Cookieless targeting: how does it work?

Digital advertising is constantly changing and evolving, trying to meet the needs of the market and the growing number of regulations and restrictions concerning user data privacy.

The onset of cookie deprecation causes panic among advertisers and marketers, making them search for new ways of reaching out to their audience. Cookieless targeting is one of the ways in which advertisers can get through to their audience without cookies effectively. Here we will examine cookieless targeting and discuss why and how to get the best results with your ad campaigns.

⚠️UPDATE: Google announced that it will no longer pursue its plans to phase out third-party cookies. Instead, the company will introduce a new solution: a one-time prompt that allows users to set their preferences, which will apply across all Google browsing experiences.

Targeting cookies are small data files stored on a user's browser that track online behavior across websites. They help advertisers deliver personalized ads based on interests, browsing history, and interactions.

Cookieless targeting is a process of delivering personalized advertisements to users without using browser cookies. It depends on different data sources and techniques that do not rely on cookies. Such targeting can identify target audiences while complying with regulations and maintaining user privacy.

Cookieless targeting uses techniques and strategies such as first-party data utilization, contextual advertising, identity-based solutions, and device fingerprinting. In this post, we will examine each of them further.

Cookies are still one of the whales online advertising stands on. With the help of cookies, advertisers can show consumers the most relevant ads, make their websites more effective and user-friendly, and measure the efficiency of their marketing and advertising efforts.

In traditional targeting, cookies have long been a cornerstone that allowed advertisers to personalize ads based on user behavior. They enable tracking user activity across various websites and collect enough user data to create highly personalized advertising campaigns.

There are several reasons why traditional targeting alone won’t get you far in 2024. Changes in privacy regulations, consumer privacy concerns, and technological changes call for new solutions.

Evolving data privacy regulations are the primary reason businesses need to rethink how they collect and use their customers' data. Cookies fall under the GDPR's definition of personal data since they are used to identify users. The ePrivacy Directive and ePrivacy Regulation complement the GDPR to ensure user data privacy. You can read about these regulations and their influence on marketing and advertising on our blog. 

Another aspect deriving from regulations and restrictions is consent fatigue. In plain words, users are fed up with cookie consent pop-ups they stumble upon every step of their online browsing. It leads to users ignoring or rejecting them more and more.

Below you can see cookie consent rate stats for 2023, based on Ruler Analytics study.

The rise of mobile devices and mobile app usage poses many challenges for traditional targeting. When users switch between different devices, it’s hard for cookies to build a comprehensive picture of their behavior. Also, cookies are not very helpful when it comes to mobile apps. Mobile apps have other means of identifying users, like user IDs.

Still, the biggest reason traditional targeting isn’t enough anymore is phasing out third-party cookies on Chrome. As already announced, third-party targeting cookies are going away with Google's Chrome ending support for third-party cookies in the first quarter of 2025. The finalization of the process has been shifted further along the timeline a few times, but one thing is sure - it’s happening in the foreseeable future.

The more complicated advertisers' and marketers' lives with cookies become, the more alternative solutions and technologies emerge to help them. Server-side tracking is an excellent example of an effective tracking technology that can help businesses thrive in the cookieless era without being vulnerable to browser-based blocking. First-party data and identity solutions are also getting increasingly used in targeting.

For all the reasons mentioned above, traditional targeting effectiveness drops. Cookie data quality declines; inconsistency leads to less effective targeting and personalization efforts. Data fragmentation caused by cookie blocking and limitations also reduces the accuracy and comprehensiveness of user profiles.

You may wonder how cookieless targeting works. It is fair to say that cookieless targeting is synonymous with contextual targeting. This means that this type of targeting isn’t a novel concept; it’s been around for about a decade. Yet, like everything under the sun, it’s constantly evolving to adapt to the environment.

Contextual targeting was outmaneuvered by cookie-based behavioral targeting. Contextual targeting is rising again, with its potential bigger than ever. Nowadays, cookieless targeting is powered by machine learning and artificial intelligence, and it can target users accurately based on website metadata, page content, and keywords.

