Cookie Apocalypse: Survival 101 for Marketers and eCommerce Businesses
Your delicious baked goods aren’t going anywhere for a long time.
And marketers: now’s not the time to hunker down in your doomsday bunkers.
The Cookie Apocalypse is upon us and here’s what that means for the eCommerce sector.
After years of debate over customer privacy, tech companies led by Apple and Google are taking decisive action to limit marketers’ ability to deliver tailored ads and track online user activity through third-party cookies.
Dun dun dun… The repercussions are immediate and far-reaching. But this isn’t the end of the world.
In fact, it’s a new world. A privacy-led one, where eCommerce companies and marketers will need to make root and branch changes to their digital strategies to adapt to the new restrictions.
2. The Backstory
Can you even remember a time when cookies and the Internet weren’t a thing?
Cookies were originally introduced in 1994 as a piece of code to allow websites to remember how many unique visitors they were getting.
Later on, eCommerce companies and advertisers adopted this practice to improve user experience; by keeping shopping carts up to date, for instance, and enabling return customer visits without having to log out; and to track and advertise to audiences.
Fast forward a couple of decades and the role cookies play online feels much less benign.
These small pieces of code now follow you around the internet, building a unique profile of your online activity that marketers can use to target you with products and services.
Companies trade cookie data (second-party cookies) and accumulate personal data from across multiple websites and web publishers (third-party cookies), which ultimately has led to calls for stronger, more comprehensive regulations to protect user privacy.
The so-called Cookie Apocalypse really began in 2019, with Safari and Firefox blocking third-party cookies by default across its web and mobile browsers.
But it’s the launch of Apple’s iOS 14.5 update earlier this year that has really sent marketers running for the lifeboats, soggy UX reports in hand.
This time in-app third-party cookies are in the firing line, with developers required to give users the opportunity to opt out of tracking entirely, and severely limiting the data available to marketers even from those customers who do choose to opt in.
3. What You Need To Know
- Soon it will become all but impossible to fully track a customer’s digital journey across the internet: undoubtedly a seismic shift in the advertising landscape. But roadblocks to better customer centricity are nothing new, and marketers have had a lot of practice adapting to enhanced data privacy regulations. Change is good!
- Now’s the time to permanently break your third-party cookie habit and focus on building real, sustainable relationships with your customers.
- True, it just got a lot harder to gather information on customers’ needs, interests and intent. But understanding your company’s relationship with its customers should remain the beating heart of your digital strategy. You’ll need to master that process like never before to stay on top of these changes.
- Don’t forget: this may be the end of cookies as we know them, but cookies were never a magic bullet. Cookie match rates (used by DMPs and DSPs to sync user data) range as low as 40-60%, leading to considerable amounts of mistargeting and wasted ad budgets. And since cookies are device-based, it was baked into the process from the start that companies would get a disjointed and incomplete understanding of the customer journey across different interfaces and browsers.
4. The Solution For Marketers
It’s time to go back to basics.
Many eCommerce marketers will have had no first-hand experience of working in a world without third-party cookies, and almost every company’s digital strategy will need to be redrawn, revised and refined.
The coming 18 months will undoubtedly be a time of considerable uncertainty for marketers - not least because of Google’s recent surprise decision to postpone its abolition of third-party cookies to 2023.
On the one hand, marketers have been given more time to develop and test new ways of navigating cookie loss, and to understand its impact on their business.
On the other hand, businesses now face an even longer period of limbo and uncertainty over what further developments could affect their planning, their growth targets and the bottom line.
But you can (and must) use this time productively, and take the following steps to prepare for the inevitable post-cookie world:
Content is (still) king!
A lot of the messaging coming out of this year’s Ecom World 2021 was clear: now is the time to invest heavily in a strong creative strategy and powerful, eye-catching content.
‘It’s time to go all-in on content,’ declared Pixelhaus and SheCommerce Founder & CEO Mirella Crespi, noting that: ‘If there is one thing you can control, it’s your ad creative.’
Control is the key word.
Marketers have had to learn to be reactive throughout the Cookie Apocalypse, and will undoubtedly continue to be as new challenges emerge.
