First-Party and Third-Party Cookies
There are actually two types of cookies, first-party and third-party.
First-party cookies are tracking codes created and stored by the websites consumers visit to help site owners collect data. Thanks to these cookies, your browser can remember usernames and passwords, as well as what you put in your online shopping carts. They also help sites learn about what visitors do on that specific property so site owners can enhance the user experience. This is why they are seen as “good” cookies.
Third-party cookies, on the other hand, are created by a party other than the website a consumer visits — so literally a third-party such as the advertising platform DoubleClick. These small files are stored on the user’s computer to track them across sites — and eventually to serve ads.
Because they are not limited to a single site, third-party cookies give a much more comprehensive sense of a consumer’s online behavior. Advertisers can then tap into this data to build profiles and retargeting lists. But they also allow companies to acquire a lot more data than most consumers realize. This is why third-party cookies are considered “bad” cookies.
ITP, ETP, and the Privacy Sandbox
With advances in technology and a greater understanding of customer needs, it’s become an absolute priority to change how online advertising works. As a result of this progress, legislators and technology platforms have begun to rally around a digital world built upon privacy and transparency.
On the legislation front, there have been a number of laws enacted; we have the privacy and security law in Europe known as General Data Protection Regulation, or GDPR, which says that consent for data collection must be “freely given, specific, informed, and unambiguous.” Then, in 2019, Europe’s highest court ruled that brands cannot simply display a pre-checked box to get consent to store cookies but must receive active consent from consumers in the E.U. Meanwhile, the California Consumer Privacy Act (CCPA) similarly gives residents of the U.S. state more control over the data businesses collect about them.
On the technology side of the house, we have companies like Apple and Mozilla, who introduced enhanced cookie blocking technologies with Intelligent Tracking Prevention (ITP) and Enhanced Tracking Protection (ETP). ITP and ETP prevent third-party cookies from ever being stored in a browser — or sneaking in disguised as first-party cookies. What’s more, Apple and Mozilla have made their cookie blockers active by default.
Compared to Apple and Mozilla browsers, Google Chrome has been slower to respond to privacy concerns. This is due, in part, to Google’s robust advertising business, earning the platform nearly $135 billion in revenue in 2019. However, Google announced its Privacy Sandbox initiative to prepare businesses for a third-party cookie-less future. They have recently updated their timeline for phasing out third-party cookies on Chrome until the second half of 2024.
Reaching a “middle ground,” where both consumers’ and businesses’ needs are met, is the primary objective of these activities. Legislators and technology platforms working together on this opportunity will continue to be the key to reaching this brighter future.
Marketing in a (Third-Party) Cookie-Less World
The good news is that even without third-party cookies, digital advertising will go on. We recommend that you start researching alternatives to ensure that your brand is ready for the next marketing evolution stage.
One option is contextual advertising or advertising based on site content rather than consumer behavior. It’s an older tactic, but it could see a revival as it enables advertisers to display pay-per-click (PPC) ads on sites that rank for the same keywords the ads target.
Another strategy is people-based advertising, a marketing tactic developed by Facebook, which uses an identifier for the consumer rather than the device. This strategy lets marketers target Facebook users based on demographics and interests — but not their names. But, of course, all social media platforms offer advertising solutions that target their users, so you may simply want to increase investment there.
It’s also important to remember that only third-party cookies are going away. That means brands can continue to tap into their first-party data for the foreseeable future. (This is also an excellent time to invest in a customer data platform to help glean additional insights from that data, such as behavior across touchpoints.)
For example, use customer emails to directly send relevant content and marketing messages and serve email-based ads. You can also use those emails for contact list retargeting, a practice in which an advertiser shares its email list with an advertising platform, which then targets the users with those emails or lookalike consumers.
And don’t forget Google may very well find that ideal middle ground between third-party cookies and cookie blockers and figure out how to maintain a “healthy, ad-supported web” with its Privacy Sandbox. But, even if it doesn’t, data management firms are hard at work on alternative tools as well.
The Perfect Balance of Chocolate Chips
No post about web cookies would be complete without a reference to baked goods, so here we go: the earliest cookie-cookies date back to 7th century Persia, which was reportedly one of the first countries to harvest sugar. Seven hundred years later, they were a hot commodity in the Renaissance, and their popularity endures. So take heart, advertisers: just as these cookies have evolved, so will digital cookies. At least to an extent.
If you like your cookies with milk, you’re in luck — the glass-is-half-full spin on the demise of third-party cookies is there’s innovation to come as browsers shift toward consumer privacy, which is a good thing. If Google or a data management firm can, in fact, pull off a healthy ad-supported web, everybody wins.
Besides, it’s never a good idea to put all your eggs in one basket, and if that basket to date has been third-party cookies, this moment of industry-wide experimentation and change is a perfect time to diversify. And if you’re looking for an effective partner to help guide the way, you’ve come to the right place.