First-Party Data Strategy | The End of Third-Party Cookies

Within two years, Google wants to sustain ad-supported web without third-party cookies.

Read on to learn how the third-party cookie elimination will affect publishers and advertisers. As well as the difference between first-party and third-party cookies.

Before we dig more into details, let us remind you basics of cookies.

What Are Cookies Again and What Are They Used For?

Cookies or web cookies are small text files, which are stored on our computer browsers. The primary purpose of cookies was to identify a browser and it's configuration on a particular website. For example, location, login, 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 work quite easy:

  1. The website’s or 3rd party server collects information about the user from the previously visited webpages.

  2. Then the information is sent to the web server (domain).

  3. According to all the data web server comes up with personalized web pages for the user.

Simply speaking, cookies allow to track the user’s activity within the website.

What are first-party cookies?

First-party cookies are exclusive user data, which are accessible only to the website’s owner. The website (domain) which you are visiting directly stores these cookies.

Let us give you an example:

Imagine you are searching for a 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. Later on, these cookies are only available for the same domain(adexchanger.com), which you were searching for.

What are third-party cookies?

Third-party cookies are served on your computer by other domains instead of the domain, which you are currently checking. These cookies can track your activity within the Web, like pages you had visited. Mostly, third-party cookies are used by advertising companies and social networks, like Facebook.

Example:

Imagine you are searching for website (domain) adexchanger.com via a search engine (e.g., Google). After landing on it, you see that one of the articles include YouTube video. So, if you click on the video, adexchanger.com will not set cookies on your computer, but 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?

All online advertisements are not made in the same way, just like your favorite cookies. It’s all in the recipe.

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How is this change going to affect publishers?

Web browsers like Safari and Firefox have already eliminated third-party cookies. Publishers were first to feel the consequences — they lost more than 50% of their programmatic ad revenues.

What are the benefits?

Publishers will benefit from these changes in the long run by boosting data-driven revenues.

By having first-party cookies, publishers collect sensitive user data of specific target audiences. As a result, publishers will be able to make partnerships with advertisers who will be willing to pay money for the data.

Another benefit is that publishers will be able to deliver content, which is right for their audience. If publishers start to create data-driven publishing by analyzing and understanding their user behavior from first-party data, the content will become clearer and more focused on the audience. Furthermore, it will provide clear behavioral insights.

How will advertisers benefit from this shift?

The first-party strategy for advertisers should be based on understanding the user needs and what drives their behavior. This will earn advertisers a customer for life, not the information of demographics or age.

Behavioral targeting will be the answer for advertisers to succeed.

Final Thoughts…

The main goal of these changes is to create strong brands by targeting powerful audiences. Both publishers and advertisers have to put the focus on user experience to make it better. Our experts note that publishers might see a small drop in ad revenues, especially from remarketing campaigns. However, the long-term results will be higher because of the growing importance of the 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 going to be the future to keep user identity safe. Users will have more control and transparency over their data.