Nov 4, 2022

Cookies Are Dead: How the Cookieless Future is Shaking Up Affiliate Marketing

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What are cookies?

Third-party cookies are small text files placed on your computer by websites you visit. They track online activity and can contain a wealth of personal information. Third-party cookies are particularly controversial because they allow companies to collect data about people without explicit consent.

Why is Google phasing out cookies?

Google has stated that it is discontinuing third-party cookies because users "demand more privacy, including transparency, choice, and control over how their data is used."

According to a KPMG survey, 86% of people felt growing concerns about their data privacy, while 78% expressed concerns about the amount of data collected.

Moreover, with the introduction of GDPR and California's CCPA, the legal repercussions for mishandling user data have become much more severe. So it's not just Google trying to be nice; the company is also trying to avoid potential legal problems.

What are the alternatives to cookies?

Google has already begun experimenting with several potential replacements for cookies, including Federated Learning of Cohorts (FLoC) and Privacy Sandbox. We should all be prepared as this is really happening. Cookies will eventually become a thing of the past. So it is better to prepare for the cookieless future sooner rather than later!

What does it all mean for content creators?

Google's decision to phase out the use of cookies presents challenges for content creators who rely on affiliate marketing as a source of income. Without the ability to track users, creators may only receive compensation for sales that occur directly after a user clicks on the affiliate link (and not in a 30 days timeframe like it is working at the moment). It means that creators will need to adapt their monetization strategies.

What does it all mean for eCommerce businesses?

When cookies are eliminated, one of the initial impacts will be the reduction of third-party audiences. These people can only be combined and marketed by data collected through cookies. If there are no more cookies, these groups would become so small that marketing to them would not be financially feasible. This would also make ads less effective since they likely wouldn't match the interests of viewers.

How to adapt to the world without third-party cookies?

The phasing out of third-party cookies will cause quite a stir in the online community, with customers, content creators, and direct-to-consumer ecommerce brands being impacted. Consumers are getting more privacy but less personalized content, ads, and onsite user experience. eCommerce businesses will need to find other ways to track user behavior and target ads.

One solution is to prioritize building a strong first-party data strategy. This means collecting customer data directly through their own website and using it to personalize the shopping experience (i.e., website registration and email marketing).

Content creators, such as influencers and publishers, can consider alternative forms of monetization, like launching an online marketplace with products from their favorite brands. This will allow them to continue to monetize their content without cookies.

Some of the benefits of launching an online marketplace include:

Curate products from your favorite brands: Offer your audience the products that you love and use yourself and make money from it
Become independent from third-party affiliate networks:
Gain control over customer service: You will own the process and be able to ensure the best customer satisfaction.
Earn a much higher commission than through affiliate marketing: Unlike with the affiliate networks, with your own marketplace, you are the one who decides on the commission rate - so it is up to you how much you will earn from each sale.
Take advantage of the elimination of cookies: When that process begins, brands and online stores will have it much more difficult to advertise their products, not to mention that it will become much more expensive. Here you come with your marketplace and loyal audience that doesn't depend on website cookies.

Launching an online marketplace with Vendo is easy and quick. No coding is required! Just set up an account and follow the instructions. Then you will be able to effortlessly add as many brands with stores on Shopify, WooCommerce, and Magento as you like!