Cookies are Being Replaced With… CHIPS?
by Maxime Slek
What are Cookies?
With the average person being a lot more concerned about their online privacy than ever before, the current standard of personalized advertising is being put into question. Cookies are small files that are stored on a user’s device to collect data on them to identify your device. Cookies have always been the primary source of data collection on the internet. However, this is not all bad. There are several types of cookies utilized on the internet, some of which are used to remember certain preferences you have set, remember items in your shopping cart, help autofill information, and generally help provide a smoother browsing experience. These cookies are necessary for the internet to run properly.
The Issues with Third-Party Cookies
The cookies whose data collection ethics are being put into question are what are widely known as third-party cookies. Third-party cookies are not part of the actual websites that you visit. They are separate entities that collect information on your preferences based on your searches, how you respond to certain ads, and your browsing activities. The information is used to build your device a kind of “profile” that helps ad-based vendors target people that are more likely to show interest in their product. Third-party cookies raise privacy concerns for many online users as it allows for extensive user tracking and profiling.
Certain browsers such as Safari and Firefox have already banned the use of third-party cookies on their browsers, but have not given advertisers any alternative, making online targeted advertising very difficult. Google, as the world’s most popular browser, now has the responsibility to make both users and advertisers happy by striking a balance between privacy and personalized advertising. Their goal is to get rid of third-party cookies from their platform by 2024. This is a lot of pressure for Google, as the $500 billion marketing industry is now relying on Google to present a functioning alternative.
Google’s answer to enhancing user privacy while still allowing online advertising to exist in a less invasive, more privacy-conscious way is something that they like to call Privacy Sandbox. Privacy Sandbox is a variety of tools and technologies that can be used to achieve similar success to what third-party cookies had in the past, without being invasive of the user’s online privacy.
“In a new experiment, Google compared the performance of ad campaigns using third-party cookies with near identical campaigns using tools from Privacy Sandbox. Over the course of five weeks, Google found advertisers using Privacy Sandbox decreased their spending by 2-7%. The experiment showed conversations per dollar—a measure of how well the ads work—dropped by 1-3%. The number of people who clicked on the ads was within experts, and web developers to ensure that this massive change to the online ecosystem goes as smoothly as 90% of the status quo.”– Thomas Germain, Gizmodo.
Though Google’s Privacy Sandbox is still technically under development, Google is actively taking in feedback from privacy advocates, industry experts, and web developers to ensure that the internet’s biggest change goes as smoothly as possible. One of the new tools and technologies that Google is introducing is Privacy Sandbox Federated Learning of Cohorts (FLoC). FLoC groups users into large cohorts based on their browsing behavior instead of tracking individuals. Advertisers can target these cohorts with relevant ads rather than targeting specific individuals. Another proposed feature is the Privacy Budget. It sets limits on the amount of user information that websites can access, ensuring that they cannot extract excessive personal data without the user’s explicit consent.
So What Happens to Third-Party Cookies?
Well, they will not be completely erased from the internet. Third-party cookies are used for cross-site tracking, but they are also responsible for keeping certain bits of personalized information stored for certain website features.
The solution for this is to completely block the cookies’ cross-site tracking capabilities, and change where it is stored so that the information that is stored about you is local to the server that the cookie was from.
This new form of third-party cookie is called a Cookie Having Independent Partitioned State, or CHIPS for short. This will block ad-based vendors from stealing your information beyond the limit that Google sets, all while keeping previously existing website infrastructure intact, with minimal changes. This means that the cookies are limited to only that specific website, and cannot enact in a shared state, which would previously be how ad-based vendors collected your data.
Simply put, the cookie is being retired to be used only as a way to store personalized information about your specific preferences on that website. This enhances privacy, reduces data leakage, improves internet security, and overall promises a safer browsing experience.
Contact 5D Spectrum to learn how your business can prepare for this upcoming change.