How Financial Marketers Must Prepare as Chrome Cookies Crumble

Within two years the third-party cookie will be dead, as Google's Chrome engineers devise privacy-friendly digital replacements, similar to what's already used on the Safari and Firefox browsers. Experts assess the impact and offer suggestions on how banks and credit unions can adapt.

A fundamental element of many financial institutions’ internet advertising has been targeted for destruction by 2022, in part on the grounds of improving consumer privacy. Yet many bank and credit union marketers seem to be completely unaware of the impending demise, experts say.

The coming change could massively alter the role of programmatic digital ad buying and measurement of online advertising results, substantially increase the importance and exclusivity of “walled gardens” like Google’s family of internet services, alter the role of publishers in where and how ads are seen, and make the role of quality content on financial websites more important than ever.

Predictions of the impact of the change vary all over the lot, with some commentators pushing the panic button and others welcoming the shift.

Ground Rules of Web Advertising Are Changing

What’s coming to an end is the ability to use third-party cookies on Google’s Chrome browser, which accounts for about 60% of browser usage.

Similar shifts were made in 2017 by Apple in its Safari browser and in 2019 by Mozilla’s Firefox, but the effect on internet marketing was relatively muted given the smaller market share both browsers have. In addition, unlike the other two, Google draws the bulk of its revenue from advertising and marketing income derived from its search engine data and pay per click advertising.

“People aren’t talking about it, which is mind-boggling.”
— Michael Bertini, iQuanti

Discussions about the impending change can get into the weeds pretty quickly. But the shifts that are coming are plain in outline. Workarounds, creative solutions and more have been spawned by the announcement, which only came in mid-January 2020.

“People aren’t talking about it, which is mind-boggling,” says Michael Bertini, Online Marketing Consultant and Search Strategist at iQuanti. The kinds of data that online advertisers have come to rely on may become both more scarce and more expensive as a result of the ripple effects of the change, Bertini predicts.

If data is the new oil, financial marketers may find that in some ways there will be an oil shortage.

At an extreme, some commentators are suggesting that the nature of the web itself could change. Worldwide, people have grown accustomed to huge amounts of news, information and much more being completely “free.” In reality, of course, nothing is free. Part of what has kept the party going is the data bought and sold that is generated from third-party cookies. Without that mechanism, more publishers may choose to gate their websites or find other new ways to derive income from their traffic by capturing visitor information or at least sufficient characteristics about site users to enable advertisers to target the people they need to reach.

“If you take away advertising data, publishers’ data becomes king,” said Ari Paparo, CEO of Beeswax, operator of a bidding system for programmatic advertising, during a webinar. Already, he pointed out, given the elimination of third-party cookies on Safari and Firefox, roughly 30% of current ad impressions are happening on browsers without cookies, even though some organizations have tried workarounds. For marketers this can be like flying without radar, and similar changes on Chrome could leave them flying blind without planning ahead.

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Would a ‘Cookie-Pocalypse’ Be All Bad?

Some commentators have gone so far as to say that many of the middlemen in digital advertising would have to revamp their role in the business. Others, however, suggest that while there will be pain, the change was becoming necessary. Programmatic advertising’s efficacy is marred by fraudulent websites that take fees for phony exposure, for example.

“The digital ad industry is broken and is a sham that rips off brands with often poor traffic as there is often no third-party accountability or oversight.”
— James Robert Lay, Digital Growth Institute

“Google’s coming ‘cookie-pocalypse’ is not a surprise and actually follows trends among other browsers, like Safari now including native ad blockers,” says James Robert Lay, CEO at the Digital Growth Institute. “The digital ad industry is broken and is a sham that rips off brands with often poor traffic as there is often no third-party accountability or oversight.”

Lay says his firm has gone after digital ad suppliers who were not delivering relevant traffic to financial clients, “let alone converting any leads.”

But while Lay thinks of the change as a fresh breeze in this marketing area — though it will likely bring yet more revenue to Google — he acknowledges that it will create more burdens for financial marketers. And he is among those that believe Google is pursuing the move for financial and competitive reasons as much as for the pro-consumer reasons it cites.

