What are third-party cookies?

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 >>

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