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What Are Cookies?

What are they? What info do they gather and how?

Cookies are character strings that a website sends to your browser when you visit it. The cookie then serves as an ID for your browser when you return. For example, when a site “remembers” the items left in your cart, it does so by reading your cookie, looking at the last known state of the cart tied to that cookie, and then providing you with a seamless experience to see the abandoned items. They tell the website basic information about your visit, like which pages you viewed and if you added an item to a cart. 

Websites will use cookies for multiple purposes, including:

  • Tracking site performance and optimizing accordingly 

  • Personalizing your return visit to the site with tailored suggestions 

  • Creating retargeting campaigns on platforms like Facebook Ads or through email marketing based on your website activity 

A weather channel website, for example, might remember the zip code you entered when viewing a weather forecast. The site will then automatically show you that zip code’s forecast when you return. 

Cookies — generally first party cookies — can be used to help gather user information in a web analytics/conversion tracking context like:

  • General location

  • IP address

  • Device used 

  • Site pages viewed

  • Site actions taken, like purchases made

Cookies: then and now

Cookies have been in use for decades (since 1994, to be exact), helping brands track everything from site visitor activity to which users arrived on their site after clicking on a digital ad. 

But in recent years, increased privacy measures have started to impact how cookies are used and what they can track. Web browser and operating system developers have restricted the usage of certain types of cookies, and in some cases, blocked them entirely. As a result, advertisers, advertising technology vendors, and publishers are turning to alternative solutions to track and manage cross-site engagement/activation, customer data tracking, and attribution. 

The call for increased consumer privacy is only expected to grow, which means it’s important for the advertising ecosystem to start implementing these alternate tracking and attribution strategies as soon as possible. 

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First-party cookies vs. third-party cookies

First-party cookies (1PCs) and third-party cookies (3PCs) work in different ways to collect information about internet users.

1PCs are generated and stored locally on a user’s browser by the website operator and can only be accessed by the writing domain. When a customer visits your website, these cookies enable activities like the storage of user preferences and login information, as well as web analytics tracking of pages the user viewed on your site. 

Good news: 1PCs are not going away anytime soon, though businesses do have to follow privacy regulations when using them.

On the other hand, we have 3PCs. These types of cookies are generated by third parties other than the website operator (e.g., an advertising technology vendor) and also stored on a user’s web browser.

Here’s an example of how 3PCs work in action:

  1. A user visits an online clothing store and views a red sweater.

  2. The clothing store’s advertising technology vendor stores a 3PC on the user’s web browser. The advertising technology vendor also stores the 3PC for later use and activation.

  3. The next day, the user visits a news website with ad space available to sell through the advertising ecosystem — we call this a publisher. 

  4. The advertising technology vendor accesses the 3PC from the user’s browser while the user is on the news site and then shares the availability of the ad space through an auction with the 3PC.

  5. Finally, the news site displays the winning ad from the auction on the news site featuring the sweater from the day before. 

Because 3PCs can be used to track people across the internet without consent, 3PCs have come under scrutiny for invading consumer privacy. This has led to an industry-wide phase out of 3PCs, with Google Chrome as the latest participant.