2021 will withstand the privacy focus trend that is troubling the ad industry. IAB 2021 Marketplace Survey reported marketers’ biggest concerns are the loss of mobile identifiers and crumbling of the third-party cookie. Ad tech is going to have to change. What does the future hold for desktop affiliate marketing after cookie tracking will come to a halt?
Privacy-First Means Future-Proof
Governmental policies such as GDPR and CPRA are following users’ requests for more privacy and choice online. Almost three years since the birth of GDPR, privacy requirements only became stricter. What has started as “the right to opt-out” became “the need to opt-in”.
Every website owner in the EU has already felt the effect of GDPR. Compliant websites need to obtain user consent to be tracked. That means all users who do not give explicit consent (read: click “accept” on your cookie popup) will be invisible. We could observe an instant fall of web tracking data and drop in the use of third-party cookies.
One should understand privacy changes as beneficial for the whole ad ecosystem. In the end, users will reward transparent companies who offer them a choice when it comes to online privacy.
The Role of Cookies in Affiliate Marketing Tracking
Let us refresh our memory on what role do the cookies have in affiliate marketing. An advertiser runs an affiliate program and finds suitable publishers that will run an ad unit, typically on their website. A user that clicks on this ad (supported by affiliate link) is redirected to advertiser’s website. The user then completes the desired action (purchase, sign up, etc.). Since the affiliate link typically redirects to ad servers hosted by an affiliate network, they drop a third-party cookie in this process.
It is no surprise affiliate marketers are concerned about the future of their business. A browser which blocks that cookie drop restricts the ability to track and attribute the user’s action to the specific publisher. That means the advertiser would not understand where the customer came from while the publisher would lose attribution for their ad spend.
While third-party cookie blocking has been around for a while, the majority of internet users were not affected. With almost 70% of worldwide market share, Chrome has fallen in line with its competitors’ steps and already has blocking in place. Furthermore, in 2022 Chrome browsers will also disallow third-party cookies. The search giant said it intends to build “a secure environment for personalization that also protects user privacy.”
It is increasingly clear we should take user privacy very seriously. While the ad industry will be affected, there is no need for panic.
What Will Happen to Affiliate Marketing After the Cookie Crumbles
Major stakeholders are fully aware that access to free online content lies on the shoulders of advertising dollars. However, it is safe to say the phasing out of third-party cookies will not end affiliate marketing. Alternative tracking options are available and are less personally invasive solutions have been evolving to fill the gap that will be created. There are a few feasible ways affiliate marketing can implement tracking without the use of third-party cookie:
- First-party cookies: Tracking can be done with first-party data the website owner collects. It simply requires business partners to synchronize their data in the background.
- Server-to-server tracking: Server-to-server tracking allows the affiliate and Advertiser to track without the use of cookie placement. Servers on both sides of the relationship interact when an action or conversion event occurs. Most affiliate networks have been switching to this more accurate form of tracking over the past years in preparation.
- Besides that, IP-based tracking and ETags tracking will remain an option.
Cookies have another important function in online marketing: targeting. Affiliate marketing is well-positioned in this regard as it does not rely on third-party cookies. The are other options available to replace using cookies – predominantly native and contextual.
Relative to the rest of the online advertising ecosystem, affiliate marketing is not going through a 180-degree reform. That does not mean it is ignorant to it. Publishers, advertisers and networks still need to prepare for the near future. Make sure that every stakeholder you work with is aware of what does the cookie deprecation means. And equally important, make sure you have built a future-proof marketing strategy for 2021. For any further questions do not hesitate to contact our team.