But you can only stay on the back foot for so long.
Proactively developing fresh strategies and new ways of empowering your business - regardless of the latest pitched battles between the tech giants - is key for 2021 and beyond. Delivering relevant, customer-focused content will be a huge part of that.
- The generic, catch-all retargeting ad is dead, and marketers need to focus their efforts on delivering eye-poppingly good content that motivates consumers to engage with their brand, guiding them from their first off-site engagement right through to purchase. Apply a test and iterate model to your ad content; find out what works for your customers and your business.
- The message from customers themselves is clear: the traditional advertising model no longer works for them. Online users want to see simple, personalised and entertaining content that adds value without being subjected to intrusive targeting methods. Making this approach work at scale - without incurring crippling personalisation costs - is a challenge for sure, but the payoff is consistent ROI well beyond the initial date of investment.
- If content is king, then social is increasingly proving to be the kingmaker. With a 16.4% increase in social media usage year-on-year, more and more companies are developing brand awareness strategies based around influencer marketing and user generated content (UGC). As the digital ad landscape fragments even further, marketers can tap into the thousands of individual consumer ecosystems built around specific product pillars, where unboxing videos, product reviews and demos, testimonials and video and photo content are viewed, shared and rated by a highly engaged, motivated viewership.
The idea of adapting to a cookie-less future may feel disorienting, but marketers can take control of the process by focusing on the fundamental, evergreen aspects of their offering.
Quality creative and dynamic, fresh content will be a key deciding factor between eCommerce success and failure for the foreseeable future.
Contextual advertising is the next-best option in a world without third-party cookies.
It’s essentially the process of displaying ads that are relevant to the keywords and/or content on a given web page. Think shoe ads next to an article on foot health, or ads for protein powder on a gym website.
What the visitor is seeing has little to do with their historical online behaviour, and more to do with the environment they’re in.
- The industry is once again returning to tried-and-tested ways of doing things, but the appeal here is that keyword-based targeting requires no cookies to function. It’s a cleaner, more streamlined and potentially more cost-effective way of targeting customers.
- Contextual targeting solves many of the post-GDPR compliance issues marketers are faced with regarding personal data. But Google’s restriction of contextual data in its programmatic auctions (aimed at minimising browser fingerprinting) shows that even contextual may not be spared in the ongoing battle over user privacy.
- Contextual ad campaigns are cheaper and easier to implement than behavioural campaigns, with fewer tools and resources needed to optimise your strategy. In particular, SMEs with limited budgets will find it easier to target their customers with contextual ads in this new post-cookie world.
- Whisper it, but using contextual ads may actually be more accurate at targeting your potential customer base with relevant content. While a behavioural strategy takes into consideration a user’s past actions and segments them accordingly, previous activity doesn’t necessarily indicate purchase intent - or even interest. Serving visitors with ads that meet their immediate needs and requirements, based on the specific page they’re viewing, is potentially a much more practical and cost-effective approach.
- As brands seek to build more meaningful relationships with their customers, contextual advertising offers a far less intrusive and less ‘creepy’ way of engaging and retaining customers. Users see relevant content appropriate to their immediate interests without the sense of being continually ‘followed’ around the web by brands. Achieving authenticity in both user experience and brand communication will be central to how marketers navigate the re-adoption of contextual targeting.
- Almost all of your competitors are making this adjustment right now, and while we seldom recommend following the crowd, this is one strategy you should definitely be adopting!
Cookieless tracking: FLoC and GA4
As we progress towards a more privacy-oriented web ecosystem, marketers will continue to have to find new ways of navigating the real-world implications of the tech giants’ shift towards the rights of individual web users.
Of course, this shouldn’t be confused with a move away from narrowly commercial interests: there’s no appetite to bite the hand that feeds.
The Cookie Apocalypse does throw up huge challenges to advertisers, but the likes of Google and Facebook believe they have the answers the embattled ad tech industry is looking for.
And unsurprisingly, the solution they’ve come up with is (drum roll).. greater technical and functional integration into their respective infrastructures!
It’s fair to say those walled gardens just got a little more, well, wall-y.
