Cookies and Advertising – Third-Party Cookies
In 1994, Lou Montilli, a web browser programmer at Netscape Communications, created cookies. The concept was a simple one; allow internet users that visit e-commerce sites to store their items in a virtual shopping cart. This advancement represented the first ever instance of website data being stored on a user’s computer.
It wasn’t long before concerns arose regarding the use of this data and how it could impact consumer privacy. This was before cookies were being used for advertising, yet savvy internet users were aware that these small text files could be used for more nefarious purposes.
The use of cookies quickly shifted, ultimately being utilized to identify specific users browsing the internet, and allowing sites to recognize users that have visited before. When visiting a website, it will drop a cookie on your computer that keeps you logged in and tracks your activities. This makes it possible to determine future visits to the website from the same individual.
There are two primary purposes for this use of cookies:
Single Browsing Sessions – Tracking activities on a site within the same session, providing a seamless experience and smooth e-commerce transactions
Multiple Browsing Sessions – Identifying specific users over multiple visits to a website, saving preferences and history in order to improve experience.
Types of Cookies
Cookies can be differentiated by understanding who the cookie belongs to. From this perspective, there are two types of cookies. Each possesses the same technical specifications and characteristics, however their origin and usage are different. Once understood, these differences bring clarity to Google’s decision to kill the cookie in the name of user privacy.
First Party Cookies
Belonging to the owner of the website, this cookie is created by the host domain and is used to manage a single browsing session. This cookie remembers what users do on the site, including where they visit and what changes they make. The function is to improve browsing experience while collecting information that is accessible to the website’s owner.
Third Party Cookies
This cookie belongs to owners outside of the website, such as a social media or AdTech platform. The purpose of third-party cookies is to track a user’s internet activity beyond a single website. These cookies are the ones being used for advertising, however they are also used to provide third-party services such as live chat.
Third-party cookies have become a critical element of websites being visited daily, allowing third parties to gather information on a user and create a detailed profile on their habits, interests and activities. When an ad company accesses this information, it becomes very easy to target users with ads across sites and platforms that are related to their interests.
Website owners can make money from advertisers by renting ad space or invisible pixels on a site, making third-party cookie collection easy. Prior to regulations from big tech giants like Google and Apple, users could be tracked by a multitude of third party cookies simultaneously. This made it possible for browsing history, consumer preferences, interests and other data to be known by a range of other websites and utilized for targeted advertising.
The End of Third-party Cookies
The collection of information related to the user’s personal preferences and habits has always been met with skepticism. Concerns related to the collection of cookies were quickly raised upon the birth of this technology, however their phasing out has been a multi-year effort. GDPR laws urged changes, but loopholes in the form of consent pop-ups were used to trick users into accepting cookies, continuing to fuel questionable advertising practices.
Apple has been a leader in the stand against cookies, starting in 2015 with the addition of third-party ad blockers that stopped ads with hidden cookies from being placed on user’s computers. Since 2015, Apple, Mozilla and Google have all taken steps to increase user privacy by limiting cookie-based advertising and prioritizing alternatives. This culminated in the 2020 announcement from Google to gradually phase out third-party cookies by early 2024.
Now, in 2022, third-party cookies are all but obsolete. First party cookies don’t seem to be going anywhere, but the collection of third-party cookies is coming to an end, as big tech giants and the advertising industry are forced to reckon with these changes. Interestingly enough, this has returned cookies to their initial purpose, improving the browsing experience without privacy infringements.
Conclusion
Biggest takeaway? With the near death of 3rd party cookies, advertisers and marketers are continuously searching for alternatives that can undo the gap left by the cookie-less world.
The future of advertising will be reshaped drastically, thus why businesses require a privacy-first solution that delivers contextual ads rather than intrusive ads.
Today, ReverseAds, being the future-thinking brand, has developed a technology that is the convergence of Artificial Intelligence and Machine learning and built cookie-less for businesses seeking privacy-forward technologies to boost the effectiveness of their digital advertising.
Interested in finding out how we can fit into your marketing goals, speak to our consultants today.
