Within two years, Google wants to sustain ad-supported web without third-party cookies.
Read on to learn how the elimination of third-party cookies will affect publishers and advertisers, as well as the difference between first-party and third-party cookies.
Before we dig more into details, let’s return to the basics of cookies.
Recap: What Are Cookies and What Are They Used For?
Cookies or web cookies are small text files stored on our computer browsers. The primary purpose of cookies is to identify a browser and its configurations on a particular website, such as location, login details, comment options, etc. These text files allow the website itself or the website’s browser to collect user data and improve user browsing experience.
Cookies function quite straightforwardly:
- The website or 3rd party server collects information about the user from previous webpage visits.
- The information is then sent to the web server (domain).
- According to all of the data collected, the web server suggests personalized web pages for the user.
In simple terms, cookies track the user’s activity within the website.
What are first-party cookies?
First-party cookies are exclusive user data, which are accessible only by the website’s owner. The website (domain) that you visit stores the cookies directly.
Let us give you an example:
Imagine searching for the website (domain) adexchanger.com via a search engine (e.g., Google). After landing on it, this website creates a first-party cookie, which is then served on your computer browser. Moving forward, these cookies are only available for the exact same domain (adexchanger.com) that you’d searched for.
What are third-party cookies?
Third-party cookies are served on your computer by other domains and not the ones that you visit. These cookies can track your activity within the web, such as pages you have browsed. Third-party cookies are mostly used by advertising companies and social networks, like Facebook.
Imagine searching for website (domain) adexchanger.com via a search engine (e.g., Google). After landing on it, you see that one of the articles includes a YouTube video. If you click on the video, adexchanger.com will not set cookies on your computer— YouTube will. It is because the domain isn’t the same. While the video is loading, YouTube tracks your web behavior and puts your data into cookies.
What are the differences between first-party and third-party cookies?
Just like your favorite cookies, all online advertisements are not made the same. It’s all in the recipe.
How is this change going to affect publishers?
Web browsers like Safari and Firefox have already eliminated third-party cookies. Publishers were the first to feel the consequences—on average, they lost more than 50% of their programmatic ad revenue.
What are the benefits?
Publishers will benefit from these changes in the long run because they will be pushed to boost data-driven revenues.
By having first-party cookies, publishers collect sensitive data of specific audiences. As a result, publishers will be able to forge partnerships with advertisers who are willing to pay money for the data.
Another benefit is that publishers will be able to deliver content that better speaks to their audience. If publishers develop the habit of analyzing and understanding their user behavior from first-party data, they can create data-driven content that better caters to their target audiences. Furthermore, data subsequently collected will provide clear behavioral insights.
How will advertisers benefit from this shift?
The first-party strategy for advertisers should be based on their understanding of the needs of their users and the drivers behind their behavior. This will earn advertisers a customer for life, not simply another click and scroll.
In short, behavioral targeting is the answer to future success for advertisers.
The main goal of these changes is to create strong brands by targeting powerful audiences. To achieve this, both publishers and advertisers have to shift their focus to user experience. Our experts note that publishers might see a small drop in ad revenue, especially from remarketing campaigns. However, the long-term results will be even better than before because of the growing importance of first-party data.
According to WebKit, publishers, advertisers, yield managers, and web browsers have to create a healthy web ecosystem by taking care of user privacy. The aim is to develop a first-party strategy with a focus on people-based marketing. First-party data is the future of user identity safety. Users will have more control over their data, and a higher degree of transparency over it is being used.