FLoC (Federated Learning of Cohorts)
Safari and Firefox may have already both banned third-party cookies, but in terms of market share it’s Google’s decision to set out a roadmap to a cookieless future on its Chrome browser that’s the big news story.
Having declared that it won’t simply be replacing third-party cookies with ‘alternative identifiers to track individuals as they browse across the web’, Google announced a set of technologies as part of its Privacy Sandbox that it claims will let publishers and advertisers run interest-based ad campaigns targeting users based on specific demographic indicators, while allowing those targeted to retain anonymity.
What is FLoC?
FLoC (Federated Learning of Cohorts) is a suggested new browser standard (currently in the testing stage) that analyses a user’s web activity locally, assigning them a unique FLoC ID and grouping them into cohorts alongside several thousand other people based on their interests. Ads can then be aimed at these cohorts without compromising user privacy.
Google says that:
- FLoC is capable of providing ‘an effective replacement signal for third-party cookies’.
- Results from simulation testing in Google Audiences indicate that advertisers can expect to see ‘at least 95% of the conversions per dollar spent when compared to cookie-based advertising.’
- ‘Technology advancements such as FLoC, along with similar promising efforts in areas like measurement, fraud protection and anti-fingerprinting, are the future of web advertising - and the Privacy Sandbox will power our web products in a post-third-party cookie world.’
What’s certain is that your FLoC ID code will essentially still be a semi-opaque record of your activity on the web.
Consequently there has been significant pushback on the announcement.
Microsoft, Mozilla and DuckDuckGo have all said they won’t support FLoC. The EFF (Electronic Frontier Foundation) went further, urging the industry to reject Google’s ‘terrible’ proposed new standard in its entirety. It warned that:
‘Google’s pitch to privacy advocates is that a world with FLoC (and other elements of the “privacy sandbox”) will be better than the world we have today, where data brokers and ad-tech giants track and profile with impunity. But that framing is based on a false premise that we have to choose between “old tracking” and “new tracking”. It’s not either-or. Instead of re-inventing the tracking wheel, we should imagine a better world without the myriad problems of targeted ads.’
There is clearly some way to go before FLoC passes the industry acid test and proves its worth as a viable alternative to third-party cookies.
Google itself has acknowledged that legitimate concerns remain around vulnerability to third-party identifiers and fingerprinting, and has pledged to address the issues.
For now, interested marketers can decide for themselves and apply to take part in Google’s FLoC origin trials here.
GA4 (Google Analytics 4)
Google’s new and updated GA4, formerly known as App + Web, marks the most significant and transformational development the platform has ever seen.
It currently runs alongside - but doesn’t replace - Google Analytics 3; although there won’t be any further updates to GA3 so marketers will need to make the switch eventually.
The system uses AI to enable machine learning and statistical modelling - ‘blended data’, in Google’s terminology - to fill in the data gaps caused by loss of third-party cookies.
- GA4 tracks User ID instead of cookies. To optimise Analytics marketers should enable a script in a tag management system such as Google Tag Manager. This creates a randomized Client ID on each page unload, allowing tracking but anonymising your customers’ data trail.
- With data layers, GA4 users can track any event on their website. Setting up data layers correctly - and formalising the reporting process - will be extremely important for eCommerce businesses. It takes some getting used to, but the pay-off is worth it.
- GA4 anonymises IP by default but in some specific circumstances - particularly when connecting to other platforms - still likely falls foul of GDPR privacy regulations. Marketers should either (a) disable Google Analytics from firing the GA4 tag until the user has explicitly consented, or (b) allow the GA4 tag to fire but only collect aggregated statistical data until the user consents.
- GA4 currently runs in tandem with GA3, so marketers starting to work on the new platform should maintain their UA properties to get a better understanding of their data.
- Marketers who do decide to move over to GA4 should first run a full technical audit of their existing Google Analytics implementation. Identify any potential areas where you risk losing data, and adjust your transition planning accordingly.
Nail your post-cookie attribution process
Ecommerce attribution largely relies on cookies and is often based on modelling that doesn’t always reflect the realities of the situation, but in a cookieless future you can expect even greater hurdles to achieving accurate attribution.
