Q: What are third-party cookies?
A: Third-party cookies are code tags website owners load from separate servers to collect user behavior data. These third-party cookies help companies expand their reach and create targeted, highly personalized experiences. Many marketers use third-party cookies to run their campaigns and gauge their performance and analytics.
How third-party cookies are collected
Aggregators collect data and sell it through demand-side platforms or advertising data management platforms (DMP). Companies add code to their websites to enable third-party cookie tracking, and then use the aggregated data to reach broader audiences in their advertising initiatives.
How third-party cookies are used
For companies that rely on traditional customer data strategies, third-party cookies enable several critical marketing functions, including:
- Personalization: Marketers use third-party behavioral and browsing data to serve users personalized experiences.
- Campaign management: Third-party cookies help marketing teams manage the frequency and consistency at which users see their ad creative.
- Retargeting: Using third-party cookies, marketers can retarget visitors with similar content based on search and recent browsing activity.
- Measurement & attribution: Many measurement and attribution models rely on third-party cookies for reliability and accuracy.
In addition to marketing departments, third-party cookie use may impact IT, data, security, compliance, sales, and finance departments as well.
Challenges to using third-party cookies
Many of the challenges to third-party cookie use stem from an increasing awareness among consumers of how and why their information is shared online. One by one, major search engines stopped allowing third-party cookies to protect consumer privacy. In 2023, Google plans to follow suit.
In addition to the privacy and security concerns inherent in using data from third-party cookies, the information also comes with value limitations, such as:
- Indirect access to the consumer
- Opaque nature of aggregated data
- Low to moderate quality and completeness
- Low trustworthiness
These concerns limit the effectiveness of many traditional customer data strategies.
What the loss of third-party cookies might mean for you
With Google’s planned sunset of third-party cookies, companies stand to face considerable losses if they don’t shift their strategies. Potential impacts include:
- Revenue losses
- Reduced efficiency
- Increased marketing costs
- Lost customer and performance data
- Liability risk
Understanding third-party cookies and how you use them can help you design a new customer data strategy that makes sense for your business.
Wondering what third-party cookies are and what their loss will mean for your company?
Learn more about third-party cookie deprecation, and how to prepare >>
