Online Tracking explained

How do businesses track online activties?

Purposes, methods, different entities are explained well in this FTC article. What are Flash cookies? What is device fingerprinting? How does tracking in mobile apps work?  Who places cookies on the web? along with first-party, third party cookies are detailed in the article. While third party cookies are going away, but here's an excellent article on third paty cookies, past, present, and future.

Speaking of first party and third party data, here is a good example provided on Stirista blog. In their mini-case study, here's how they used Twitter users' data to enhance reach and conversions for L'Oreal:

L’Oreal is a well-known global brand that, through its namesake brand, as well as its subsidiaries (which include Lancôme, Maybelline and Garnier among others), manufactures and distributes skin care, fragrances, hair care and cosmetic products.Targeting your competitors’ followers, a.k.a. Competitive conquesting, simply makes sense. They’re already interested in the products (or services) offered by your competitor that you also sell. Social platforms, such as Twitter are ripe with such prospects. The average Twitter user follows at least five or more companies/brands, with more than one-third purchasing from a company they follow.For Stirista, the three competitive conquesting segments for L’Oreal were broken down as Drugstore, Indie and Luxe. Working with L’Oreal’s VP of data acquisitions, Stirista first compiled data from the social followers of L’Oreal’s competitors to refine and better target their messaging to the appropriate product line among the various categories and segments.From there, Stirista identified L’Oreal’s audience prospects who followed their competitors’ social media handles. To create conquesting segments within each category, Stirista matched the prospects’ Twitter handles with name and postal information to better enable data-driven, targeted creative.The result: Within a few months of launching the campaign, L’Oreal saw a 12-percent or more increase in usage across each segment, month over month, as well as a lower cost per click.