What is attribution?
Attribution is the process of identifying which marketing activities and customer touchpoints are contributing to conversions. A well-crafted attribution strategy can help you understand the value and impact of your marketing channels and campaigns, and fundamentally let you know whether you’re spending your money wisely or not.
Marketers are increasingly faced with mapping a customer journey that includes numerous site visits across multiple devices and browsers, let alone attributing signals from the myriad ad channels users might be exposed to, for instance:
- Paid Social, Organic (SEO)
- Paid Search (PPC)
- Display Advertising
Here’s a breakdown of traffic once Chrome ends its use of third-party cookies:
Only about 5% of traffic will be from ‘authenticated’ users - those who have specifically granted advertisers permission to track them with an identifier tag.
The remaining 95% of traffic will therefore come from anonymised users, and it is this vast majority of traffic that presents an acute problem as we move past cookie use. Blind spots on the conversion path were a certainty even before factoring in cookie loss, making it even more important to get the fundamentals right.
- Running a multi-touch approach (rather than relying on single-touch data points like first-click, last-click - currently all that is offered in GA4) will give you a greater data spread and a better shot at granularity.
- Be led by the data, and avoid guesswork. Use Google Analytics and its reporting functions (like the ‘Top Conversion Paths’ option) to fill in the new gaps in your Facebook reporting.
- Fix integration issues by analysing your conversion data, identifying any missing touchpoints on your conversion path and optimising funnels accordingly.
- Track campaigns across marketing channels using UTM parameters to set custom URLs; auto-tag in Adwords, Double Click etc.
- Consider the LTV (lifetime value) of each of your customers and identify the top 1%. Their conversion journey often falls through the cracks and you’ll need to analyse your entire funnel to see where this is happening.
For post-cookie attribution, conversion modelling will be one of the keys to unlocking accurate measurement.
Philip McDonnell, director of product management at Google, defines conversion modelling as ‘the use of machine learning to quantify the impact of marketing efforts when a subset of conversions can’t be observed.. With a modelling foundation in place, observable data can feed algorithms that also make use of historical trends to confidently validate and inform measurement.’
- The death of third-party cookies will make the use of machine learning in conversion measurement much more commonplace.
- Factoring modelling into your attribution strategy now - and customising those models to each of your campaigns - will allow you to pivot faster when data gaps do emerge
- Marketers will need to leverage data-driven approaches to achieve more granular audience segmentation. As long as it's through privacy-compliant processes, the more of your customers’ information you can gather, the more comprehensive your understanding will be.
- Prioritise scale and quality. Achieving a rich customer data set from across devices, platforms, browsers and operating systems will improve the reliability of your modelling.
- Conversion modelling can even allow marketers to quantify the effectiveness of an ad by differentiating between the impact of its creative content and the impact of the accuracy of its targeting. This information can then be fed back into your marketing strategy.
In the impending post-cookie landscape, one thing’s for sure.. attribution isn’t going to get any easier.
But as one door half-closes, another opens.
The industry may in the end choose to move beyond the almost limitless possibilities of machine learning and algorithmic data processing, towards a simpler solution: go where the attribution is easiest.
And as always, that brings the focus back onto the tech companies.
In managing their own ecosystems, where authenticated users can be tracked through their email addresses - submitted voluntarily as a condition of service use - Google, Facebook, Microsoft and others have created walled gardens whose contents will be increasingly appealing to advertisers.
Apple is rumoured to be building its own search engine; Facebook could follow.
Attribution strategies may well focus more on building relationships with publishers with available inventory, and developing privacy-compliant, consumer-friendly campaigns for a captive audience.
Which brings us to...
5. The Solutions For eCommerce Businesses
The ongoing conversation surrounding the Cookie Apocalypse will feel intimidating and confusing to many eCommerce business owners.
Even our heads were reeling at one point.
The stakes are high, not least because the actions of a few global companies continue to have far-reaching implications for the way businesses of all sizes achieve scalable, sustainable growth.
It’s easy to lose sight of the bigger picture in all of this, but it should be comforting to know that even the best resourced eCommerce businesses are still struggling to put in place sufficient safeguards against cookie loss.
