The Collapse of Third-Party Cookies and the First-Party Data Arms Race

For years, performance advertising ran on a shared illusion: that third-party cookies would be around forever. They weren’t perfect, but they worked well enough to power attribution, targeting, and optimization across the open web.

That era is ending.

As cookies become increasingly useless and regulation tightens, performance advertising is undergoing a structural shift. The center of gravity is moving away from rented data and toward owned data. Performance is increasingly dependent on who owns the signal.

This shift is triggering a first-party data arms race.

Performance marketers are scrambling for signal

Performance advertising depends on feedback loops. You spend money, observe outcomes, and optimize. Cookies made that loop cheap and accessible. As they fade, marketers are scrambling to rebuild signal in other ways.

We can expect a surge in:

• Email capture strategies and gated experiences
• Loyalty programs and memberships
• App installs and logged-in environments
• Direct-to-consumer storefronts designed as data engines, not just sales channels

Identity is becoming the golden goose. Who is the customer? Can you recognize them again? Can you measure what worked?

If you can’t answer those questions, performance breaks down fast.

New infrastructure is emerging, but it’s not neutral

To replace cookies, the industry is rolling out new technical scaffolding: clean rooms, identity graphs, hashed emails, data partnerships, and privacy-safe matching environments.

On paper, this sounds like progress. In practice, it raises uncomfortable questions.

Clean rooms are expensive and complex. Identity graphs are only as good as the data feeding them. And many of these systems are controlled by the same large platforms that already dominate performance spend.

Which leads to the real issue.

Are we creating a data oligopoly?

The uncomfortable truth is that first-party data is not evenly distributed.

Large brands with millions of customers, massive logged-in ecosystems, and years of historical data are entering this new era with a huge advantage. They can train models faster, build better lookalikes, and negotiate favorable partnerships. They can afford the infrastructure behind a first-party data strategy.

Smaller brands don’t have that luxury.

So the question becomes: are we heading toward a performance advertising world where only the biggest players can truly compete? Where performance is gated by data scale rather than marketing skill?

That is the key risk at this juncture. 

If access to performance depends on proprietary data moats, performance becomes centralized in the hands of the biggest brands.

What this means for smaller brands

Smaller and mid-market brands aren’t doomed, but the playbook has changed.

Owning some first-party data is now table stakes. But scale alone can’t be the only path forward. Otherwise, performance advertising collapses into a winner-take-most model dominated by a handful of giants.

The opportunity lies in systems that:

• Work with sparse or imperfect data
• Optimize based on outcomes (not just identity)
• Combine contextual signals, behavior, and real-world results
• Offer transparency instead of black-box dependency

Performance has always been about efficiency: doing more with less. That principle matters more now than ever.

The real question

The collapse of third-party cookies is forcing the industry to confront a hard question:

Are we building a more accountable, privacy-safe performance ecosystem, or just replacing one opaque system with another, even more concentrated one?

First-party data is powerful, but performance advertising shouldn’t be reserved for companies with the biggest databases. If that happens, we’ve lost the plot.

The next chapter of performance will be defined by who can turn limited signal into outcomes without locking the rest of the market out.

That’s the arms race we’re in. The winners won’t be the ones with the most data, but the ones who know how to use it best.