measurementAttribution Reporting APIIn order to protect user privacy, none of the proposed APIs reproduces all the functions of third-party cookies on their own. Google is considering linking them in the future, but this is not yet possible.

Next, Meta (formerly Facebook)Conversion APIIf conversions cannot be measured through the Meta Pixel because users have opted out of tracking, Meta's Conversion API allows advertisers to send additional data from their servers (first-party data, such as CRM) to Meta to identify conversions (such as the converting user's email address, name, and/or phone number). Meta's Conversion API is governed by Meta's User Privacy Policy and is available in the Meta Ads Manager.

All of these alternative solutions offer hope in an uncertain cookie-less era, but for now they remain confined to their respective platform ecosystems, and while the future of data connectivity and coexistence between various APIs remains uncertain, they all seem to have limitations and drawbacks for businesses that rely on multiple web advertising channels on a daily basis.

Alternative 2: Cookieless Attribution

Attribution ModelWhile attribution methods (such as last click and first click) have relied on third-party cookies to identify web users and provide conversions to marketers, there is a demand for attribution methods using data other than cookies.

Common ID Solution

A shared ID solution is an ID system for advertising that is based on first-party data such as email addresses, and allows advertisers and advertising media to measure the behavior and conversions of users who have advertising IDs. The Trade Desk's Unified ID 2.0 is one representative example, but it is considered a difficult method to implement because it requires obtaining permission from users to obtain and share their advertising IDs.

Fingerprint

Device and browser data of users who visit a website (such as IP address, screen pixel count, browser language, version, and other settings) can be obtained as attributes and used to identify users by matching them with the first-party data of users who converted, like a fingerprint. Since fingerprinting uses data without the user's consent, there are concerns that it may become subject to legal regulations in the future. Google has already disabled fingerprinting in its Chrome browser, and Apple has also announced that it will no longer support it.

Zero-party data

Zero-party data refers to personal data that a user has voluntarily (intentionally and actively) given in exchange for some kind of compensation from an advertiser. There are various ways to obtain zero-party data, such as participating in a reward point program, applying for a survey, participating in an event, applying for a gift, coupon or sweepstakes, etc. As a type of first-party data, companies can individually market to users with whom they already have information or contact.

The amount of user data available through third-party cookies is likely to shrink with any cookieless attribution method, meaning the comprehensiveness of the insights you can extract from attribution analysis will likely decrease along with the amount of data.

Alternative 3: Marketing Mix Modeling (MMM)

Marketing mix modeling (MMM)is a statistical analysis method used to understand the impact of marketing activities on business outcomes such as conversions and sales.

Because MMM does not require data such as third-party cookies or personal information, it is attracting considerable attention both domestically and internationally as a valid alternative method of measuring effectiveness in the post-cookie era.

It quantifies how much advertising measures, promotions, prices, etc. contribute to business results as one element of the marketing mix. MMM also supports the analysis of the effectiveness of offline marketing activities, and can also incorporate data on external factors such as weather, macroeconomic indicators, major market fluctuations (e.g., the covid-1 pandemic), and competitor promotional activities, making it possible to gain a more comprehensive understanding of the factors that make up business results.

By quantifying the overall effectiveness of marketing and the synergistic effects between strategies, we can generate scientific insights to optimize marketing investments.

However, while it doesn't rely on third-party cookies, it does require historical data to build its models. Depending on the size and type of business, it is recommended to have one to several years of data history (ad volume, costs, results, etc.).

Summary: Measuring Marketing Effectiveness in the Post-Cookie Era

As part of a sensible, global effort to improve web user privacy, the time has come for the phase-out of third-party cookies, which will impact how digital marketers target users and measure the effectiveness of web advertising.

Key players in the ecosystem, from platforms to advertisers, are considering or developing alternatives to third-party cookies to measure and improve the performance of web advertising.

In this article, we have looked at the main alternative options, but the reality is that there is no way to perfectly reproduce the functions of third parties due to the background of the initiative (improving web user privacy). Some solutions are closed to one advertising platform, some methods are unclear whether they can be used continuously, some require a lot of effort to collect and manage data, and some require past data.

Depending on your company’s needs and resources (money, talent, expertise), it’s a good idea to consider running multiple alternative methods that fit your marketing activities (which ad platforms are you advertising on? Are you also running offline ads? Can you leverage first-party data?).

For example, you could leverage proprietary methods from Apple, Meta and Google while also using MMM to integrate and analyze advertising volume and cost data from each platform. This would provide a comprehensive view of the overall effectiveness of your marketing across advertising channels, allowing you to make more informed decisions about strategy, budget allocation, etc.

Considering MMM as a foundation for measuring marketing effectiveness in the post-cookie era

Our company, XICA, has accumulated over 10 years of experience in the field of data science in marketing, and has been developing and providing MMM services using our own proprietary technology and algorithms for over 5 years, with a track record of doing business with over 250 companies, mainly major corporations.

In the post-cookie era, we will support you in the design, construction, implementation and operation of an MMM that is effective for your company, focusing on measuring the effectiveness of your entire marketing activities, including digital advertising, forecasting results and optimizing budget allocation.

Our companyFor more information about the MMM service "MAGELLAN," click here .

Also, if you would like to consult with us about implementation, please feel free to contact us.Contact us.

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XICA Co., Ltd. Marketing Team