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It is no secret that cookies are an essential pillar of online marketing. Cookie-based tracking is considered the most common method for marketers to collect precious customer data and deliver personalized, targeted advertisements to web users to create an enhanced user experience. However, data privacy is becoming ever-more important and to protect users' privacy, GDPR has decided to step in and regulate third-party cookies.
Not all cookies are equal. They all serve different purposes. Let's look at the differences between first-party vs third-party cookies.
First-party cookies have higher transparency for users. In most cases, they are created by a domain or website to store the user's website preferences while visiting a specific website. They often save information like usernames, language settings, payment information, and items added to the card which helps customize the content being exposed and recommended on the website. Third-party cookies have caused concerns due to a lack of transparency for users.
Third-party cookies are placed by a domain or website other than the one the user is visiting. They often are often used for marketing and analytics purposes, thus tracking users' online behaviour and collecting data as users navigate through the site and across websites (cross-site tracking), thus gathering information about users' preferences, interests and habits. The collected data is often traded and sold in the digital advertising industry.
Cookies are not completely disappearing from our lives. First-party cookies will continue to be leveraged by website owners. However, Google has announced that by the end of 2023, they will stop using third-party cookies in Chrome as it doesn’t comply with the GDPR rules. Hence third-party cookies are being phased out of online advertising.
Depreciating third-party cookies is a response to increased consumer awareness and privacy regulation. It strives to create a future, where transparency, control, and choice are in the hands of the user on the web to protect consumer privacy.
Without third-party cookies, marketers will need to evolve to focus on first-party data and zero-party data. Using zero-party data, the users voluntarily give their data to the website. The website asks for the user's information and preferences and collects them with user consent. It forces marketers to become even more innovative when collecting data and advertising.