Website Cookies vs. IP Address Intelligence

For years, the amount of data marketers have been able to gather using cookies has been shrinking. In recent years we’ve seen a trend toward increasing privacy and reducing the ability for marketers to use cookies for website visitor tracking, ad retargeting, content personalization, etc. In this article, we will discuss the technical, societal, and legislative factors that are leading to the decline of third-party tracking cookies and what we, as marketers can do about it.

What is a Cookie?

Before we get into the death of the cookie, we should talk about what a cookie actually is. At a basic level, a cookie is a small text file placed by a website on your computer when you visit. This file stores information about your activity on the site, such as page views, login credentials, and purchases, as well as any additional information you voluntarily give the website like your email or postal address. This information allows websites to deliver tailored content to their visitors, remember login credentials, set language preferences and a wide range of other functions that generally enhance the overall user experience.

However, not all cookies are the same and an important distinction should be made here. 

First-party cookies are placed on your computer by the website itself for the purpose of providing enhanced user experience (as I described above). These cookies are generally considered “helpful” and as such are currently not under threat of disappearing any time soon. 

But another type of cookie exists that sometimes blurs the line between helpful and invasive – the  third-party cookie. A third-party cookie is essentially the same as a first-party cookie in that it is a text file used to store information. However, these cookies are placed on your computer by advertisers and are used to track your browsing history from one site to the next with the end goal of finding out what your interests are and using this information to serve you targeted ads. I’m sure many of us have noticed if you visit websites with a similar theme (surfing for example) you’ll tend to see a higher percentage of surfing-related ads. While this practice might seem commonplace today, many people find the use of their personal data for advertising to be an invasion of their privacy.

The State of Cookies Today

There’s no way to sugar-coat it, third-party cookies have been slowly dying for years, and recently, it seems like this decline has been increasing rapidly. But why? Why are third party cookies being picked on? In our research, the decline can be boiled down to three major factors: societal, technical, and legislative.

  • Technological Factors: On the technology side, for the past few years, various browser providers (Safari, Firefox, etc.) have released updates to their services that have drastically reduced the effectiveness of third-party cookies, and more recently, have blocked them all together. But these two browsers only make up about 20% of all internet traffic. The biggest hit to the cookie industry came recently when Google announced it would completely stop supporting third-party cookies by 2022. Why is this important? Because Chrome represents around 70% of all internet users globally. One by one the companies that provide the means for everyday people to access the internet are making it nearly impossible for third-party cookies to be used.

    Finally, because cookies operate through the browser itself, the browser providers have always maintained total control over which cookies they allow, and which ones they don’t. And as we’re seeing now, the decisions browser providers are making about cookies can have industry-wide ramifications that have the potential to completely change the marketing landscape at a moment’s notice.
     
  • Societal Factors: In recent years, there has been an undeniable trend toward increasing personal privacy. With the explosion of social media, the amount of data associated with each individual person has increased dramatically. However, highly publicized data breaches like Facebook’s Cambridge Analytica scandal have thrown not only Facebook, but other companies that handle individual consumer’s data into the spotlight, and shown that in many cases their means of protecting personal data is severely lacking. This has led to an understandably large public outcry against companies that collect, store, and sell consumer data.
  • Legislative Factors: In response to the rising concerns over the vulnerability of individual data owned by companies, a slew of new legislation has passed that will make the use of third-party tracking cookies impossible.

Recent legislation, such as the General Data Protection Regulation (GDPR), requires websites that collect personal data to disclose to visitors how and why they are using their data – allowing them to opt-out of all non-essential cookies (i.e. the ones marketers use). This has resulted in the rise of many people opting out of cookies, which has caused a dramatic decrease in the amount of information available through third-party cookies in general. 

Furthermore, the California Consumer Privacy Act (CCPA), which will go into effect in January 2020, will provide Californians with greater control over how their personal data is collected, handled, and sold by organizations.

But there’s a bigger picture here: All of these browser updates, societal shifts, and legislation underscore the growing sentiment and trend toward increasing personal privacy, and in turn, making it much harder for marketers to use third-party cookies to track consumers. 

How Will This Impact Your Marketing Strategy?

Well, that depends on how you’re gathering information about your target accounts. If you’re currently using IP address intelligence or reverse IP lookup technology for your account-based marketing you are ahead of the game, nothing will change, carry on. However, if you’re currently using cookie-based tracking for content personalization, retargeting, or a myriad of other things we need to make an account-based marketing strategy possible, you might find a bumpy road ahead.

Third-Party Cookie Alternatives

If you’re reading this and a sense of panic has gripped you, I’ve got some good news and some bad news. The bad news is that for B2C marketers that rely on personal data to power their marketing strategies, we really don’t have an answer yet. It’s pretty much that simple. We don’t yet know of any alternative to cookies when it comes to tracking unique individuals or gathering personal data from website visitors. 

However, if you’re a B2B marketer, you can breathe easy knowing that even though third-party cookies are on their deathbed, an alternative exists that can provide the crucial information you need for all the account-based marketing activities your team is doing.

The Solution – IP Address Intelligence

IP address intelligence is the process of translating a company’s IP address into a set of traits about that company, called firmographics. These traits can include things such as company name, employee count, revenue, industry, geolocation, and more. Firmographics are the crucial pieces of information B2B marketers rely on to drive account-based marketing and deliver enhanced user experience on their websites.

What makes KickFire’s IP address intelligence unique is that because it is focused solely on businesses and not personal data or individuals, which makes it the ideal choice in a MarTech landscape that is becoming more and more hostile towards third-party cookies. In addition, because business IP addresses are typically static (i.e. less likely to change), the data collected based on a business IP address is not only more in-depth but is more reliable and less likely to become stale or outdated. 

The beauty of IP address intelligence is that this technology is browser-independent. Why? Because an IP address is associated with the device itself, not the browser. Meaning the dominance browser providers have over cookies, does not, and cannot ever apply to IP addresses. Regardless of the decisions the browser providers make, IP address intelligence will always be able to deliver the vital data marketers need to power their ABM programs. 

Over the years, we’ve witnessed the marketing landscape drastically change, but in our eyes, one thing has remained the same: IP address intelligence is and always will be the way forward for marketers. IP address intelligence is finally taking its place as the leading first-party intent tracking technology for businesses.

As we move toward a world of heightened individual consumer privacy and constantly changing browser restrictions, third-party cookies will soon breathe their last breath, and IP address intelligence will be there to ensure B2B marketers continue to get the account-level data they need to power their ABM strategies and even go beyond what they were able to achieve using cookies.

If you want to learn more about KickFire’s technology and how it can future-proof your digital marketing strategy, check out our TWIN Caching Guide.