Earlier this year, Google announced it would phase out third-party cookies from its Chrome browser over the next two years. Marketers have since been speculating on the negative consequences this could have on targeted campaigns and reaching new customers.
This reaction is understandable. Third-party cookies are integral to tracking users and delivering personalized ads that target users around the web. However, while big changes are afoot, it's certainly not all bad news.
It's important to note this phase-out does not include first-party cookies. So you can still monitor how customers interact with your hotel website and deliver personalized content and ads (more on this later).
In short, there are plenty of ways to prosper in a world devoid of third-party cookies. We'll explain more below, but first — a definition.
First-party vs. third-party cookies
Cookies are indispensable to digital marketers. They're used to track users around the web, create enhanced online experiences, and deliver personalized ads based on a user's behaviors and preferences.
But what exactly is a cookie?
In simple terms, it's a tiny text file that gets added to a user's web browser when they visit a website. Once attached, this text file can identify and track a user as they navigate the web, which can then help deliver the aforementioned benefits.
So what are the differences between first and third-party cookies?
First-party cookies are created and stored on a user's web browser when they visit your website. This allows your website to deliver a more personalized and relevant experience when these users return to your website, including:
- A personalized greeting that welcomes them back
- Auto-filling forms to speed up the booking process
- Remembering a user's language preferences
Third-party cookies are attached to a user's web browser after they visit a website other than yours. This lets you track users around the web in order to better understand their behaviors, habits, and preferences.
This information can then be used to target users around the web, including:
- Sending personalized marketing content and offers to your past visitors
- Delivering ads to other users with similar browsing behaviors and interests
- Prompting users to complete a booking if they abandoned your website
Why is Google starting to phase out third-party cookies now?
User privacy is a big part of Google's decision. Ad blockers and privacy tools are now being installed with increasing regularity, and online audiences are increasingly uneasy about advertisers tracking them around the web.
According to a 2019 report from SmarterHQ, 79% of consumers say that companies know too much about them, and 86% are concerned about their data privacy. Both Safari and Firefox already block third-party cookies by default, so Google's decision is a natural progression to follow suit.
Combined, these factors have created a compelling case for Google to get rid of third-party cookies.
How does this impact Pegasus' websites and e-commerce products?
As mentioned, first-party cookies (such as Google Analytics or the Google Ads global site tag) remain unaffected, so they will still be able to collect session and transaction data on hotels' websites.
This means that many of Pegasus' websites and e-commerce products will also remain unaffected.
Our additional e-commerce products utilize a CRS connection—not a cookied one—so they will remain unaffected by the Google update. This means they can still populate dynamic CRS data in Facebook Travel Ads and Google paid search copy, and hotels' metasearch connections are unchanged.
How will this impact your hotel's digital marketing?
Following the phase-out of third-party cookies, what disruption should hotel marketers expect? Before we tackle that question, here are the areas we do not expect to be affected.
Conversion tracking (relies on first-party cookies)
Pegasus' paid search and paid social conversion tags both use first-party cookies. As a result, we do not anticipate any disruption in tracking standard click-through conversions, so hotels will still get to see how their campaigns performed.
Remarketing (relies on first-party cookies)
We also don't expect any experience disruption with RLSA (Google's Remarketing Lists for Search Ads product). This is because an ad displays on the Google SERP (Search Engine Results Page) based on a user's search query and the actions they take on our hotels' websites, which is made possible by a Google cookie.
The same goes for Facebook remarketing. The ads that Pegasus creates will display in the Facebook/Instagram feed based on actions that users took on our hotels' websites. These actions are tracked via a Facebook cookie, so again, there's zero reliance on third-party interactions.
Display remarketing, however, is a different story because ads can appear on third party websites.
What disruption do we expect to digital marketing?
In addition to display remarketing, we anticipate some disruption to display, native, or paid social advertising campaigns that utilize a robust audience targeting approach. This will make it harder to find new users, generate brand awareness, and personalize ads using the ways of the past.
Tracking view-through conversions and enabling frequency capping (limiting the amount of times a user sees an ad) will also likely not function in the way it does today.
Can targeted advertising exist without third-party cookies?
When third-party cookies become obsolete, many audience targeting capabilities won't be available in the same capacity as they are now. This will have a dramatic impact on digital marketing campaigns that collect data on what users are doing on different websites.
How will the marketing ecosystem as we know it adapt? Industry-specific providers such as Adara and Sojern, and other platforms such as Adobe Audience Manager and AdRoll, have announced how they intend to work with Google to identify and target users. This includes working within Google's potential Privacy Sandbox, focusing on onsite personalization, and using more traditional marketing, including email.
The common denominator among the industry is that programmatic media buyers will need to move away from building audiences on third-party data signals.
How will we adapt our approach to digital marketing?
At Pegasus, we typically use audience targeting in scenarios where we're looking to bolster brand awareness. This means we sometimes tap into audiences created by third-party cookies to help hotels identify and target potential new customers that might have limited or no awareness of their brand.
Here's a typical example: Let's say we want to find new users who are similar to guests who have booked with your hotel in the last 90 days. To do this, we could create a "lookalike" audience based on the profiles of those past guests, and then exclusively target this new audience. We could then limit how often our ads display in this campaign, such as 3 ads per day. We would target view-through and click-through revenue generated from this campaign separately.
The lookalike targeting, frequency capping, and view-through revenue tracking all relies on third-party cookies.
Like all marketers, we'll need to re-evaluate display advertising efforts that utilize remarketing, and other display and paid social efforts that utilize audience and behavioral targeting.
Instead of using cookied signals to find new users, generate brand awareness and re-engage existing guests, we'll need to employ other advertising strategies that are keyword-based or incorporate first-party and CRM data.
The bottom line
Our primary, low-funnel, revenue-generating advertising efforts for hotels will remain unaffected and just as effective. Brand awareness targeting methods that will be affected give us room to pivot and incorporate other strategies that are still relevant for our clients.
Because our core e-commerce products use first-party data, we can still maintain a degree of personalization without the need for third-party cookies. This means we can still populate booking engine values in our ad copy and creative for Google paid search (Real Time Ads), paid social (Facebook Travel Ads), and on our websites (Conversion Plus).
In effect, eliminating third-party cookies is like data collection transitioning from a sharing economy to an individualistic approach. Instead of advertisers actively tapping into different audiences built on data signals from numerous sources, companies will be independently responsible for the collection of their own data and how they use it — no (or at least minimal and highly protected) sharing allowed.
The proverbial data "sharing economy" happened without many people knowing that their data was being collected. This shift feels like a reset — giving users back control over their own data, and allowing brands the chance to find new ways to build long-lasting relationships.
Pegasus combines high-tech innovation with high-touch service to give hoteliers more control over their revenue and distribution strategy than ever before. Following their merger with Travel Tripper, Pegasus enables hoteliers to better connect with their guests through an innovative and flexible platform of Reservations, E-commerce, Global Sales, and Business Intelligence solutions that help hotels drive demand and increase revenue and profitability, including the Pegasus CRS, named Best CRS 2022 by Hotel Tech Report. With more than 30 years of experience in global distribution, Pegasus serves hotels across 120 countries from eight offices worldwide in New York, Scottsdale, Las Vegas, London, Paris, Frankfurt, Tokyo, and Hyderabad. For more information, visit www.pegs.com.