In fact, most appear to be failing to achieve many of the fundamentals we’ve talked about here.
That’s pretty extraordinary, and all the more reason to ensure your company’s well prepared to meet the Cookie Apocalypse head on, before your competitors do.
Here are some top tips on how eCommerce companies can face down the Cookie Apocalypse:
Nail your first-party data strategy
First-party data is the new cookies.
Google, Amazon and Facebook may have a big advantage thanks to those walled gardens of customer information they’ve built, but your company almost certainly has access to much more authenticated customer data than you think.
- Analyse your existing customer inventory and decide which data points are relevant to your new first-party strategy.
- Map the customer journey to see how each step can be enhanced by the data you already hold.
By its very nature, the first-party data you collect from your customers is consented to and is therefore GDPR-compliant.
Used intelligently it’s a powerful first-step on the road to building meaningful relationships with your customers
It can help you interpret and shape previous visitor behaviour on your sales platform, giving you the information you need to intuitively target potential customers with on-site product recommendations, surveys and chat windows - or run A/B ad testing to model and target new audiences.
Value exchange is a key trend in the industry, and will be crucial to gathering further information from your customers.
- Reinforcing a sense of reciprocity will help build and strengthen the relationship they have with your brand.
- Offer discounts or free shipping in exchange for email addresses and phone numbers.
- You could set up a tiered membership programme with giveaways, early access to products.
- and refer-a-friend schemes: anything that reinforces the additional perks of being a loyal customer.
- Over time you’ll be able to gather increasing amounts of first-party data as your customers become ever more integrated into your brand.
Your first-party strategy should be optimised to provide the same level of service and attention as a seasoned in-store sales assistant. It’s vital that you understand when and how to engage with your customers, to guide them along their journey from first visit to purchase.
Creating a perfect browsing experience in this way will shift the focus away from third-party cookie-based retargeting ads and retention strategies, towards the development of an unbreakable brand loyalty that will ensure your customers return again and again.
Set out your success metrics
Metrics: the beating heart of your marketing strategy.
Setting out your key success metrics means you can quantify your business’s performance and learn from your successes and setbacks across different campaigns. Failing to establish the appropriate metrics and KPIs for your online store is like taking control of a plane and trying to fly blindfolded.
But which metrics to use?
The nature of digital marketing means that eCommerce businesses have access to potentially hundreds of metrics they can choose to measure and track, with a level of granularity that will be useful for some companies, but an unnecessary distraction for others.
You won’t need to apply all these metrics and set KPIs for each, but your options can be broken down into four broad categories: User Experience (UX); Ecommerce Sales; Customer Satisfaction; Marketing. Some metrics you might consider measuring include:
Total online revenue
Total traffic (users)
Email open rate
Add to cart rate
Shopping cart abandonment rate
Average order value (AOV)
Customer lifetime value (CLV)
Cost per acquisition (CPA)
Top performing products
Organic acquisition traffic
Sales conversion rates
Customer Retention rate
Repeat customer rate
Average referral rate
Ecommerce churn rate
Depending on the nature of your business, and what stage your company is at, you might choose to measure between 5-10 of these and set KPIs for each.
If you run a predominantly email marketing strategy, then click-through-rate is going to be a prime indicator of its success. Equally, there’s no point measuring social media engagement if you’re not consistently running active campaigns.
- Identify your main business objectives and the marketing strategies to help you achieve them.
- Choose the most relevant metrics for your business and its goals; set your KPIs against both.
- internal (company) and external (industry) measurements of quantifiable success.
- Use analytics tools to track and measure the weekly, monthly, quarterly and annual performance of your KPIs.
- Ensure a consistent and regular cycle of measurement and analysis, adapting your strategy according to what you learn from the data.
Verify that domain!
In response to the changes brought about by Apple’s introduction of iOS 14.5 earlier this year, Facebook implemented new ad measurement protocols.
These include Apple’s SKAdNetwork API and Facebook’s Aggregated Event Measurement, designed to support measurement of web events from iOS 14.5 users now that Apple requires the ATT prompt.
