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All you need to know about Third-Party Cookies

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The web is constantly evolving, but these changes are happening more rapidly than ever before—especially when it comes to consumer privacy and data.  At Vindicta Digital, we help you understand everything from the building blocks of web browsing to the upcoming regulations and guidelines that will forever alter the digital advertising landscape.

In the following blog article, we take a deep dive into how cookies work, why they are important, and how advertisers should prepare for a future without (or with severe limitations on) cookie tracking.

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What is a cookie?

A cookie is a small text file in the browser that websites can write to, specific to a device (sometimes referenced as the user). Cookies have been around since 1994 with the initial goal of improving the e-commerce experience.

What are the types of cookies?

First Party Cookies

First-party cookies are created, published, and controlled by the website you visit and help with things like remembering your shopping cart, items you viewed, and preferences to improve the user web experience. First-party cookies collect behavioural data to help the website owner improve their services. This type of data collection only relays data back to the owner of the web domain.

Third-Party Cookies

Third-party cookies are set by a third-party server (ad-tech) via a code placed on the web domain by the owner of that domain. The data collected on third-party cookies are accessible on any website that loads the third-party server’s code. Third-party cookies allow advertisers to track users across the internet (cross-site) and target advertising wherever that user goes.

How Third-Party Cookies work

The most common third-party entities are advertisers, marketers, and social media platforms.

Third-party cookies… one common example. Let’s say earlier in the week you looked up some vacation rentals in Cancun. You browsed a few websites, admired the photos of the sunsets and sandy beaches, but ultimately decided to wait another year before planning your vacation. A few days go by and suddenly it seems like you are seeing ads for Cancun vacations on many of the websites you visit. Is it a mere coincidence? Not really. The reason you are now seeing these ads on vacationing in Cancun is that your web browser stored a third-party cookie and is using this information to send you targeted advertisements.

You’re unintentionally creating a “trail of crumbs.” Most web users don’t realize that a browser window with multiple tabs open constitutes a single “session.” As you move from tab to tab, you are unwittingly relaying information about your web visit history to other websites and parties. And, closing the web browser doesn’t always eliminate the cookies your computer stores following the session. Depending on the browser you use, you may have to activate this manually.

How to clear your cookies after each session?

If you want to dump your cookies at the end of each session, select one of the following in your browser’s preferences:

  • Chrome: ‘Keep local data only until you quit your browser
  • Firefox: ‘Clear history when Firefox closes’
  • Internet Explorer: Delete browsing history on exit

If you do not select one of these preferences your browser will preserve cookie data from session to session. In other words, those ads tempting you into a vacation in Cancun will not disappear so quickly.

Are Third-Party cookies actually useful?

Since the late 1990s, online marketers have built their businesses on the ability to track online users and then target them with advertisements, and much of this has been through the use of third-party cookies. But could third-party cookies actually be useful for users? In a way, yes. The two largest online advertising firms, Google Ads and AdSense, make a valid point that 3rd party cookies are useful to consumers as they create advertisements that are in line with individual interests.

The end of Third-Party Cookies

With the passage of CCPA, ePR, and GDPR, governments are seeking to protect the privacy rights of website users. These laws and regulations create civil and/or criminal penalties for those that fail to notify web users of the presence of cookies.

Third-party cookies’ days are numbered. Pressure from regulators and consumers has led many within the tech industry to declare third-party cookies (and the targeted ads fueled by them) will soon come to an end. Apple’s Safari and Mozilla’s Firefox now block 3rd party cookies by default. One notable holdout is Google Chrome, which has a commanding 67% of browser market share.

Google has a major stake in third-party cookies. Nearly 90% of Google’s revenue is generated through advertising. This is one of the suspected reasons that the company is delaying a default block on third-party cookies until 2022.

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Summary: Why are cookies going away?

Cookies power all the ways we track, target, and measure performance in digital advertising. Cookies track users silently. As an industry, we didn’t do a great job of educating users on how and why we use cookies. And we didn’t give people a way to opt-out.

In response to the perceived lack of transparency and control for individuals, data breaches, and “creepiness” in advertising, privacy legislation from the EU and California now give users control over their data. Effectively, these policies give users the ability to block various tracking technologies or request the deletion of their data.

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