The Death of Third-Party Cookies: Implications for Direct Marketing and M&A Activity

Third-party cookies are tracking tools used by companies to monitor user behavior across websites for targeted advertising. Google, which controls about 65% of the global browser market, recently announced it would keep third-party cookies in Chrome, while allowing consumers to more easily opt out, delaying their complete phase-out until 2025. This shift reflects growing privacy concerns and a broader industry move toward first-party data collection via contextual targeting and pseudonymization, and privacy-compliant marketing strategies.

As Google extends the lifespan of third-party cookies, marketers and agencies find themselves at a critical crossroad. A recent Lotame survey revealed that 65% of marketers and 54% of agencies remain highly dependent on cookies, despite the inevitable shift toward a cookieless future. While many players in the industry are adapting to alternative strategies like contextual targeting and pseudonymization, a large proportion of the industry has yet to pivot.

The implications extend beyond advertising. The direct marketing and ad tech sectors, already experiencing significant M&A activity, are grappling with how these shifts affect valuations and deal strategies. Companies built around cookie-based strategies face tough choices: reinvest, reinvent, or sell. Ad tech firms with future-proofed models are attracting higher valuations, as evidenced by multiples seen in recent deals like AdTheorent and Scibids.

For business owners eyeing an exit, timing will be key as buyers prioritize profitability and adaptability in a post-cookie world. Companies that pivot early to first-party data strategies will lead the space.

🔑 At Colonnade Advisors,we are experts in guiding businesses through M&A and capital raising within the direct marketing space. With over two decades of experience, we help maximize value for business owners.