In January 2020, Google announced that it would start blocking third-party cookies by default on its popular Chrome browser come 2022. While Safari and Firefox have been doing this for years, Chrome controls 68% of the world browser market, which means that Google’s move will leave virtually no one using a browser that supports third-party cookie tracking.

Google’s announcement is part of their larger Privacy Sandbox initiative, and came in the wake of a rising tide of privacy concerns across the globe. According to research from the Pew Research Center, 72% of Americans are concerned that everything they do online is being tracked by advertisers, and 81% feel that the risks of sharing their data outweigh the benefits. Other studies from Pew have also shown that half of Americans have chosen not to use websites, social media networks or digital devices due to concerns about personal data privacy.

The death of third-party cookies might sound like a technical detail, but it’s likely to cause a sea change in how digital marketing is conducted, in the financial industry and beyond. As a financial services marketer, here’s what you have to know:

What are cookies and why do they matter?

A cookie is a snippet of code that is generated and stored on your computer when you visit a website. They’re often used to track behavior on the website, which allows web designers and marketers to improve the user experience, serve targeted ads to likely prospects, and increase conversion rates for engaged leads.

There are two main types of cookies: first-party and third-party.

First-party cookies are created by the website that the user is visiting. These cookies are often used for remembering usernames and passwords, the user’s preferred website settings, and their behavior on your site. These analytics then allow you to improve your website for various user personas and to design a customer-focused marketing strategy.

In contrast, third-party cookies are placed on the user’s computer by another website other than the one they’re visiting. Their behavioral information is then sent to that third-party, most often an advertiser who wants to make use of that data to send the user retargeted ads as they surf the web. If you’ve ever searched for a slow cooker on Amazon, then found ads for slow cooker cookbooks and recipe sites popping up on Facebook and Google, you’ve been the target of a third-party cookie tracking campaign.

Since first-party cookies generally lead to a better user experience, they won’t be affected by Google Chrome’s upcoming changes. But third-party cookies will be disabled by default, thus effectively rendering them useless.

Google’s replacement for third-party cookies

Just because third-party cookies are going away doesn’t mean that it will be impossible to track users in future. Google is developing an alternative called the Federated Learning of Cohorts (FLoC) model, which is intended to be a more privacy-friendly solution to understanding user behavior.

Under FLoC, user behavior wouldn’t be tracked by third-party advertisers, but would be tracked by the Chrome browser itself, and that information would then be stored locally on the user’s computer. Chrome would then assign them to “flocks” along with thousands of people with similar behavior. Advertisers can then target specific flocks that fit their ideal buyer profile.

In theory, FLoC would be better at preserving user privacy as the information never leaves the user’s computer, and advertisers would only have access to aggregated data for an entire flock, rather than for any one particular individual.

Say you’re a bank targeting first-time homebuyers for mortgage loan ads. Today, you might be partnered with personal finance and real estate content publishers, as well as a number of retargeting ad networks, that allow you to place third-party cookies on users’ computers when they visit those sites.

In future, you would instead target the “first-time homebuyer” flock tracked by Chrome, without having direct access to any given user’s behavioral data.

The upside is that you won’t have to establish diverse partnerships to get wide distribution of your bank marketing cookies among your target audience, and you also no longer have to worry about compliance for those cookies.

The downside is that Google will have even more control over the advertising market, and you may not have the granular access to user data that you might have had in the past.

What should financial marketers do?

While it’s impossible to predict exactly how the death of third-party cookies will play out, there are several things savvy financial marketers can do to prepare for the transition.

First, consider alternative strategies. Familiarize yourself with the Privacy Sandbox and understand the implications going forward. Then, experiment with strategies that take advantage of, or will remain unaffected by, Google’s planned changes. For example, you could shift your emphasis to strategies that leverage first-party data, or older strategies like contextual advertising, where you buy ads on websites that rank for specific keywords. Since these approaches are not dependent on third-party tracking, they will continue to be as effective in 2022 and beyond.

Second, focus on building a strong marketing foundation. The fundamentals of financial service marketing are likely to remain relevant regardless of any technological changes. Building a smooth customer journey, improving the user experience, and targeting well-defined buyer personas will continue to add value with or without hyper-targeted advertising tools and mass amounts of data.

Third, communicate these changes with the rest of your organization well in advance, so all stakeholders will have the time they need to prepare and re-orient their approach. And make sure that the conversation extends to your marketing partners as well, so they understand how to work with you effectively as you evolve your strategy. Bear in mind that stakeholders and partners will differ in their level of sophistication, so adapt your messaging accordingly.

We’ve had a lot of experience with this at Fintel. If you need help with navigating the upcoming changes or getting partners onboard, feel free to drop us a line.