To target an audience without cookies, we recommend you focus on the following strategies:

When it comes to cookieless targeting, first-party data is an invaluable asset. This type of data comes directly from the users, is shared willingly by them, and gives you the most precise idea about your target audience. First-party data comes directly from the users’ interaction with your website, app, or other owned channels. It is the most direct user data you can get, which makes it the best asset for fine-tuning targeting.

Such data is vital for understanding how customers interact with your business. Unlike third-party data, which is unreliable and sometimes compromised in accuracy, first-party data is accurate and reliable and is always there for your business to use. First-party data includes user behaviors, preferences, and purchase history. It can help you segment your audience precisely. It’s also relatively easy to gather and handle such data in a way compatible with data privacy regulations and directives you must obey.

How to collect first-party data and use it:

• Use first-party user data with the help of sGTM.
• Encourage your customers to create accounts.
• Ask for feedback and study it.
• Make polls, surveys, quizzes, and questionnaires.
• Use the power of CRM systems.

One of the best ways to use first-party data effectively is to implement server-side tracking. Many platforms already support offline conversions, and you can integrate offline conversion tracking by using server Google Tag Manager container. This integration is possible because sGTM can directly communicate with marketing or analytics platforms API. Webhooks from your CRM or POS can be configured to send data to server Google Tag Manager, which distributes the information about offline conversions for analytics and ad network use. When you set up offline conversions through sGTM, you get a cost-effective solution that works in real-time.

When you set up server-side tracking, and web tracking is blocked, you can still send user data (provided you have the needed consent). Due to this, advertising platforms can still understand what kind of user is in front of them and attribute conversions to the company effectively. With server-side tracking, advertisers can understand their target audience better and gather a refined remarketing audience. With Stape, you can set up Facebook offline conversions, Google Ads offline conversions server side, Snapchat Conversions API, LinkedIn Conversion API and more.

As mentioned above, contextual advertising targets ads based on the webpage context rather than user data or tracking cookies. With the help of contextual advertising methods, you can deliver targeted and relevant advertisements to the users while staying privacy-compliant.

To excel in contextual advertising, you need to shift your perspective. The point of contextual marketing is not to lead people to a destination you wish to get them to but rather to deliver your compelling message at the right time and place. To the right user, of course.

For instance, if a user reads a blog post about cookieless advertising, it is logical to show them an ad about a cookieless tracking solution.

Below, you will find a classic example of contextual advertising. A user looking for a particular product on Google will instantly see ads offering more or less precisely what they are looking for.

Contextual ads do not look intrusive while staying highly relevant. Compared to traditional cookie-based ads, contextual ads get more clicks and engagement. They also help build customer loyalty by catering to the user's needs and interests, which leads to better cost-effectiveness of such ads.

While contextual ads have a lot of benefits, they also have some limitations. Here are just a few to keep in mind:

• User targeting is limited to the context of the page the ad is displayed on, so broader behavioral patterns are not noticed.
• If the ads are too similar to the page content, the users might ignore them.
• Competitor ads inevitably show up next to the relevant content at some point.
• Complex setup. Contextual advertising requires detailed analysis and management of content.
• Privacy issues. Users may find contextual ads invasive.
• Compliance issues. Legal restrictions on data use can limit the effectiveness of contextual ads.

Instead of relying on cookies, you can use unique identifiers like email or phone numbers for targeting. Identity solutions allow advertisers to reach their target audience across devices, browsers, and platforms. An advanced identity-based solution allows building a detailed profile of consumers across all channels, profiles, and devices. This, again, leads to better-targeted ads.

Below are two examples of popular and comprehensive identity solutions:

• Unified ID 2.0. This open-source framework uses hashed and encrypted email addresses to resolve identity across the advertising ecosystem.
• LiveRamp’s IdentityLink. It allows connecting first-party data to a universal identity graph. It makes people-based marketing possible across different channels.

Device fingerprinting is a technique used in cookieless advertising to track and identify devices without relying on cookies. It collects various attributes from a user's device and browser to create a unique identifier, or "fingerprint." When a user goes to a given website, the site collects various data points from the user's device, like browser type and version, operating system and version, screen resolution, fonts, plugins and extensions, timezone, language, and hardware configurations.

All the data collected is used to create a unique identifier (fingerprint) of the device. This identifier can recognize the same device across different sessions and websites. Since user data collected to create a fingerprint usually remains unchanged for a long time, it lets advertisers track user behavior and target ads without using traditional cookies effectively.

