Cookies identify online users and have become a mainstay of digital advertising. As web servers have no memory of their own, cookies are used to make websites remember the user’s action, so they aren’t asked to perform a task again and again. As a result, they help provide a better, more personalized user experience.
And while most marketers know this broad definition, getting into the weeds regarding the different types of cookies and how they differ from one another can be trickier. However, with the current trend of third-party cookie deprecation, it’s never been more important for marketers to gain a more nuanced understanding.
In the name of building a “more private web,” Google recently announced that it plans to eliminate third-party cookies from its Chrome browser by 2024.* This announcement follows other cookie deprecation shifts by other major browsers from as far back as 2017—all of which mean a big shift for advertisers reliant on third-party cookies.
So, what are third-party cookies? And how are they different from the other types of cookies, namely first-party cookies? Read on to find out.
Types of cookies
Let’s run through definitions of first- and third-party cookies before taking a look at how they differ from one another.
What are first-party cookies? First-party cookies are created and stored by the website you are visiting directly. They are used to collect user data for analytics, remember language settings, and store login information.
What is a third-party cookie? As the name implies, third-party cookies are created and placed by third parties other than the website you are visiting directly. Some common uses include:
- Cross-site tracking: the practice of collecting browsing data from numerous sources (websites) that details your activity
- Retargeting: using search activity to retarget visitors with visual or text ads based on the products and services for which they’ve shown interest
- Ad-serving: making decisions regarding the ads that appear on a website, deciding when to serve these ads, and collecting data (and reporting said data including impressions and clicks) in an effort to educate advertisers on consumer insights and ad performance.
Key differences between 3rd-party cookies and 1st-party cookies
From the technical perspective, first- and third-party cookies are the same kind of files. The only difference lies in how they are created and used by websites.
First-party cookies are generated by the host domain. They are usually considered good because they help provide a better user experience. These cookies enable the browser to remember important user info, such as what items you add to shopping carts, your username and passwords, and language preferences.
On the other hand, third-party cookies are mostly used for tracking and online advertising purposes.
Here’s a table summarizing the key differences between first- and third-party cookies:
First-Party vs. Third-Party Cookies
The third-party cookie phase-out
Here’s how the third-party cookie phase-out is expected to affect marketers:
Third-party cookies are crumbling: Now what?
Our research on this industry shift shows that despite the impact and significance, fewer than half of marketers (46%) feel "very prepared." But at the moment, the best thing a marketer can do is not panic and continue to stay informed with news related to third-party cookies that could influence your business.
If your marketing strategies rely on third-party cookies, it’s time to start exploring alternatives. Look to partners who can provide a stable and scalable ID graph with limited reliance on third-party cookies. Explore tools that can better help you leverage first-party and transactional data. And if you have limited or no first-party data, seek out vendors and partners that do have access to consented first-party data to identify and reach customers across the web. Because publishers have a direct relationship to the visitors to their sites and apps, it’s important to work with them—or vendors who do—to continue personalizing messages with the help of their first-party data.
Still not sure how to pivot your advertising strategies during the third-party cookies phase-out?
Let us help
Because Epsilon’s identity graph is anchored in deterministic purchase data from individuals, it has limited dependence on third-party cookies. The integrity of this purchase data allows us to have 96% accuracy and industry-leading match and reach rates. As a result, we are able to identify and serve 98% of our ads to individuals, not orphaned cookies or device IDs.
Epsilon’s direct relationships with over 5000 publishers also help us defend against third-party cookie deprecation, because through these relationships we are still able to:
- Identify consumers from publisher audiences. Publishers generate IDs based on their first-party data, which is then synced with Epsilon’s CORE ID.
- Connect clients’ advertising goals with publishers’ ad inventory. Our first-party solution in partnership with our publishers helps us better understand the behaviors of users as they interact with publisher sites.
- Deliver personalized, relevant ads. Connecting our ID with publishers’ IDs improves identification of publisher audiences and match rates.
- Reach real individuals. Connecting with the publishers’ authenticated user data (logins, registrations) ensures we are serving ads and optimizing based on individuals, not cookies or device IDs, which may overlap.
Our years of preparation building people-based identity with first-party strategies and relationships will enable us to continue delivering results for our advertisers, while still providing performance transparency.
Contact us now to learn more about our services.
*This article was updated in 2023 to update correct cookie deprecation date.