To retain control of editing privileges over your web store’s links and other content, and to prevent misuse by unauthorised third parties, you’ll need to verify your domain by claiming ownership of it in Facebook Business Manager.
Domain verification will also mean no immediate or future disruption to your ability to configure conversion events.
You have three options:
- Add a DNS TXT entry to your DNS record to confirm that you own the domain.
- Upload an HTML file provided by Facebook to your web directory and confirm domain ownership in Business Manager.
- Add a meta tag to the <head> section of your domain home page.
Facebook for Developers has provided an in-depth, step-by-step guide to each of these options here, and you should take action now to guarantee continued accuracy of your optimisation, targeting, and reporting on mobile web events.
6. The Leaf Response
Despite all the uncertainties, here at Leaf we’ve found ourselves better positioned than most to understand and adapt to the seismic shifts of iOS 14.5 and the wider Cookie Apocalypse.
Of course, like everyone, we’ve seen a considerable drop-off in attribution data across our clients’ campaigns.
And yes, we have less visibility over the granular data from Facebook on customer profile/platform/placement/device, etc.
These are the universal challenges we’re all facing across the eCommerce sector at the moment.
While many agencies and in-house marketers have seen their strategies implode as data loss and tracking capabilities tanked, Leaf has built its foundations on one increasingly undeniable truth:
Plug and play is dead.
Most traditional agencies shy away from building a full-funnel, multi-channel strategy around an ROI model that takes into consideration the client’s cost base, but that’s exactly where our expertise lies.
And few of our competitors have such a comprehensive ‘test and iterate’ philosophy when it comes to optimising ad creative.
Here are just some of our recommendations - based on actions we’ve taken to continue driving performance for our clients - to help you survive the Cookie Apocalypse in style:
- Move relevant reporting across to Google Analytics to continue receiving granular campaign data and customer information. Facebook remains a better bet than GA in terms of cross-device journey tracking.
- Have a healthy scepticism of the accuracy of your Facebook data. The increasing reliance on statistical modelling has made the attribution process even murkier.
- Be more selective about who is enrolled in your retargeting ad campaigns, and start splitting the campaigns out by age groups/platform/placement/gender etc. Try out any reasonable form of segmentation to achieve more granularity.
- Be prepared to de-prioritise even your best-performing campaigns. Targeting, say, 18-24 year olds with modest ad spend and letting the Facebook algorithm do the heavy lifting may have historically given you excellent ROAS, but with less visibility over the data even low-value investments may involve an unacceptable level of risk.
- Go broad, and less granular. Leaf has always run interest-based targeting campaigns - even as Facebook quietly frowned on the process and moved towards winding contextual ads down in favour of lookalike audiences. Without accurate signal from the pixel data, lookalikes are slowly dying. Although bigger companies with access to massive amounts of their historical data will probably weather the storm and continue to target lookalike audiences.
- Get yourself some proprietary technology. Or better still, let us use ours, to help you! The Interest Crucible - our dedicated special tech feature in Leaf Grow operating solely around super-interest targeting - is part of our well-established contextual targeting framework and methodology.
- Be like a chess grandmaster and think ahead! We’re constantly looking at how to futureproof the technologies we create, which in the face of so much rapid change is a real challenge. But we’re constantly evolving our creative and targeting methodologies. You should too.
- Consider outsourcing specialist roles. The pace of change in this area of the eCommerce sector is rapid and unforgiving. We predict less in-housing of performance marketing functions in favour of dedicated, experienced, tech-focused outsourcing. But maybe we’re biased!
The algorithms that drive attribution and tracking are growing in scale and complexity: the equivalent of going from an amoeba to a T-Rex in two months.
And two months is a very long time in the Cookie Apocalypse.
With less granularity, your immediate focus needs to be on broader targeting, and laser focused ad creative based on an unparalleled understanding of your core customer profile.
Prioritise developing world-class strategies for your first party data, creative content and marketing.
Companies who can analyse and draw out as much information from their customer base - and build a relationship with their customers and online communities - are the ones who are going to come out on top during this time of unprecedented change.
Good luck out there!
Want to scale your eCommerce revenue profitably? Learn more about Leaf's end-to-end performance marketing services here.