The end of third party cookies

What that means and how to react - Away from the opaque collection and use of consumer data, towards a decision-oriented, transparent and privacy-friendly future.

The internet is at an inflection point.

Google has announced it will phase out third-party cookies in mid-2023, and Apple plans to follow. As these two browsers, Chrome and Safari, have a global market share of around 80 per cent, this has huge implications for the internet world. However, to understand the scope of this announcement, we first need to explain what cookies are and what types of cookies exist.

What are cookies?

A cookie is a small text file stored in a browser that is used to access the internet. Most people have hundreds of cookies stored there. The main purpose of a cookie is to identify users and possibly prepare customized Web pages or to save site login information. As a web server has no memory the hosted website a user is visiting transfers a cookie file of the browser on a computer’s hard disk so that the site can remember the user and his preferences. This message exchange allows the Web server to use this information to present the user with customized Web pages. 

Therefore, Cookies are immensely useful as they allow modern websites to work the way people have come to expect – with increasing levels of personalisation and rich interactive functionality. This use of cookies for targeting in particular is what the law was designed to highlight. By requiring websites to inform and obtain consent from visitors it aims to give web users more control over their online privacy.

Different types and uses of cookies and data.

One of the key attributes of a cookie is its 'Host' - this is the domain name of the site that ultimately sets the cookie. Only the host domain can retrieve and read the contents of the cookie once it has been set. If the host name is the same as the domain in the browser address bar when it is set or retrieved, then it is a First Party Cookie. In the context of advertising, first-party data is owned by the company itself.

If the host domain for a cookie is different to the one in the browser bar when it was downloaded, then it is a Third Party Cookie. Third-party data is transmitted by third-party providers, which either collect or purchase data. In order to collect data, third-party providers usually use cookies to tag and track users on various websites.

There is also second party data that implies sharing data or buying it from a “trusted partner.” In the context of large, multi-brand B2C corporations, second party data may just be a matter of sharing 1st party data from one brand with another. Second party data is externally collected own data or partner data. This means that the data originates primarily from strategic partnerships or campaign data that provide information about behaviour, environments, technical conditions or the number and duration of advertising consumption. The data is collected by an external source (ad server, DMP, etc.). The joint use of the external data by the partners is usually contractually defined (sharing model).

The AD market is changing. Zero- and first party-data is the future.

As the industry will lose access to most third-party data, the ability to target and measure is going to be compromised. There will be a huge focus on privacy and control of personal data. The burden is on companies not only to collect and use data responsibly but to make sure their efforts are visible to customers. Marketers often describe the advantage of first-party data over third-party data as the ability to target customers based on verified information.

Advertisers and publishers will now need to depend primarily on their own zero-/first-party data, or on data from walled gardens, contextual targeting, and greater support from data platforms. This dependency primarily on zero/first-party data requires forming an internal privacy strategy. 

With Unidy we enable businesses to collect, centralise and monetise first party user data by seamlessly connecting single service silos through one central user account and single-sign-on. If you also want to implement your zero/first-party data strategy with Unidy, feel free to contact us.

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Written by
Kilian Pöhling

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