Cookies track online user behavior, but different types collect and use data in different ways. As the industry begins to shift away from third-party cookies, the new focus is on first-party. So, what’s the difference between first-party vs. third-party cookies?

 

What Is a Cookie?

Simply put, a cookie is a piece of code that browsers temporarily store. They have been around for some time and are critical to the modern online experience. 

What Are First-Party Cookies?

First-party cookies describe data collection directly on the site you visit. Website owners use this information to analyze behaviors, support personalization of user experiences and remember language settings or location.

Here’s how it works:

A user signs in to an e-commerce website. When they do this, the website “cookies” their preferences. This means the website stores information exclusive to them (their name, address, billing details, order items, etc.).

When they visit the site again, that website recalls those details and can autofill or prefill items available or make suggestions based on previous interactions.

If a user blocks first-party cookies, they would have to sign in at every visit and re-enter all their information. They also wouldn’t receive recommendations, as the website isn’t tracking previous behavior.

What Are Third-Party Cookies?

Third-party cookie collection occurs by domains not on the website the user visits, and their primary purpose is for advertising. These cookies are part of a script or tag and are accessible on any type of website.

Here’s how it works:

Take the example above of online shopping. If you view multiple items but only purchase one, you may receive ads or emails featuring the products you didn’t buy. Even if users close the browser or end the session, tracking data remains in place.

Some of the services that leave third-party cookies in a user’s browser include:

  • Ad retargeting services: Those are the ads that seem to “follow” you around and work across different channels. 
  • Social media button plug-ins that allow users to share and like a post on a social media profile: If you interact with these, you’ll likely see ads related to the content once you revisit the social media sites.
  • Live chats: These will leave a cookie in your browser to streamline the user experience. Next time you encounter the pop-up, it will remember your name and previous conversation. 

First-Party vs. Third-Party Cookies: The Differences

Here are the main differences between the cookie types:

  • How the cookies are set up: With first-party cookies, the domain owner creates the script. Third-party servers (i.e., ad tech platforms) configure third-party cookies. 
  • Where the cookies display: First-party cookies are only on the owner’s domain. Third-party cookies can be part of any website. 
  • How browsers treat them: Users can block any kind of cookie. The problem with blocking first-party is that the user experience isn’t great. Blocking third-party cookies doesn’t impact the user experience, and many browsers are now doing so by default. 
  • Who owns the data: Domains own first-party cookie data. Data from third-party cookies can feed back into ad tech platforms or be sold to many other parties.

Cookie-Geddon: Third-Party Cookies Slowly Crumbling

Third-party cookies have been a key tool for digital advertising; they are instrumental in serving ads to the right audience. However, increasing concern over privacy and new regulations paved the way for “cookie-geddon.” While Safari and Firefox already banned them, Google is next, but they’ve decided to hold off until 2023

While that gives the industry some breathing room, the change is still coming. Google is working on new tools to ease the transition. Google’s Privacy Sandbox is technology that protects online privacy while also supporting developers and digital businesses. That’s a delicate balance, and one the tech juggernaut is still figuring out, hence the delay. After all, Google has its hands in all the cookie jars — browser, email, app store, search, ads, etc.

 

Cookie Perceptions

Although many aren’t cookie experts, most people understand the experiences they provide. Many appreciate recommendations from Netflix or Amazon, courtesy of first-party cookies. However, when ads for products seem to “stalk” people across the internet, they aren’t so forgiving. So, it’s possible that shifting to first-party cookies could help your advertisers target better and make customers less leery.

The Transition to First-Party Cookies Can Improve Targeting

targetWhile third-party cookies have been powering targeting for some time, they weren’t always effective. In some cases, these cookies served up ads not relevant to the viewer, which means there was ad waste and the possibility of negative brand feelings.

Moving from third-party to first-party cookies isn’t a straight path. Our third-party advertising platforms will be using the Unified ID 2.0, which is a user identity solution that will support your advertisers while also ensuring consumer privacy.

To ease the concerns of your advertisers, you can explain this new tactic to them while also:

  • Explaining that local advertising isn’t highly dependent on cookies. Rather, we use contextual, targeted advertising to hit the audiences they want based on location and demographics.
  • Advising that they diversify their ad mix with multiple digital formats like social media ads and SEM (search engine marketing), which aren’t cookie-dependent. Also, remind them that a successful integrated advertising program should include linear inventory.
  • Discussing precisely how all digital advertising channels target, including display, OTT/CTV and others.

Navigating the Next Frontier of Cookies

The cookie landscape is still in flux, but it’s an important topic that your sales team should be aware of and should be able to articulate to customers. 

Learn more about this digital advertising trend and many more by reading our e-book, Digital Marketing Demystified: 4 Trends Advertisers Can Take Control of Now.