There are two main issues that await us when third party cookies, as we know them, come to an end: reduced accuracy in advertising targeting and tracking. Both are pillars of modern marketing and will leave many marketers feeling around in the dark for some time. Indeed, there are far-ranging implications here, and no one quite knows how to find a way around it.
What are Third Party Cookies?
But let’s back up. What are third party cookies?
Hotel websites track visitors for simple metrics like how many visitors from which places are spending how much time on which pages of the site. This is obviously very useful information. However, when a visitor then navigates to another website, maybe a review site or booking engine, third party cookies allow that visitor to be tracked across sites, building up a profile of what that visitor is likely interested in. Marketers use this to determine what content is working, who is interested in what they’re offering, and all sorts of other informative details.
On the other side, there have been countless examples where people feel that third party cookies are too intrusive and not respectful of privacy. It seems like everyone has a story about talking about something with a friend only to get an ad for it later on Facebook or Google fifteen minutes later. Public sentiment has, over the last number of years, trended against tracking, with a whole slew of ad blockers now regularly in-use. Post-GDPR, IP anonymization became commonplace to protect privacy.
Safari, Apple’s browser, has been phasing out third party cookies since 2013. However, Safari has a small percentage of the overall market share of internet browser users. Google announced it would be following suit and phasing out all third party cookies in its own browser, Chrome, which has over 60% market share, in 2023, meaning the impact will be felt across anyone attempting to market anything to 60% of all internet users around the planet.
The First Problem: Targeting
The first problem when third party cookies go the way of the dodo will be a decrease in accuracy of targeting. Many companies that specialize in remarketing are scrambling to manage this.
Traditionally, a marketer will target a specific individual, let’s say, for the sake of argument, it’s you. Your personal information is anonymized, but your profile reflects your interests and demographics. A marketer will pay to display a banner that speaks to your interests and demographics. Without third party cookies, this, along with many other marketing methods won’t work.
One thing Google is trying to do now is create “FLoCs” (Federated Learning of Cohorts), which are similar to lookalike audiences. Users are grouped with other similar users and these groups can be targeted, instead of individuals. However, companies that use third party cookies for personalization will find it hard to maintain the same level of accuracy without them.
Unfortunately, this change will impact the little guy far more than the big chains. All the major hotel chains have their own in-house solutions like advanced CRMs that can maintain robust marketing profiles and analytics. Smaller hotels will be left scrambling. The typical European hotel doesn’t have a CRM system or loyalty program. They track or advertise via third party cookies, often working with a consultant or expert to do so.
Aside from third party cookie-related marketing, the only thing the average independent hotel has for collecting guest data is their PMS. One way hotels can attempt to patch these holes is through the use of CRMs. CRMs are most likely the only way businesses will still be able to target guests and users individually, because these are still considered first party cookies, as they stay within the confines of the company’s purview.
It will simply be more difficult to collect user information, and it will be harder for smaller hotels than it will be for large hotel groups. Whether we like it or not, this is where we’re headed. Hotels will need new CRMs, better newsletter strategies, and perhaps will need to reward customers who are willing to sign up for a newsletter or loyalty program.
The Second Problem: Tracking
So, accuracy in targeting will be reduced, but we need to address the elephant in the room: If we don’t have third party cookies, how can we track anyone? This topic has not received nearly enough attention and it’s a question that consultants are asking themselves every day, yet many hoteliers are not even aware of the issue. Let’s dig a little deeper.
Every hotel tracks its results with Google Analytics. But wait a minute – Google Analytics is a third party cookie-based system. How are we going to track marketing investments if we cannot use Google Analytics?
One burdensome solution is to install server-side analytics platforms (one example is Matomo). These are installed on-location on the company’s server itself. However, the challenge here is that in order for these server-side analytics tools to work, you’ll need a server at your property that hosts your website, plus the analytics system also installed on your server. This is enough to make your cookies first party cookies, but the setup is beyond reach for the average business. And while most hotels are moving to cloud-based solutions, it will only become more painful if they’re required to build on-site IT infrastructure.
What can we do about it?
So, what can hotels do about this? Hoteliers should talk with consultants or their marketing people simply to understand what’s going on and ask what their plan is. Ask what is going to change in the ways they advertise, track results, sell products, and in what ways will they budget their ad spend.
The worst-case scenario is that advertising will become completely generic: Imagine that tomorrow Google ads become the equivalent of a billboard you see on the street or a Super Bowl commercial. They might bring you business, but you have no way to determine where that business came from.
At some point, Google is sure to come up with a better solution. Yet, this is happening next year and they’ve yet to even hint at any solutions. One possible solution, which has been discussed for years, is Unique ID. Unique ID is a unique identifier that will be able to track users across multiple devices while anonymizing their data more thoroughly. It’s an interesting idea, but remains at the idea stage, yet to be implemented.
What we do know for sure is that third party cookies will not be accepted by Google Chrome by the end of 2023 and we need to find a solution ASAP. Otherwise, marketing as we know it will be over.
By Simone Puorto, Founder | CEO | Futurist