“The biggest problem I see with all of this is that marketers’ jobs will get exponentially harder as marketing data will become even more fragmented and siloed,” says Lay.

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What Lies Behind Google’s Blockbuster Blog Entry

As it is, the use of cookies has come into the spotlight as websites have stepped up the posting of cookie notifications in the wake of a growing wave of privacy legislation in Europe, California and elsewhere.

The term “cookies” actually describes more than one tool. Cookies are small bits of code that provide details about internet users’ web browsing activities.

First-party cookies, generated by websites for their own use, such as streamlining logins for repeat visitors, and for the use of their own advertisers, are not the matter at issue.

By contrast, third-party cookies can be tapped by programmatic ad buying services, analytical firms and others. They are the mysterious — to consumers — cause of internet ads about everything from electronics to cures for digestive problems seemingly following one around the internet and the way that some sites readily tailor the ads seen to the history and interests of each visitor.

“We plan to phase out support for third-party cookies in Chrome. Our intention is to do this within two years.”
— Justin Schuh, Google

So far most of what is known about the pending changes has come from a pair of posts on Google’s Chromium blog, where the digital giant informs developers and others of issues with its technology. Both blogs, and some public statements concerning the changes, came from Justin Schuh, Director of Chrome Engineering.

In an August 2019 blog, “Building A More Private Web,” Schuh wrote that tech used by publishers and advertisers to make advertising more relevant (cookies) “is now being used far beyond its original design intent — to a point where some data practices don’t match up to user expectations for privacy.” Referring to the steps taken for Safari and Firefox, he continued, “some other browsers have attempted to address this problem, but without an agreed-upon set of standards, attempts to improve user privacy are having unintended consequences.” One of these he noted was “fingerprinting.” That is a workaround that uses little bits of data — even the font a internet user selects for their screen — to create a proxy of sorts for a third-party cookie.

The blog announced Google’s “Privacy Sandbox,” a group of efforts to improve privacy, and made it clear more was coming. Schuh added that web standards development is complex and can take years.

In mid-January 2020 the other shoe dropped, with Schuh’s blog, “Building A More Private Web: A Path Toward Making Third-Party Cookies Obsolete.” He noted that discussion with the internet community had begun to move away from third-party cookies while promoting “a healthy, ad-supported web.”

“Once these approaches have addressed the needs of users, publishers, and advertisers, and we have developed the tools to mitigate workarounds,” wrote Schuh, “we plan to phase out support for third-party cookies in Chrome. Our intention is to do this within two years.”

The blog indicated trials of some aspects of the plan could begin towards the end of 2020. Some measures, such as blocking of certain insecure cross-site tracking, were slated to begin as early as February 2020.

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Time of Digital Advertising Upheaval Begins

In a panel discussion at a web security and privacy conference, Schuh warned that the shifts would have to take place deliberately to avoid breaking the web and potentially causing web developers to move into mobile app development instead. In covering Schuh’s comments, C|NET noted that representatives of other browsers see alternatives to what Google wants to see adopted webwide. Mozilla, for example, sees the potential for targeting ads by the context of a website’s material, in place of targeting by the characteristics of specific people.

Various participants in the web advertising world have launched or discussed efforts to replace the functionality of cookies, as well. Merkle, for example, has announced Merkury, an identifier crafted to let marketers continue to target audiences without resorting to third-party cookies. Merkle’s concept requires the participation of multiple publishers and sites, and the company’s proprietary data set, to work. It’s foreseen by some that other such multi-publisher systems will evolve to create some of the results of third-party cookies without the privacy issues they bear.

Other efforts are already out there or in the offing. The big question marks concern their utility as well as whether Google will consider them legitimate alternatives or merely workarounds that it will in time quash. Ari Paparo of Beeswax indicates that even some uses of first-party cookies across sites may not pass muster in the end.

Indeed, other browsers have been created even before Google’s announcements with different takes on privacy. One example that James Robert Lay cites is a browser named Brave. This browser blocks all ads on websites — which has led to criticism for overriding commercial publishers’ revenue streams, as do all ad blockers — but it goes a step further. Brave instead adds digital promotion from advertisers of its own.

