How Does Ad Tracking Work Without Cookies?

by | Jun 17, 2023 | Ad Strategies

Cookieless tracking is what you need as more web browsers block third party cookies and interfere with traditional conversion tracking. All of the major ad platforms are pushing forward with new methods of tracking conversions and targeting audiences. Google Ads provides Customer Match audience lists and Enhanced Conversion Tracking to help us. These new systems help to preserve the performance of ad accounts in a world that is increasingly concerned about privacy.

With tracking cookies blocked, if you perform a search and click through to the website, there is no way to add you to a cookie-based audience. If you purchase, there is no way to add you to an audience of past purchasers built with cookies. And in many situations, there is no way to match your purchase back to the ad click to give credit in Google Ads for that ad click resulting in a sale. What can we do instead to solve legitimate business tracking needs without cookies while also respecting user privacy?

Some Background

When we use services from a platform such as Google, we are consenting to Google’s terms and conditions and agreeing to allow Google to advertise to them and track them. Because we log in to those services when we use them, Google knows our email addresses. Google provides settings that allow users to opt out of any remarketing ads, but many people stay opted in. For people who haven’t opted out, and who are logged in, Google knows which email addresses performed which searches and clicked on which ads. Google has the necessary permission to show that user ads and provide anonymized data on purchases they make after clicking ads.

On our end, we know if someone with a given email address is on our email marketing lists. We also know if someone with a particular email address has made a purchase. And if we both know some common information like an email address, it turns out we can do a lot to solve these emerging tracking problems.

Google won’t share user email addresses with us, and we also typically can’t share those email addresses with Google. So, they came up with a system to allow us to figure out if we have email addresses in common, that we can use to enhance the accuracy of conversion tracking and add people to audience lists for future ad targeting.

How Cookieless Tracking Works

The way it works is simple. We take an email address and transform it into a unique string using a one-way cryptographic hash function (SHA-256). This is the same system used to securely encrypt passwords so they cannot be decrypted. This function is “one way” in that you cannot reverse it. There is no way to decrypt a hashed string and determine the original email address used to create it. Once we have this hash, we can compare it with Google’s hashes, and determine if there are matches or not. We are able to determine if we have a match without disclosing the actual user data.

So, for example, Google has your email address “you@yourdomain.com” in their system and has hashed that to the string “6c6d62ca9afded75c96053fa3bbc607309ea89493fd565310ea8a573781c958e”. But if we take that purchase record and do our own hash of “you@yourdomain.com” to the string “6c6d62ca9afded75c96053fa3bbc607309ea89493fd565310ea8a573781c958e” we can pass that over to Google in something like a game of Go Fish.

“I have 6c6d62ca9afded75c96053fa3bbc607309ea89493fd565310ea8a573781c958e, do you?”

Preserving Privacy

Google won’t actually give us a straight answer on that. They won’t reveal anything that can be traced back to an individual user. But if we tell them a hash string for a user that they know clicked an ad, and we tell them that user made a purchase, then they will update our conversion data to confirm that sale came from an ad click. This system is called Enhanced Conversion Tracking. And if we give them a big list of hashed user data they will add users who match to Customer Match audience targeting lists. Those audiences allow us to target those users in the future. Of course this only works for users who have opted in to this tracking. And those users can opt out at any point. But most don’t opt out.

We can never identify individuals with this method. But we can create audience lists of people who are on our email newsletter lists, past purchasers, and so on. And those people tend to be more valuable to advertise to over time.

Further Reading On Cookieless Tracking

Here is information on how Google uses the hashes: Google Ads Help: How Google uses Customer Match data

Here’s a brief overview of how this works for creating audiences: Google Ads Help: About the customer matching process

And here is a brief overview of their new program to enhance conversion tracking using this method: Google Ads Help: About enhanced conversions

Impacts

This system is a great way to improve conversion tracking and improve the results of ad campaigns. As blocking becomes more common, we’re losing key information about which actions lead to sales that is core to the ongoing optimization of ad accounts. Without these systems, measured sales under report what is actually going on. If we can improve that accuracy as much as possible, it helps in being more efficient both with achieving returns as well as accurately reporting on those results. Even small improvements in conversion tracking can lead to a significant increase in performance over time due to a compounding snowball effect.

But also, many competitors are not using cookieless tracking because there is more complexity involved in these integrations. So, there’s a competitive advantage aspect to this as well. If we have better information for bidding in the ad auctions, we can outperform competitors who don’t set-up these systems. We can gradually push their results down as ours go up. Getting as many of these systems set-up as soon as possible is key to building a longer-term strategic advantage.

Be Prepared!

Google will start blocking a small share of third party cookies in the Chrome browser in Q1 of 2024. They will phase out all third party cookies by the end of 2024.

You want to have Google Customer Match audiences set up now. And you want to have Google’s Enhanced Conversion Tracking set up now. These systems have equivalent versions with slightly different names on all of the major ad platforms. So you will need to set up every ad platform separately.

Do you know if these systems are already set up on your ad accounts? If not, talk to your staff and talk to your ad agency. Make sure you’re up to speed on these issues. Many of your competitors are lagging behind the curve, but they are going to come around. The sooner you get this right, the more profitable your advertising efforts will be.

Would you would like to work with an ecommerce-focused ad agency that stays ahead of the curve on issues like cookieless tracking? Consider getting in touch with us to see if there’s a fit.

Interested in Working Together?

Psyberware specializes in managing online advertising for ecommerce businesses. If you want to build a great relationship with a group of dedicated people who really understand how to drive profitable growth for your ecommerce site, get in touch!

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