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Third-party cookies for targeted advertising are being phased out on significant browsers, leaving some real estate tech companies wondering what’s on the horizon for the future of online house hunting.

It’s been over a year and a half since Google announced plans to scrap its third-party cookies on Google Chrome, following suit with other top browsers that have phased out technology that tracks web-browsing habits.

Google recently delayed its plans to stop supporting third-party cookies on Chrome by late 2023, nearly two years later than its initial time frame of early 2022.

According to a June 24 statement from the tech giant, the decision is meant to buy time for “further public discussion, continued engagement with regulators, and for publishers and the advertising industry to migrate their services.”

The U.S. Department of Housing and Urban Development (HUD) appears to be among the collaborating regulators. Last year, HUD announced that it has worked with Google to improve its online advertising policies to better align them with requirements of the Fair Housing Act, which prohibits discrimination in the sale, rental and financing of most housing in the United States because of race, color, religion, sex, national origin, disability and familial status. Getting rid of third-party cookies would greatly limit advertisers’ ability to target users for housing ads, which would violate the Fair Housing Act.

Leaning Into First-Party Data

For some real estate tech firms, shifting away from third-party data collection will not present any challenges, such as Real Estate Webmasters (REW), an industry-leading web design, CRM and lead-gen company, according to its CEO, Morgan Carey.

“The vast majority of the work we do for our clients with respect to marketing is in search engine optimization (SEO) and direct paid marketing using the Google adwords platform; as such, the removal of cookies is not significant to how we deliver our leads,” says Carey. “We see this change as driving more customers to REW for marketing.”

But the move is also viewed as an opportunity to increase the value of first-party data, say tech execs.

“We’ve been looking forward to this for a while because there are only going to be two real ways of doing advertising in the future,” says Eric Stegmann, CEO of TRIBUS, which builds custom real estate brokerage websites, adding that leveraging a brokerage’s client relationship management (CRM) and transactional data will be one of the most significant.

“The value of first-party data becomes ever more valuable, particularly for a medium or large-sized brokerage firm that has thousands of backed-up transactional records,” says Stegemann.

According to York Baur, CEO of MoxiWorks, companies that rely heavily on third-party cookies may be in for a tough transition.

“I kind of figured this day would come,” says Baur. “Granted, we are a sphere-oriented company, but this is part of the reason why I think over-reliance on internet lead generation—a cold lead generation where you have no previous relationship—is fraught with peril.”

That’s primarily due to a low conversion rate compared to first-party data use, according to Baur.

The phase-out of third-party cookies across heavily trafficked browsers is poised to degrade the conversion further, creating a problem for agents and brokers that rely on third-party lead generation firms.

“The irony of it is, if you simply pay attention as an agent, you can be immune to all these things and convert at over 70%,” Baur says. “We have all this energy being poured into something that converts at 1% and not nearly enough energy being poured into what converts at 70%.”

Instead of relying on “cookie technology” to generate leads, Baur says MoxiWorks recommends leveraging sphere-oriented interactions and relationships to yield direct data for their marketing efforts.

Carey echoed similar sentiments, adding that first-party data collection is the most reliable way to ensure compliance and high-quality data capture.

“I think the biggest opportunity for REW is in the fact that other vendors who rely more heavily on cookies for retargeting are going to struggle to produce results while our results will remain consistent and high value,” Carey says, adding that, “because our marketing, websites, IDX and CRM are all in one place (and on one domain) it gives us a significant advantage over other services that must share / trade data via API or other ingestion methods. We can set our own sessions and cookies for user data, and combine it with system and CRM history as well as MLS search behavior to provide high-quality insights into the consumer journey.”

According to Carey, retraining agents on first-party data collection and tracking in their CRMs will be essential for real estate tech vendors as Google cuts out cookies.

“I think this move is a good thing for the consumer as it forces marketers and vendors to ensure they are upfront about data collection and do so in a way that is clearly articulated and opted in by the customer,” says Carey.

Real Estate Portals Not Concerned

The incoming changes to Google Chrome—along with similar actions by other browsers—appear to be a non-issue for several real estate portals.

In an email statement to RISMedia, a Redfin spokesperson said the platform only uses first-party cookies to collect and store information from its site visitors to customize and personalize their browsing experience.

“Our cookies store your login information, so you don’t have to enter your username every time you visit Redfin.com, and make it possible to customize your experience based on your location, such as showing you the homes near you and the specific services we offer in your area,” Redfin wrote.

According to the statement, Redfin uses its cookies to deliver “a better experience” to consumers while on the site, but it doesn’t track their activity across the internet.

“We do advertise our services through Google and other sites; however, these marketing efforts are not reliant on third-party cookies,” Redfin wrote.

Zillow echoed similar sentiments, adding that the company has been moving away from using third-party cookies for a while, instead using its first-party data and focusing on optimizing its owned channels to communicate to users.

“To provide consumers with personalized and relevant advertising of homes that may interest them, we use a limited amount of information that’s centered around our users’ home shopping activity when using our platform,” said a Zillow spokesperson. “Protecting the privacy of our users is one of our highest priorities, and we strongly believe in transparency and customer choice, offering the ability for them to adjust cookie preferences or disable advertising cookies through our privacy portal.”

Homes.com representatives say they are waiting to see how things play out, especially as Google positions Federated Learning Cohorts (FLoC) as a potential replacement to third-party cookies on its browsers.

“We are going to see what Google comes up with,” says Grant Simmons, VP of Performance Marketing at Homes.com. “We’re playing a wait-and-see approach to better understand how good FLoC might be and how good our first-party data might be.”

In a nutshell, FLoC would create audience sets based on groups of people identified through browsing history and build out cohorts that can then be used for ad targeting.

There is a chance that targeting people for advertising will be potentially more difficult, but Simmons says Homes.com will reserve judgment as Google works out the FLoC system.

Jordan Grice is RISMedia’s associate content editor. Email him your real estate news ideas to
jgrice@rismedia.com.

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