How do third-party cookies work?

Q: How do third-party cookies work?

A: Third-party cookies work as tracking tools to follow user behavior online. Website owners load these code tags from separate domains because the data from third-party cookies allows for personalization and retargeting. The tags are called third-party cookies because they are created and stored on a third-party server.

Understanding how third-party cookies work can help you determine what’s at stake for your organization once cookie deprecation is complete.

Why companies track user behavior online

Marketers use third-party cookies to reach new customers, figure out if the right people are finding their content, and determine how to best structure their efforts to deliver a customized user experience. This may include personalizing data and retargeting ads to people who may be interested in a particular product, service, or type of information.

How third-party cookies work

Third-party cookies are tracking tools that collect aggregate data, versus individual information. Companies load code tags from separate domains to add third-party cookies to their websites and then purchase aggregate third-party data to inform their marketing tactics.

What marketers do with third-party cookies

Marketers use third-party data to give them an aggregate view of customer behavior. This allows them to use tactics like personalized content and retargeted ads so that they can reach a wider pool of potential customers.

Unlike first-party data, which comes directly from customers with consent for the company to collect and use it, third-party data is opaque, and thus not usually deemed high-quality or high-trust. That said, because of the volume of data available, third-party data can be very helpful for certain types of advertising.

When to start shifting your strategy

Because Google doesn’t plan to fully phase out third-party cookies until 2023, you may not be sure when to start shifting to a new marketing strategy. However, first-party data sourcing takes time, and if you need to change or add to your martech stack, your timeline lengthens. Gaining organizational buy-in also might add months to your process.

Now is the best time to begin. You’ll need to assess your risk before you can build a realistic first-party data strategy. If you’re not sure where to start, we can help.

Wondering how third-party cookies work? Starting to suspect you need a game plan for cookie deprecation? Learn more about how the loss of third-party cookies will impact you, and how to prepare >>

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