Hi! I am Mikhail Trofimov, CEO & Co-founder of Bïrch.
I see a paradox at the heart of the internet. We want ads to be relevant — to show us the perfect pair of sneakers, a new gadget we’d love, or a concert happening next weekend. But at the same time, we worry about how much of our data is being used to make those recommendations. This dilemma—between personalization and privacy—defines modern digital advertising.
Yet, ad recommendation algorithms aren’t all that different from the ones that suggest videos on YouTube or posts in your Instagram feed. They use the same basic principles: learning what you like and delivering content that aligns with your interests.
For years, the digital economy operated on a trade-off. Users received free access to content and services, while advertisers gathered insights to make their messaging more relevant. This was the era of the third-party cookie, where brands could fine-tune their targeting and measure their impact with precision. Facebook’s Pixel provided businesses with behavioral insights, Google’s ad network mapped consumer intent, and advertisers relied on a network of signals to refine their strategies.
But as privacy expectations evolved, so did the regulatory landscape. Consumers became more conscious of data collection, leading to increased scrutiny and new regulations. In response, tech companies pivoted, gradually phasing out third-party cookies. This transition introduced hurdles for advertisers who had long depended on cookie-based tracking, but it also spurred new innovations aimed at balancing personalization with privacy. The future of digital advertising is now being rewritten—one where brands must rethink their approach to data and engagement.
The Rise of the Facebook Pixel
In 2015, Facebook introduced the Facebook Pixel, a breakthrough tool designed to help businesses understand and engage their customers more effectively. Brands quickly embraced it, as it provided valuable insights into customer interactions, website visits, and purchasing intent. By 2018, Facebook’s ad revenue had soared to $55.8 billion, a 37% increase from the previous year, largely driven by its sophisticated targeting tools.
Other tech giants weren’t far behind. Google’s DoubleClick network had long been a leader in digital advertising, while Amazon, Twitter, and Snapchat developed their own innovative solutions to refine user engagement and improve ad performance. As a result, the internet evolved into a more sophisticated ecosystem where brands could better understand and cater to their audiences.
And then came Cambridge Analytica.
The Scandal That Shook the System
In 2018, the world learned that Cambridge Analytica, a British political consulting firm, had siphoned the data of up to 87 million Facebook users — without their consent. The details were dystopian: quizzes disguised as personality tests, permissions buried in fine print, and microtargeted political ads that arguably influenced democratic elections.
The backlash was immediate. Mark Zuckerberg found himself in a suit before Congress, dodging pointed questions from senators who seemed only vaguely aware of how Facebook actually worked. The scandal wasn’t just a PR disaster — it was a turning point.
Legislation soon followed. The General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) put new walls around user data. Apple threw a wrench into digital tracking with its App Tracking Transparency (ATT) framework, which allowed users to opt out of being followed across apps. Over 96% of iOS users in the U.S. chose to opt out, crippling traditional ad targeting.
The Cookie Apocalypse
Google, the last bastion of third-party cookie culture, announced in 2020 that it would phase out third-party cookies in Chrome — by far the most widely used browser in the world, with a 65% market share. Marketers panicked. Without cookies, how would they track conversions?
This was akin to being thrown in without a flashers. But tech giants had a plan: server-side tracking and first-party data.
The Evolution of Server-Side Tracking
Facebook — now Meta — led the charge with its Conversions API, allowing businesses to send their own first-party customer data directly to Meta’s servers. Never one to lag behind, Google introduced Enhanced Conversions, which relied on hashed first-party data to track ad performance. Snapchat and TikTok followed suit, rolling out their own Conversions APIs, ensuring that their ad platforms remained viable despite tightening restrictions.
Then came the latest frontier: Conversion API Gateways.
Gateways and the Future of Tracking
As privacy regulations reshape the digital advertising landscape, platforms are moving toward Conversion API Gateways — self-hosted, independent solutions that allow businesses to securely manage and share encrypted first-party data with ad platorms, without relying on third-party cookies. These gateways aim to replace traditional tracking methods by facilitating direct and controlled data exchanges between brands and platforms while allowing businesses to fully own their data and ensure compliance with evolving data privacy laws.
A range of companies are developing Conversion API Gateways to help advertisers continue leveraging first-party data without relying on third-party cookies. TikTok Business Gateway enables brands to send server-side data for better ad targeting, Snapchat’s Conversions API (CAPI) enhances conversion tracking with improved privacy measures, and Google’s Privacy Sandbox is developing tools like Topics API to create interest-based advertising without tracking individual users. Meanwhile, Meta just released Signals Gateway, which is not just a tool for Meta’s dataset — it functions as an independent data-routing solution capable of connecting any data source to any destination.
The emergence of these gateways signals a fundamental shift: rather than relying on fragmented third-party cookies, brands must cultivate direct relationships with ad platforms to drive effective and privacy-compliant marketing. Just as Facebook Pixel became an essential tool a decade ago, server-side tracking and API-based gateways will soon become the industry standard. In the near future, every advertiser will need to transition to these technologies to remain competitive and continue leveraging data-driven marketing strategies effectively.
What Comes Next?
The shift away from third-party cookies is forcing marketers to return to fundamentals: building direct relationships with their customers rather than renting data from ad networks. In the age of AI, data is more than just a tool—it’s a valuable asset. Brands that invest in their own first-party data strategies gain a competitive edge, enabling them to train AI models for personalized marketing, improve customer experiences, and future-proof their advertising efforts. Brands that use first-party data see more than 23% increase in ad effectiveness compared to those relying on third-party tracking (Source: Meta Internal Study, 2023). Meanwhile, artificial intelligence and machine learning-driven targeting, including Meta’s Advantage+ solutions, will help bridge the gap left by cookie deprecation, providing advertisers with alternative methods to understand consumer behavior while balancing efficiency, personalization, and privacy compliance.
And so, the internet’s grand bargain is being rewritten.
The cookies may be gone, but what comes next may not even look like ads at all. Instead of interruptions, we will see content we want to engage with, a seamless blend of information, entertainment, and discovery. Brands will evolve from being mere advertisers to trusted communication channels, connecting with people through meaningful interactions rather than intrusive banners. The future is not about ads—it’s about a dialogue between businesses and consumers, built on relevance, trust, and mutual value.
