What are Third-Party Cookies?

Third-party cookies are small pieces of data stored on a user’s browser by websites other than the one they are currently visiting.

Unlike first-party cookies, which are set by the website the user is visiting, third-party cookies are typically set by third-party domains, such as advertisers or analytics providers, that are embedded on the main website.

These cookies are used to track users across multiple websites and gather information about their online behavior, preferences, and interests.

Third-party cookies play a significant role in digital marketing, as they allow advertisers to build detailed user profiles and deliver targeted ads based on a user’s browsing history.

However, growing concerns about privacy and data security have led to increased scrutiny of third-party cookies, with many browsers now taking steps to block or restrict their use.

Importance of Third-Party Cookies

• Behavioral Targeting: Third-party cookies allow advertisers to track user behavior across multiple websites, enabling them to create detailed user profiles and deliver personalized ads. This practice, known as behavioral targeting, helps advertisers reach their ideal audience more effectively.
• Ad Retargeting: Retargeting ads use third-party cookies to follow users after they have visited a website but did not make a purchase. These ads remind users of products they showed interest in, increasing the chances of conversion.
• Analytics and Attribution: Third-party cookies help analytics providers track users across multiple websites, providing insights into how users move through the customer journey. This information helps marketers understand which channels and touchpoints contribute to conversions and optimize their marketing strategies.
• Cross-Site Personalization: Third-party cookies enable websites to provide a personalized experience based on a user’s previous interactions across different websites. This includes showing relevant content, recommendations, and targeted offers.

Privacy Concerns and Changes to Third-Party Cookies

• Privacy Issues: Third-party cookies have been a source of privacy concerns for many years. Since they allow advertisers to track users without their explicit consent, they can be seen as intrusive. Users are often unaware of how their data is being collected and used, which has led to growing concerns about data privacy.
• Browser Restrictions: Due to privacy concerns, major web browsers have implemented changes to restrict or block third-party cookies. For example, Apple’s Safari browser and Mozilla’s Firefox browser have blocked third-party cookies by default, while Google Chrome plans to phase out support for third-party cookies by 2024.
• Regulatory Changes: Data privacy regulations, such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) in the United States, have placed stricter requirements on how user data is collected and used. These regulations have increased the pressure on companies to reduce their reliance on third-party cookies and adopt more transparent data collection practices.

Alternatives to Third-Party Cookies

With the decline of third-party cookies, marketers are exploring alternative solutions for tracking and targeting users:

• First-Party Cookies: First-party cookies are set by the website a user is visiting and are used to store information such as login details, user preferences, and shopping cart contents. Marketers are increasingly relying on first-party data to understand user behavior and deliver personalized experiences.
• Contextual Advertising: Contextual advertising targets users based on the content of the webpage they are viewing rather than their browsing history. This method respects user privacy while still allowing advertisers to deliver relevant ads.
• Privacy Sandbox: Google’s Privacy Sandbox initiative aims to develop privacy-preserving alternatives to third-party cookies. It includes proposals such as FLoC (Federated Learning of Cohorts), which groups users with similar interests for ad targeting without revealing individual user data.
• Identity Solutions: Identity solutions use encrypted identifiers to track users across websites with their consent. These solutions aim to provide a privacy-compliant way for advertisers to target users without relying on third-party cookies.
• First-Party Data and Customer Relationships: Brands are placing greater emphasis on building direct relationships with customers and collecting first-party data through loyalty programs, newsletters, and user interactions. This data can be used to personalize marketing while respecting user privacy.

Impact on Marketers

• Reduced Tracking Capabilities: The decline of third-party cookies limits marketers’ ability to track users across websites, making it more challenging to build comprehensive user profiles and deliver targeted ads.
• Changes in Attribution Models: Without third-party cookies, it becomes more difficult to track users through the entire customer journey. Marketers need to adapt their attribution models to account for the loss of cross-site tracking.
• Focus on First-Party Data: Marketers need to focus on collecting and leveraging first-party data to understand their audience and deliver personalized experiences. Building trust with users and encouraging them to share their data willingly will be key to successful marketing in a post-cookie world.
• Exploring New Technologies: Marketers will need to explore and adopt new technologies and methods for tracking and targeting users, such as contextual advertising and identity solutions. Testing and experimenting with these alternatives will be crucial for adapting to the changing digital landscape.

Third-Party Cookies and Samhub

Samhub helps businesses adapt to the changing landscape of digital advertising by providing data-driven insights and tools for effective targeting and personalization without relying on third-party cookies. With Samhub, businesses can:

• Leverage First-Party Data: Samhub helps businesses collect and analyze first-party data, allowing them to understand customer preferences and behaviors without the need for third-party cookies.
• Audience Segmentation with Mosaic Lifestyles: Using Mosaic Lifestyles, Samhub segments audiences based on geographic, demographic, and lifestyle data. This helps businesses create targeted marketing campaigns that resonate with specific customer segments.
• Monitor Campaign Performance: Samhub offers analytics tools that help businesses track the performance of their marketing campaigns, ensuring they can optimize targeting and engagement even in a world without third-party cookies.

Final Thoughts

Third-party cookies have long been a key tool for tracking users and delivering targeted ads, but privacy concerns and regulatory changes are driving their decline.

As the digital advertising landscape shifts, marketers need to adapt by focusing on first-party data, exploring privacy-preserving alternatives, and building stronger relationships with customers.

Tools like Samhub provide valuable insights and capabilities that help businesses navigate these changes and continue to deliver effective, personalized marketing.