Hands holding a handful of rainbow sprinkle cookies

The end of third-party cookies signifies a shift toward greater privacy protection

Do you remember when Google announced their plan to phase out third-party cookies in Chrome, in 2020? Well, their plans are on track and the phase-out will begin in Q1 2024. This will essentially put an end to cookie-based advertising.

For brands who rely on third-party cookies for digital advertising, this means drastically changing their strategy. For consumers and web users, this change signifies a welcome and well-overdue shift toward greater privacy protection online.

In this blog, we discuss how and why brands must put privacy at the forefront of online experiences, amid a digital landscape that is drastically changing.

Key points:

  • Privacy-conscious consumers are demanding greater transparency and want more control over how their data is used
  • A transformation is unfolding in the online data environment where for years, brands have used third-party cookies as a key part of their digital advertising strategy
  • Brands need to rethink how to prioritise privacy to gain and keep consumer trust

How do third-party cookies fit into the mix?

Cookies are small pieces of data stored on a user’s device by websites they visit. These data files serve purposes including improving the user experience, remembering user preferences, and tracking website usage. Websites use cookies to store information about a user’s session including login credentials, language preferences, and items in a shopping cart. There are different types of cookies, including:

  1. Session cookies: These are temporary cookies that are erased when the user closes the web browser. They are used to store temporary information, such as a user’s session ID, which is necessary for the proper functioning of certain website features.
  2. Persistent cookies: Unlike session cookies, persistent cookies remain on the user’s device even after the browser is closed. They have an expiry date and are often used to store information such as login credentials or user preferences for future visits.
  3. First-party cookies: These are set by the website the user is visiting. They are commonly used for purposes like remembering user preferences or maintaining a user’s logged-in state.
  4. Third-party cookies: Third-party cookies are the mechanism that enables cross-site tracking and several major browsers. These are set by domains other than the one the user is visiting. Third-party cookies are often used for tracking and advertising purposes. Advertisers and analytics services may use them to collect information about a user’s browsing habits across different websites.

Advertisers have long relied on cookies to track customers, display targeted advertising, and tailor customer experience. With a series of recent high-profile data breaches in Australia, it’s no surprise customers want greater control over how their data is collected and used.

Consumers want greater control over privacy. Image by John Schnobrich via Unsplash.

The Optus breach in September 2022 impacted 9.8 million customers, Medibank in December 2022 impacted 9.7 Million people, and the Latitude breach in March 2023 impacted 14 million customers, according to Upguard.

Ensure you obtain informed consent before collecting data:
  • You must obtain customer consent before any sort of data collection
  • Provide transparent information about how data will be used, stored and protected, so customers understand what they’re consenting to
  • Your privacy policy must be designed in line with relevant requirements, including those set out by the Australian Information Commissioner

A greater demand for privacy

Three-quarters of Australians feel data breaches are one of the biggest privacy risks they face, according to the latest Australian Community Attitudes to Privacy Survey, released in August 2023. That is an increase of 13% since the survey was conducted in 2020.

Google says their phase-out of third-party cookies is an effort to better protect user privacy. With the impending phase-out currently on track to be complete in 2024, a significant transformation is unfolding in the Australian data environment. Safari and Firefox have already undertaken similar actions and with Google Chrome owning most of the market share, its phase-out will essentially render third-party cookies redundant.

Google says their phase-out of third-party cookies is an effort to better protect user privacy, image by firmbee via Unsplash.

“As part of the Privacy Sandbox project, Chrome is phasing out support for third-party cookies and proposing new functionality for cookies along with purpose-built APIs to continue supporting legitimate use cases while preserving user privacy.” Privacy Sandbox project

As more and more consumer data is collected, tightening up data control is of increasing importance. Privacy laws are rapidly changing to accommodate the fast-paced digital landscape and brands must ensure that they stay up to date with all relevant guidelines. In Australia, businesses are required to protect customers’ personal information. Those with an annual turnover of $3 million or more must comply with the Privacy Act and small businesses with an annual turnover of less than $3 million still have obligations. Depending on business activities they may also be required to comply with the Act.

Ensure customers are aware of how data will be stored:
  • When privacy policies are changed or updated, this must be proactively communicated to customers, ensure you lay out what has been updated and why it is taking place
  • To increase confidence and trust, provide clear pathways for customers to revoke or change consent

Brands that place transparency at the centre will gain trust over the long term

As brands re-strategise their digital advertising approach, those who prioritise transparency will gain and hold customer trust. Brands should make it easy for users to understand what information they collect, how their information is stored, and what the company is doing to keep it secure, as well as providing clear pathways to change or revoke consent.

Are you eager to prioritise privacy as part of your digital brand experience? Contact our team at Focused Marketing and make it happen!