Third-party cookie deprecation is a significant market opportunity for telcos to drive revenue growth in a critical adjacent market. By leveraging their position at the heart of every digital transaction, telcos can create a new range of essential identity services to power the future of digital marketing. Here, Novatiq summarises the end of third-party cookies, what this means for the digital marketing industry, how telcos can benefit from the third-party cookies phase out, and why telcos need to act with urgency.
There’s no big secret to the deprecation of third-party cookies. Third-party cookies are small text files placed on websites for tracking and online-advertising purposes. They work by storing information about users’ online activity and preferences, which can then be accessed by third parties to deliver personalized content or ads across different sites.
Third-party cookies are going away because of the privacy implications of the technology. Global privacy laws have established strict rules about gathering and processing consumers’ personal data. The extensive tracking and profiling activities facilitated by third-party cookies, especially when opaque or when lacking a genuine choice for consumers to opt-out, can contravene the rights protected under privacy laws.
Consumer preference is also a factor. As set out in a recent survey by Cisco, 86% of consumers “care about data privacy” and want more control. Consumers will increasingly choose to buy from brands that respect their data privacy, and that means no more tracking cookies.
The withdrawal of third-party cookies risks limiting brands’ ability to deliver personalised ads and understand consumer behaviour across multiple websites and apps, impacting their advertising strategies and potentially reducing their marketing effectiveness. Similarly, publishers may face difficulties in generating advertising revenue as personalised ads, which often command higher prices, become harder to implement and measure.
However, the third-party cookie phase-out has been a long time coming, and alternative mechanisms for enabling personalised advertising are emerging. These include the use of privacy-first identifiers to replace tainted third-party cookies.
Telcos have a once-in-a-generation opportunity. Given their rich customer intelligence and unmatched capability of recognising users online, telcos can facilitate the privacy-first ID services that brands, publishers, and agencies are crying out for to ensure the continued existence of the free-to-view web.
The opportunity is around two types of IDs:
This is the critical point. The end of third-party cookies is now very much in sight. Already, Mozilla restricts cookies to the site on which they are placed, making it impossible to track users (unless users decide to enable tracking). Similarly, users of Microsoft’s Edge browser must actively enable third-party cookies. Apple has some of the most restrictive measures, with full third-party cookie blocking in place on Safari. Now, Google has announced that it will have withdrawn cookies from Chrome by the end of next year. Given the market dominance of the Google browser, this is big news and is effectively the death knell for tracking-cookie based advertising.
On mobile apps, this death knell has already sounded. In 2020, Apple all but killed off its own Identifier for Advertisers by making the service opt-in for users. So few people chose to opt–in, even giants of the adtech world, such as Meta, saw their ad revenues plumet. Google, meanwhile, is making it harder for Android apps to track users who have opted out.
What this means for telcos is that time is running out if they are to build their own ID verification service. Digital publishers and brands are urgently looking for robust, reliable, and above all privacy-centric replacements to third-party cookies. The market is primed and ready for telcos that can move the fastest.
And with the Novatiq Fusion platform telcos can move very fast. We have a proven service-layer proposition that can be integrated with telco networks and brought into production in a matter of months. With Novatiq, telcos can move from a standing start to win the race for ID verification services for digital marketing. This is a huge opportunity that promises a significant revenue boost to those able to realise its potential. More importantly, it promises to place fast-moving telcos front and centre of the privacy-centric internet emerging today, with a powerful, service-led proposition.