5 Basic Cookie Questions Answered

1. What exactly is a Cookie? Tracking or browser cookies offer true convenience to the online experience. Cookies provide a way to capture a consumer’s behaviors and preferences to provide a better or more relevant experience the next time they interact with the brand. They are tiny encrypted text files used by websites to detect and tailor experiences for visitors. For instance, if you visit an online retailer and place an item in your shopping cart, then abandon that purchase only to return to the site later, cookies can be used to identify you and remember the contents of your shopping cart. Or if you have a site you visit often and have registered for specific content or access, cookies help remember your login information so you don’t have to go through tedious steps each time you visit. There are primarily two types of cookies used by online marketers – 1st party and 3rd party.

2. What’s the difference between 1st and 3rd party cookies? The difference between the two depends on who sets the cookie. 1st party cookies are placed on your computer (or device) by the websites themselves or the host domain. In other words, if you were to visit abc.com, a cookie would be placed by abc.com that would identify you as a visitor. Consider it tool for a direct relationship between you (or your device) and the sites you visit. However, 3rd party cookies are placed by the site visited on behalf of another domain or brand. It’s the 3rd party cookies that tend to get the negative attention.

3. Can you give an example of each? With 1st party cookies, your next visit to a favorite site can be more relevant. If you were on music site and searched for acoustic guitars, on your next visit instead of being shown images of drums and amplifiers, you’ll be served up valuable content about guitars instead. Those 1st party cookies help to enhance the brand-consumer experience. On the other hand, 3rd party cookies tend to be a looser connection. For instance, if you visit abc.com and see an ad for blue shoes and later visit a different site and see the same ad for blue shoes, that’s an example of 3rd party cookies at work. Or you visit a weight-loss site, then later are targeted with weight-loss products not directly associated with the primary site you visited, this is also 3rd party cookies in action. But 3rd party isn’t all bad; at the same time, they also can limit the number of times that ad is shown and in what sequence you see specific content, so these can also somewhat benefit the online experience, but not as directly as a 1st party approach.

4. What about Privacy? Over the last year or so, 3rd-party cookies have drawn the ire of consumers who fear what kind of personal information 3rd party advertisers are collecting about them in order to track them online. As a result, more and more consumers are blocking/deleting third party cookies, making it difficult for marketers to have a complete view of each customer. 1st party cookies, however, are based on a direct versus assumed relationship so they don’t come with all the privacy baggage that have many consumers on edge these days. Not only that, but because you’re not depending on 3rd party ad networks, you’re able to use advanced audience targeting across a wide variety of devices, including mobile.

5. What’s the future of Cookies? You’ve likely seen the litany of articles and chatter about the impending death of 3rd-party cookies. It makes for a good headline. But until there’s a good solution to replace them, their death may not be so imminent. They’re not necessarily going away any time soon. However, we do see marketers with an increasing appreciation for operating primarily in the 1st party, which solves for a lot of challenges that soon will be facing marketers. More on this in a coming post.

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