There are some ethical and privacy considerations regarding device fingerprinting. Device fingerprinting is less evident to users than cookie tracking, so it raises some user concerns. Some privacy-oriented tools and browsers have already tried to reduce the effectiveness of fingerprinting.

Cookieless targeting offers many benefits to advertisers, even though it can be challenging to understand initially. As the digital ecosphere evolves, it becomes clear that relying solely on cookieless targeting isn’t a safe choice. As they say, don't put all your eggs in one basket. Even though targeting cookies may work for you now, why miss out on all the opportunities cookieless targeting offers?

Here are the main advantages:

Enhanced privacy and compliance. Focusing on first-party data allows you to achieve much more control over how you gather, handle, and store user data. This makes it easier to comply with the applicable regulations.

Another benefit of cookieless targeting is improved user experience. Consent fatigue is real, and so is users' aversion to staying on websites that load slowly due to overload with third-party tracking tools. With cookieless targeting, you remove the annoying pop-ups from the client’s eyes and help them get to the point they need faster.

Ready for the cookieless future. Getting on the cookieless train is not a must now; it’s more of an option you can consider. However, as the traffic jams on the advertising highway get more intense, it often takes a new type of fuel to move forward. Using cookieless targeting could be just what you need to streamline your advertising before the cookieless era kicks in.

Naturally, embracing new ways of doing usual things requires some resource input and poses challenges.

Regarding cookieless advertising, you need to balance effective targeting with user privacy. Users want to receive relevant ads, but they do not want to tolerate their privacy being violated. It’s challenging to keep up with all the privacy regulations, directives, and requirements. For this reason, we recommend seeking legal advice regarding handling personal user data.

Take a look at the stats of global consumer perception of target advertisements and personalized content worldwide.

Data source - Statista, as of November 2023

More than ever, advertisers need to be transparent about what user data they collect and how they store and handle it. User consent is also of the utmost importance. This presents a tricky task for advertisers and business owners: make data collection and processing consent easy, transparent, and non-intrusive.

Lastly, switching to new tools and platforms requires some investment. Depending on your chosen solution, you might need to hire new team members, train existing ones, or pay for subscriptions or software licenses. Luckily, companies that believe in their product offer a free trial or plan that lets advertisers try it out to see what it can do for their business. Stape also offers a free plan to explore the benefits of server-side tracking without any hidden costs.

Cookie-based targeted ads carry both benefits and drawbacks that advertisers should weigh alongside the cookieless alternatives discussed above.

Advantages:

• Precise behavioral targeting. Cookies track user activity across multiple sites and sessions, allowing advertisers to build detailed behavioral profiles and show highly relevant ads.
• Established infrastructure. Most ad platforms, analytics tools, and attribution models were built around cookie data, making integration and reporting straightforward.
• Effective retargeting. Cookies make it possible to identify users who previously visited a site or viewed a product and re-engage them with follow-up ads.
• Simpler measurement. Cross-site tracking via cookies has historically made it easier to measure ad performance and attribute conversions to specific campaigns.

Disadvantages:

• Regulatory exposure. Cookies fall under data protection laws like the GDPR and CCPA, requiring consent management and increasing compliance overhead.
• Declining reliability. Browser restrictions, ad blockers, and cookie rejection reduce the completeness of the data these ads depend on.
• Consent fatigue. Frequent consent prompts lead users to reject tracking altogether, further shrinking the addressable audience.
• Limited cross-device accuracy. Cookies are tied to a single browser, so they struggle to track users consistently across devices.
• Shorter data lifespan. Some browsers, such as Safari, limit cookie lifespan, which shortens attribution windows and causes late conversions to go unrecorded.

It all boils down to this: cookieless targeting is a future-oriented advertising solution that helps deliver personalized advertisements while maintaining user privacy and ensuring compliance with evolving data regulations.

Advertisers can effectively reach their target audiences without relying on traditional cookies by using first-party data, contextual advertising, identity-based solutions, and device fingerprinting.

Enhanced data privacy compliance, improved user experience, and readiness for the cookieless future make cookieless targeting a valuable strategy for modern advertising.