Third-party cookies are fading: How Indian SMBs can adapt
The internet’s favourite tracking snack is disappearing. As third-party cookies crumble, here’s what small businesses need to know to survive the new privacy era.
For years, small businesses have relied on one quiet advantage of the internet: cheap, targeted digital ads.
That advantage is now starting to fade. The digital advertising world is undergoing a major shift as third-party cookies, once the backbone of personalised online advertising, are being phased out in the name of user privacy.
While large tech platforms may adapt easily, many small and medium-sized businesses in India could see their online customer acquisition fundamentally change. In this article, you’ll learn what third-party cookies are, why their disappearance matters, and how small Indian businesses can adapt to a more privacy-focused internet.
What are third‑party cookies?
Cookies are tiny pieces of data that websites save on a user’s browser. First-party cookies help websites remember you, from your preferences to your login details. However, third-party cookies, which come from domains other than the website you are visiting, serve a different purpose.
They track user behaviour across multiple websites, allowing advertisers to personalise ads, measure their effectiveness, and retarget users. These cookies have powered over 95% of personalised digital ads globally, but growing concerns about privacy and regulations such as GDPR and CCPA have led to their decline.
Why are cookies being phased out?
Google first announced plans to phase out third‑party cookies in 2021, with the original target for completion set for 2025. The idea was that browsers such as Chrome would stop supporting these cookies, forcing the industry to adopt more privacy‑centric methods.
However, regulatory pushback slowed the process, and in mid‑2024, Google paused full removal. Instead, it is testing alternatives such as the Privacy Sandbox and context‑based approaches. Still, other major browsers like Safari and Firefox have already blocked third‑party cookies, making the shift inevitable.
In India, where Chrome holds a dominant market share (over 85% of users), this change will significantly impact businesses that rely on cookies for their advertising efforts.
What this means for small businesses in India
For small businesses and startups in India, digital advertising has been an affordable way to connect with customers. Many rely on third‑party cookies for retargeting, personalised ads, and measuring ad effectiveness. However, the removal of these cookies presents several challenges.
According to research by Adobe, many Indian brands (82%) depend on third‑party cookies, and more than 60% of leaders fear that the shift will harm their business. This is particularly concerning for smaller businesses, many of which lack the resources to collect and analyse first‑party data effectively.
Without the infrastructure to capture detailed user data, these businesses will likely face higher costs and reduced ad efficiency. An Economic Times report suggests that India’s digital ad market could lose up to Rs 50,000 crore by 2025 due to the cookie phase‑out.
Challenges small businesses now face
The transition from third‑party cookies exposes several key challenges for small businesses:
1. Limited first‑party data
Many small businesses don't yet collect data directly from users, making it difficult to tailor advertising once cookies are phased out.
2. Retargeting issues
Retargeting ads that follow users across the web are a staple for conversion. Without cookies, this becomes inefficient or impossible unless alternative systems are built.
3. Resource constraints
Investing in software and teams to manage data isn’t feasible for many startups and micro businesses. Many are still at a stage where basic digital presence matters more than data insights.
4. Increased reliance on big platforms
Without their own data, smaller advertisers may increasingly rely on tech giants like Google and Meta that already have vast first‑party data. This shifts more power towards these platforms, often with higher costs.
How small businesses can adapt
Although the phase‑out of third‑party cookies presents challenges, there are ways for small businesses in India to adapt and continue reaching their audience:
Invest in first‑party data
Businesses should begin collecting user data directly through sign‑ups, loyalty programmes, and other customer interactions. This will enable them to create more personalised marketing strategies and maintain customer relationships.
Shift to contextual advertising
Instead of tracking users, place ads based on the content of the webpage. For instance, a fitness brand could advertise on a health blog without needing user tracking.
Collaborate for data sharing
Second‑party data involves sharing anonymised data between trusted partners. For example, local businesses in the same niche might share insights to improve targeting without third‑party cookies.
Explore privacy sandbox tools
Google’s Privacy Sandbox provides alternatives for targeted advertising that don’t rely on individual user tracking. Small businesses should explore these tools to continue reaching their audiences effectively.
A new privacy‑centric era
The removal of third‑party cookies marks the beginning of a more privacy-conscious internet. While small businesses in India face challenges adapting to this change, it also provides an opportunity to build stronger, more direct relationships with customers. By embracing new technologies and data strategies, small businesses can navigate the new privacy‑focused landscape and thrive in the evolving digital advertising world.