That’s not all. Brave has started using a cryptocurrency, currently based on a version of Ethereum, called “BATs” — “Basic Attention Tokens.” These represent a very different take on the classic eyeballs-in-exchange-for-content model. Web users who click on an ad in Brave receive BATs for doing so. They can save those tokens to buy things like premium content from participating publishers. Or they can donate tokens to online publishers whom they favor.

What Should Banks and Credit Unions Be Doing?

Clearly, the internet industry and publishers have at least a battle ahead of them for profitability and position. But financial marketers need to do more than wait until the smoke clears.

“Where do social media alerts go? To your email inbox. Email is the secret weapon for the financial marketer.”
— James Robert Lay, Digital Growth Institute

“You need to create your own walled garden,” suggests Bertini. “You need to be creating upper-funnel content.” The idea here is not only to drive sales, but to build a following that is independent of browsers and search engines.

“You have to have a base of users who will accept your first-party cookies in order to get your content,” says Bertini. While very large financial brands can afford to buy gobs of data to figure out what’s going on, smaller banks and credit unions will need to cultivate their own audiences to do so.

As both Bertini and Lay point out, the goal goes beyond first-party cookies. Every relationship successfully cultivated should garner a solid email connection between the financial brand and the consumer.

“Email is gold” for the financial marketer, says Lay. Beyond that, putting greater emphasis on social media may also help because it can represent a back door to consumers’ email accounts. Many of them tie their social media to their email.

“Where do social media alerts go?” says Lay. “To your email inbox. Email is the secret weapon for the financial marketer.” Such connections are much more important than “likes” and numbers of followers alone, says Lay, calling those measures “a narcissistic view.”

Both consultants urge financial marketers to recruit staff or freelance content writers who can produce superior material that will attract consumers for its own quality. This means stepping further away from the “glorified brochure” that many banking websites still amount to, according to Lay. It also demands a halt to thinking of content as sales material.

“The days of pushing products — held over from legacy broadcast strategies — just finally might be dead,” says Lay. “Help first. Sell second.” Publishing clear and impartial material about the home selection and buying process, for example, will establish a financial institution as an authoritative source. Once trusted, it can then do some business, he explains.

Creating superior content will enable financial institution sites to give some of it to the public without commitment, suggests Bertini. After that, if the material is helpful, consumers should be willing to provide some information through registration processes in exchange for access to more content.

Working to draw consumers to good material without the rising costs of pay per click will require a fresh focus on search fundamentals.

“Organic search engine optimization will be cool again,” Lay predicts.

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Considering Google’s Stake in Coming Shift

Uncertainty will reign for many marketers for some time. “Google did no one a favor by putting a two-year horizon on cookie removal,” Paparo wrote in a guest post on AdExchanger. “The interim period will effectively freeze many businesses that rely on cookies in an uncertain state where they can’t really assure customers and investors that they will be able to continue operating (since the solutions aren’t ready yet) and they can’t go on with business as usual since the underlying assumptions will all change.”

“Google did no one a favor by putting a two-year horizon on cookie removal. The interim period will effectively freeze many businesses that rely on cookies in an uncertain state.”
— Ari Paparo, Beeswax

Some suggest that Google isn’t just appeasing privacy advocates in Washington and elsewhere but carving out its own expansion based on its strong position. Google is already a “walled garden,” in internet advertising language, providing a strong set of options inside its own organization.

“If you’re in the camp that’s investigating Google and its various monopolies, this plays into the story line pretty well,” Paparo observes. “I don’t think it’s a purely pro-Google thing, but legislators would look at it that way.”

“Google is building a moat,” says Johnny Ryan, Chief Policy & Industry Relations Officer at Brave, according to The Drum website. “It doesn’t need third-party cookies to track people. It has code live on virtually every single website and app.”

“It’s all about money,” says James Robert Lay. “It’s all about revenue, and meanwhile the cost per click continues to rise.”

“To some extent, one can view this as Google becoming more powerful by cutting others out of the pie,” says Michael Bertini.

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