All You Need to Know About Data Cookies: The Death of Third Party Cookies

Here we will be explaining the different kinds of internet cookies (first-party, second-party, and third-party) and their different uses. Once we've laid out a brief overview of cookies and their uses, we will discuss the removal of third-party cookies, a highly-anticipated change for digital marketers. The more knowledge you have about cookies and third-party cookies, the better prepared you will be to enter the world of digital marketing.

First Things First: What ARE Internet Cookies?

First-Party Cookies

A first-party cookie is created and stored by the website that is directly visited. They allow the owner of the site to collect customer analytics, remember the language settings, and carry out other functions to provide a good user experience.

Second-Party Cookies

Second-party cookies are cookies that have been transferred from one company to another through a data partnership. This is useful for companies that want to exchange data where it would be mutually beneficial for both companies.

Third-Party Cookies

Third-party cookies are created and placed by a third-party website, rather than through the visited website directly. Third-party cookies collect data and customer profiles, such as interests, hobbies, preferences, and patterns of browning history.

Without cookies, the experience of using web pages wouldn’t be enjoyable because they wouldn’t be useful or interactive. Cookies are able to give websites information to continue to improve.

What is Happening to Third-Party Cookies in 2022?

Google's Decision

On January 15th, 2020, Google announced that they would be phasing out the use of third-party cookies on Chrome by 2022. We all knew this was coming, and the news coming early has allowed marketers to prepare and research what will come next.

Why are They Removing Third-Party Cookies?

Have you ever been online shopping for something, and then the next thing you know, you’re scrolling through your Facebook feed and see an ad for what you were just looking at? That’s the magic (and creepiness) of third-party cookie data. Consumer concerns have grown over the years over data collection and user privacy from third-party cookies, and new laws have already been implemented in European nations to regulate consumer data collection and privacy. With the expected increase in data collection regulation, Google made the decision to remove third-party cookies from their browser - this virtually puts all of the power in Google’s first-party data. Marketers are wary of this change, specifically because they don’t know how much user data Google will be collecting for their own use, giving Google an unfair advantage.

New Privacy Standards

The EU General Data Protection Regulation (GDPR) governs how personal data of individuals in the EU is processed and transferred. Currently, it states that cookies qualify as personal data, and companies have a right to process their users’ data as long as they have consent of if they have a legitimate interest. The ePrivacy Directive (EPD) is known as the “cookie law”. After the EPD was passed, more and more websites were required to include cookie consent pop-ups.

The GDPR and EPD require websites to:

receive user consent before using any cookies except strictly necessary cookies
provide accurate and specific information about the data each cookie tracks and its purpose in plain language before consent is received
document and store user consent received
allow users to access your service even if they refuse to allow the use of certain cookies
make it easy for users to withdraw consent as it was for them to give consent in the first place.

Google Privacy Sandbox...What is it?

Google’s proposed solution to the removal of third-party cookies is their new Privacy Sandbox. Marketers are hesitant to make the switch, as this will be putting power directly in Google’s hands and they are not sure how transparent Google will be about the operations of the Privacy Sandbox. Essentially, the Privacy Sandbox is a set of 5 API’s (application programming interfaces) that allow marketers to run targeted ads without having access to users’ personal data. The Privacy Sandbox relies on anonymized signals within a person’s Chrome browser to receive aggregated data about issues such as conversion and attribution from each API.

The good news about the Privacy Sandbox is that it is still in its infancy - Google wants to work with advertisers and Chrome users to hear their feedback and suggestions on how the Privacy Sandbox can most benefit all industry stakeholders. The goal is to eventually release the APIs into open web standards so other browsers such as Safari and Mozilla can adopt them as well.

Read more about the Privacy Sandbox here.

Other Alternatives to Third-Party Cookies

Device Fingerprinting

This is a technique marketers use to help follow potential customers on the Internet. They are normally used for personal accounts, such as Gmail, when you sign in from a new device. It will look at data such as location, time zone settings, apps, and operating system version.

Universal ID Solutions

Universal ID isn’t as restricted as third party cookies. While cookies work well when there are a limited number of companies using the information, but now, thousands of different companies use this data to buy and sell advertising. They sync the data to allow users across the web and this makes sure that the correct ads are targeted to the right consumers. Yet, this may slow down the user’s experience since there is such a large number of requests on webpages.

Read more about Device Fingerprinting and Universal ID Solutions here.

Contextual Advertising

Contextual Advertising is based on behavioral targeting such as keywords. This is when marketers target you with ads based on the content you view and search. They look at keywords and click-through rate to find the best possible ad for each consumer. This type of advertising focuses on producing and distributing relevant content.

Read more about Contextual Advertising here.

What does This Mean for Marketers Moving Forward?

The removal of 3rd party cookies will make it more difficult for marketers to advertise to consumers online. 3rd party cookies are placed on websites to collect information about the consumers' profiles and browsing history. Tracking this information shows marketers what sites were accessed and what products were clicked on. A consumer is more likely to click on an ad that is targeted towards them rather than random ads. Without the information from 3rd party cookies, digital marketers will no longer be able to track customers' history and show ads that are targeted towards the specific person.

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