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What You Need to Know About Disappearing Cookies and 1P Data
Stay on top of the latest e-commerce and marketplace trends.
Google will be phasing out third-party cookies on Chrome browsers by mid-2023, according to the latest announcement from Google, leaving many sellers, advertisers, and marketplaces questioning what steps they need to take to prepare for a post-third-party-cookie world.
Why is this happening? Privacy is a major concern for web users, which is what started the initiative in 2013 to tighten security and privacy by taking away third-party cookies on browsers. While this is a major loss for advertisers and marketers relying on third-party data, there are already solutions that help to make the internet more private and still provide enough information for effective targeting.
Here’s what sellers need to know about disappearing cookies and how to leverage first-party consumer data on Amazon and across channels.
The Difference Between 1P & 3P Cookies
First Party Cookies
First-party (1P) cookies are used for personalization on a specific website. An example of this is when you go to the Walmart website and are automatically logged in to your account. First-party data does not give you information about everything your visitor does but instead provides basic analytics about your website such as web sessions, geographic demographics, or referring sites.
Third Party Cookies
Third-party (3P) cookies are set by someone who is not the website owner. An example of this is when you are on the Forbes website, and there is an ad for a hat company that is not associated with Forbes. Third-party cookies allow advertisers to follow a consumer across their journey, showing them the same product on their smart TV and their search on Amazon.
A cohesive digital experience combines both 1P and 3P cookies and uses the combination of the data together to create the best and most personalized advertising experience.
But what happens when 3P data is no longer available on Google Chrome?
89% of retail media ad spend is commanded by Amazon in the U.S.
Timeline of the Third-Party Cookie Phase-Out
Google is not the first to take away third-party cookies. Safari and Firefox browsers have already been phasing out third-party cookies for the past three to five years. But Google Chrome’s third-party cookies currently make up 64% of the market share.
In 2016, when the GDPR, data privacy legislation in the EU, was created to protect “rights and freedoms of individuals” online, there was a ripple effect of online privacy rules across the world. Proof of this is just a year after the GDPR was passed, Safari shared that they would be blocking third-party cookies on their platform, and then Firefox followed two years later.
Data privacy legislation spread to the U.S. when the CCPA was enacted, impacting for-profit businesses in California, leaving many businesses across the U.S. to make adjustments to the new privacy law.
In January of 2020, Google announced it would phase out third-party cookies in the future and offered Google FLoC as a replacement for third-party cookie tracking. Since then, Google has announced it will now replace its FLoC proposal with the Topics API after “community feedback.” Apple followed shortly with an iOS 14 update that included App Tracking Transparency, requiring apps to get permission to collect user data.
As of now, the estimated date for Google to be phasing out third-party cookies on Chrome browsers will be mid-2023, and it is expected that online privacy trends will continue to permeate the internet and impact businesses across the globe.
Does Disappearing Third-Party Data Impact E-Marketplace Sellers?
In short, yes. The disappearance of third-party cookies puts even greater importance on first-party (1P) data. And the biggest concern for many is accurately tracking and identifying audiences across the internet.
Thankfully, third-party cookies are not the only cookies you need for selling success. There are a few different data solutions you can use to continue to track and measure your audience reach:
- E-marketplace platforms like Amazon collect data that is built into their marketplace with past purchase and audience data to benefit sellers.
- Privacy-safe databases like AMC are solutions that sellers and brands can use for tracking their advertising across channels.
Amazon E-Marketplace Platform Data
E-Marketplace platforms are a type of retail media network (RMN) ecosystem that includes both shopping and purchasing activities. RMN’s are full of rich data on buying patterns and behavior that give a brand the information needed for effective ad targeting.
Amazon alone commands 89% of the retail media ad spend in the U.S., but there are many other retail media offerings emerging, including Walmart, Target, CVS, GoPUff, Ulta, and Instacart.
Amazon Multi-Channel Attribution
If you are looking for other ways to track consumers across their online journey, Amazon recently rolled out their beta solution called Amazon Marketing Cloud (AMC) with the purpose of helping brands and sellers track and measure their advertising across channels and mediums.
Find more information about AMC and how it can be used. AMC is not the only privacy-safe solution out there; you can also use Google’s Privacy Sandbox and FLoC.
How to Prepare for Google’s Third-Party Phase-Out & Leverage Amazon’s 1P Data
The loss of 3P cookies is not a real threat to marketplaces, although choosing the right RMN for the brand and targeted audience will be an essential decision for brands and sellers.
Amazon is just one example of a thriving marketplace that has built-in data you need to personalize and advertise to the consumers that matter most. If you are considering selling or advertising on Amazon or Walmart, check out our playbook comparing Amazon and Walmart.
Amazon is an e-marketplace platform that acts as a type of retail media network ecosystem and has a long history of collecting data since its start. Amazon’s first-party data is used to remember your login information, items in your cart, and other user experiences that make it easy to shop on their website.
Amazon also uses this data to populate their website with recommended products and categories for shoppers based on their buying patterns and behaviors on Amazon. Disappearing 3P cookies on Google will not change that.
If you already are or are considering advertising on Amazon, their historical consumer data will not be impacted by 3P data changes. In fact, it will make advertising on Amazon even more essential, which is one of Feedvisor’s 2021 & 2022 trends.
Feedvisor found that of brands surveyed, 88% used Amazon’s advertising platform in 2020, up 21% from the previous year. Amazon continues to expand its advertising capabilities (more on this coming up). Adoption of Amazon advertising and other e-marketplace advertising will be critical to the success of brands and sellers in 2022 and beyond.
Looking to get started or improve your Amazon Advertising strategy? Feedvisor’s AI-driven Amazon Advertising Optimization and Intelligence Platform supports all Amazon Ad types.
Further Reading: The Amazon Advertising Playbook
Understanding your target audience and connecting with them effectively will always be important to sellers, but the strategies and tactics are constantly changing.
This won’t be the last time you may have to adapt your marketing and advertising strategy. To stay up to date with more future changes and trends, download our new piece, 2022 Trends & Predictions for E-Commerce Marketplaces.
Tune into our blog again soon for more information on how this impacts your advertising outside of Amazon.