Is Performance Marketing Possible Without Cookies?

Performance Marketing has changed dramatically since the recent ruling of the European Court of Justice (ECJ), because tracking digital footprints with the help of cookies is a no-go. This means the end of cookie tracking and the collection of user data – at least until the user has given his or her explicit and voluntary consent. The problem: digital “cookies” are an essential part of today's performance marketing. Find out what this means and which solutions provide a remedy here.

What Is Performance Marketing?

Performance marketing is the use of online marketing tools with the aim of achieving a measurable response and/or transaction with the user. It is equivalent to traditional direct marketing only with interactive media, as it involves directly addressing a potential customer with a call to action.

Performance marketing is characterized by 4 features:

• Measurability

• Modularity

• Optimizability and

• Networking

With performance marketing, the reactions of the target group can be clearly, promptly and completely observable and measurable. The campaigns are divided into many small budget modules that can be individually booked and evaluated. In this case, the purchase of online advertising space is automated and carried out by artificial intelligence in real time. Payment for the respective measure can be performance-based, for example pay per click, pay per lead or pay per sale. This depends in each case on the objective of the campaign. With the help of various parameters, such as ad texts, ad design, environments, and click bids, the efficiency of the campaign can be influenced and thus improved while it is still running, making it extremely targeted and effective. Furthermore, performance marketing can be integrated into a classic campaign as an interaction element, which expands the cross-media mix and thus creates holistic marketing. However, this is only possible to the extent that cookie-based tracking tools are used, such as Google Analytics.

Objectives in Performance Marketing

• Reach generation for branding and brand building

• Increase visibility and thus recognition / awareness within the target group

• Generate interactions on social media channels

• Increase traffic on the website

• Increase dwell time on the website

• Generate registrations

• Generate leads

• Increase online sales

• Strengthen customer and user loyalty

• etc.

What Are Cookies?

If you're hoping for sweet treats or warm cookies from the oven, you'll be disappointed. In the digital world, “cookies” stand for small text files that are placed in a user's browser history by a website. This makes it possible to track how often and for how long a page has been visited by the same user. But that's not all: the pages also remember previous visits and can thus be individually adapted to the user and his or her surfing habits. This allows operators to optimize offers through the use of cookies and facilitate the user experience.

Not All Cookies Are Created Equal

Just as in the analog world, different types of “cookies” exist in the digital world. In principle, a distinction is made here between session and tracking cookies. While session cookies are only stored for the duration of the user session and are then deleted, tracking cookies function across sessions and are permanently stored with the user.

First-party, second-party and third-party cookies can be active under tracking cookies.

First-Party-Cookies & Second-Party-Cookies

These are set by the website on which a user is currently surfing. This provides the website operator with meaningful reports, for example about a customer's shopping cart or loading times of different browser types. These types of cookies are not recognized across multiple domains and are also only used by the website owner.

Third-Party-Cookie

These are played by a third party, for example an advertiser, and work across domains. When a user visits a website, a display banner can place a tracking cookie on the client unnoticed.

The aim is to use the cookie to analyze the user's click behavior in order to play out interesting advertising in the future – in other words, to operate successful performance marketing.

An End to Cookies on the Internet

Now, however, the era of cookie tracking is drawing to a close. The fight against third-party cookies in particular was declared when the General Data Protection Regulation (GDPR) came into force in May 2018. More and more regulations around the storage of sensitive user data are popping up. Since the EU's E-Privacy Directive, website operators are no longer only obliged to provide information about the storage of user-relevant data, they must also obtain the user's consent. The recent ruling of the ECJ confirms this directive and expands it. Users must now actively give their consent. Unchecking a preset checkbox when opting out is no longer sufficient.

Browsers, such as Safari and Mozilla Firefox, are also responding in the privacy trade debate with constant privacy updates. Apple's “Intelligent Tracking Prevention”, for example, causes cookies to be deleted after a short time. Mozilla Firefox already blocks any kind of cookies fully automatically, and Chrome is also continuously revising its tracking methods. So the question now rightly arises as to how user behavior can still be recorded in a legally compliant and at the same time effective manner in the future.

What Is to Be Done Now in Performance Marketing?

Even if tracking cookies seem indispensable in web analytics, when using Google Analytics and target group-specific advertising on the web – the digital advertising industry must come to terms with alternative tracking methods. At times, there is no universal solution. However, various promising approaches exist.

Formation of Login Alliances

The giants of the Internet, such as Facebook or Google, already welcome login data as a welcome alternative to cookies. Users deposit their name and assign a password once on one of the platforms. They can then use this registration to access the applications of all participating companies. The advantage is that with each additional registration, users can decide in a legally compliant manner whether and to what extent they want to make their data available for advertising. However, the question arises as to how far one can compete against the immense market power of Facebook, Amazon, and Co.

Fingerprinting

Similar to cookie tracking, the principle of fingerprint tracking aims to store digital traces of users. Unlike cookies, however, the data is not saved locally, and no permanent cookie needs to be set on the user's page. Only the technological information is stored, and thus a usage profile of the visitor is created. This can then be clearly identified in retrospect. Here, however, future restrictions on the part of politics are to be expected, and the browsers will also react with privacy updates.

Shared IDs

The purpose of shared IDs is easily explained. If various advertising technology providers share a common ID, fewer cookies are needed to match user profiles. This approach is considered one of the most promising short- to medium-term solutions. The downside is that when cookies are reduced, the quality of the data also suffers – so there is also a need for optimization here.

Contextual Targeting

Here, ads are not played out based on the user profiles of website visitors, but on the content of the page. The advertiser defines the keywords and topics relevant to him beforehand. The system then places the advertising message exactly where this content shapes the page. Cookies are not required for this, which creates trust among users. Only the target group hit quality poses a challenge.

Conclusion

Performance marketing without cookies is possible! However, advertisers face some challenges that require new strategies. Nevertheless, various approaches can be applied to ensure successful performance marketing in the future.