What are cookies?
Cookies often referred to as Internet cookies, browser cookies, or HTML cookies, are small text files to identify individual users browsing the web. They are intrinsic to the websites accessed and are saved on the user's computer via web browsers. Cookies, in essence, allow each site to recognize a user as the same user who has previously visited the site.
In essence, when you visit a website, a cookie is placed on your computer or device. This cookie keeps you linked in and records your activity). When you return, the site recognizes you as the same user.
Cookies can have different purposes as well, although for the most part, they are used to accomplish one of the two objectives listed below:
- Managing a single browsing session – these are the cookies mentioned briefly above. They keep browsing activity within the same session, guaranteeing a pleasant user experience and efficient e-commerce transactions.
- Managing multiple separate sessions – these are the cookies that can be used to identify a single user over several sessions. They are used to keep users signed in or to save browsing preferences and history.
What are the different types of cookies?
Aside from the most common distinction between third-party and first-party cookies, browser cookies can be classified based on their duration of activity.
Session cookies – also known as transient or temporary cookies, are only valid for one web session. A session cookie is not saved on the user's hard disk and is erased once the user has finished viewing the site. This is the cookie with a unique session identifier that enables it to recognize a single user as they navigate the site.
Persistent cookies – also known as permanent cookies, will last over several sessions. Tracking cookies and authentication cookies are among the most common; nevertheless, their breadth of functionality also includes remembering any changes made to a website, such as language, theme, preferences, preferred shipping addresses, payment methods, and so on.
First-party vs. Third-party cookies
The most important distinction in browser cookies is who owns the cookie. There are no additional technical distinctions, which means that both cookies have the same properties but differ in origin and usage.
First-party cookies are owned by the website's owner. It is established by the host domain and is mainly used to manage a single browsing session. It remembers what visitors do, what sections of the website they visit, and what modifications they make to the site (e.g., adding items to the shopping cart). Aside from providing a smooth web surfing experience, first-party cookies collect analytical data that can only be accessed by the website's owner.
Third-party cookies are set by someone other than the website's owner, such as a social media or ad platform. A third-party cookie's primary function is to track user behavior throughout the web. These cookies are occasionally used to deliver third-party services (such as live chat), but the majority of the time, they are utilized for online advertising purposes.
How are third-party cookies used in advertising?
Third-party cookies are an essential component of the online pages that millions of people view every day. The browser saves them on the user's computer, allowing third parties to compile a detailed profile of each individual user on their web server. And suppose an advertiser knows a single person's location, reading habits, hobbies, and recent purchases. In that case, they may target and retarget advertising across several sites and companies to offer ads for items that individual is genuinely interested in.
Depending on the type of business, a third-party cookie will find its way into a website either through an advertising platform or by a script installed on the website. The most common would be the Facebook Tracking Pixel.
Previously online sites didn’t have restrictions on the number of cookies that might be stored. Apple, Mozilla, and yes, even Google has introduced rules limiting these. Prior to these changes, other websites were able to access a user's browsing history, preferences, areas of interest over many visits, user's shopping cart, and other data for the purpose of ad targeting.
Are cookies good or bad?
The answer to this question isn't really straightforward. Cookies have a purpose: they remember what a visitor is doing and where they are doing it so that they can provide a more seamless online browsing experience. Cookies allow us to stay signed in, keep track of our likes, and get ads for items we've looked at. Cookies might show users advertising for goods they would have bought otherwise but at a lower price. They can be beneficial, but they come at the expense of privacy.
I will explain why third-party cookies are gradually being phased out in the next part. However, before we assess cookies as beneficial or evil, we must first understand what they are capable of and where the privacy issues stem from.
What cookies can:
…and cannot do:
The early history of cookies
To understand present sentiments about cookies, we must first look at their history. Lou Montulli, a web browser programmer at Netscape Communications, invented cookies in 1994. The concept behind cookies was straightforward: they would allow customers purchasing on an e-commerce site to save their goods in a virtual shopping cart. According to The New York Times, this was the first time in Internet history that data from a website could be reliably saved on a user's computer.
By 1995 cookies had become an integral part of the web browsing experience, working entirely behind the scenes.
By 1996, more tech-savvy users raised their concerns, which led to the Financial Times published an article entitled, "This bug in your PC is a smart cookie." The bottom line was it wasn't so much what the cookies were as what they could be used for that worried people. And thus, the issue of consumer online privacy was born.
The first guideline to block third-party cookies
The discovery that cookies may be shared and transferred between their original websites and across an entire network of sites made cookies, specifically third-party cookies, a hot button issue. Within a year, existing advertising businesses began tracking users and following them around with ad campaigns using third-party cookies.
In February 1996, the working group identified third-party cookies as a considerable privacy threat. The specification produced by the group was eventually published as RFC 2109 in February 1997. It specifies that third-party cookies were either not allowed at all or not enabled by default.
The bottom line is that the original specification sounded oddly like how the GDPR is defined.
Why are third-party browser cookies disappearing?
The web community has long been wary of web servers collecting user data. After all, cookies contain technical information about users and information about their preferences and activities. This may include sensitive data and personal data.
Unwanted cookies might track users throughout the web. Confirmation pop-ups were meant to mislead users into accepting browser cookies against GDPR rules. While cookies might be deleted, others would remain on the visitor's machine, promoting unscrupulous advertising tactics. This sparked a new privacy trend.
Apple began reducing the strength of browser cookies in 2015 to increase user control. Mozilla followed suit in 2019 along with Google.
By the end of 2021, third-party cookies will be obsolete. Third-party data will no longer be collected and shared between ad tech companies and the rest of the advertising industry. According to a recent Apple update, just 25% of users consent to be monitored every time an app is launched.
These changes have restored cookies to their beginnings. They're utilized to make browsing more accessible and more pleasant without compromising user privacy.
What’s the future of advertising?
Third-party cookies have no place in the future of advertising. After the peak of third-party cookie-based ad formats in the 2010s, there has been an increasing trend toward more privacy-oriented alternatives. As a result, traditional techniques of targeting and retargeting are no longer effective. However, there is greater room for alternative advertising solutions, whether they are based on first-party data, contextual targeting, or yet-to-be-discovered technologies.
The changes will most impact Google, Facebook, and other digital juggernauts will continue to look for alternate ways to keep their ad businesses afloat. Meanwhile, the final remnants of third-party advertising are fading, and businesses are shifting to cookieless ad formats.
NewProgrammatic has an excellent post if you want to learn more about the condition of the advertising industry in the face of third-party cookie phaseouts to learn more about the most current changes.
The ad tech industry is working hard to replace browser cookies with more effective advertising alternatives. For the past few years, it has been apparent that third-party browser cookies (tracking cookies) are no longer acceptable.
If you want to learn more about internet advertising and online marketing or wonder if it is right for you and your small business, reach out to us for a free consultation.