To understand how you can make the most of first-party cookies, let’s dive into what they are, how they work, and how advertisers use them.
What are first-party cookies, and how are they different from third-party cookies? All cookies, whether first- or third-party, are stored in a user’s browser and designed to collect data about a user when they interact with a website.
First-party cookies are limited to a single site but perform an important function. They can be used to remember that a user has previously logged into a site, set correct language settings, or even keep a shopping cart filled across multiple sessions.
So far, so benign, which raises a question:
Why are people so worried about the privacy implications of cookies?
Well, unlike their site-bound counterpart, third-party cookies (also known as tracking cookies) can be used to track users across multiple websites. This allows companies to collect an enormous amount of data about a user’s browsing habits across the entire internet.
This is incredibly useful for advertisers, who can use this information to understand what products or services, and what aspect of those products and services, a user might be interested in. However, the sheer scale of data collection has led to significant privacy concerns, and will ultimately lead to the elimination of third-party cookies as a tool. That said, the more privacy-friendly first-party cookie is here to stay and remains a powerful tool for marketers.
How are first-party cookies used?
First-party cookies are remarkably flexible tools, limited only by the domain that they’re assigned to. Even before the cookieless future, first-party cookies have been actively integrated into many types of campaigns.
In general, the way first-party cookies work is the same regardless of campaign type. First-party cookies can be used to collect data about a user’s interaction with a website or app, which can help tailor content to that user. This could include product searches, a user’s shopping basket, or what content they’re choosing to interact with.
The advertiser or publisher can use first-party cookies to deliver personalised ads on a specific website with a given first-party cookie. This approach enables personalised ads that respect the privacy of the user.
How first-party cookies are used in retargeting campaigns
In a retargeting context, the advertiser is using data that either they or their client already own, called first-party data. For retargeting campaigns, this will typically be information about how a user is interacting with an ecommerce site, which enables the advertiser to understand what products that user is interested in, what their likely order value is going to be, and where they are in the purchasing process.
While first-party cookies cannot be directly used to personalise ads on other websites, they can help create privacy-preserving interest groups, for example, by using the FLEDGE mechanism, which can then be targeted across the internet.
Let’s say you know a user has already looked at several products in the Ultrabook products category, but not made a purchase, then you place them in the “considering Ultrabook products” interest group. You can then show all users in this group adverts demonstrating the benefits of multiple products, giving them the information they can use to make a final decision and convert to a purchase.
How first-party cookies are used in branding campaigns
In branding campaigns, advertisers typically leverage publisher data. This includes information about the content that users on a site are interacting with, how they interact with that content, and how often they interact with the site.
The publisher can then place these users into interest groups that marketers can display adverts to, without ever needing to know the user identity. This provides many of the benefits of third-party tracking cookies, without needing to track a user’s actions across multiple sites.
Where do first-party cookies fit in the cookieless future?
The methods already discussed will continue to function in the cookieless future, and will likely become an essential part of your advertising strategy. However, there will also be innovations in how we use first-party cookies, and one of the most interesting is the CHIPS API proposed by Google.
This will enable developers to create cookie partitions, which allow tools like Google Maps to be embedded in a publisher’s website and remember information about a user only on that website while enabling the proper functioning of this tool across the web.
For example, if you search for “Rome hotel” on the imaginary Awesome-Italy-Hotels.com, the website will remember your search and input it the next time you log on. If you want to compare prices on another website using the same maps service, it will not load the same cookie, as the tool will not be able to recognise you as the same user.
Why not use fingerprinting technology instead?
Now is a good moment to address the elephant in the room: while first-party cookies are powerful, there is a reason that marketers have relied so heavily on third-party cookies – they provide more precise targeting of individual users which enables heavily personalised ads.
So, why shouldn’t marketers just double down on other tracking technology that provides the same granular data as third-party cookies?
Well, some advertisers are turning to tools like fingerprinting technology, which tracks users by unique features such as their device, browser, or specific configuration. These methods can track users but are highly invasive, and if the advertising industry adopts them as standard, they will demonstrate to consumers that they don’t care about their concerns. Nearly 80% of Americans are concerned about data collection, and if the advertising industry doesn’t adapt to address these concerns, those users may take matters into their own hands and use aggressive anti-tracking or ad-blocking tools.
This would be bad for users who will lose personalisation, bad for publishers who will lose revenue, and bad for advertisers who will lose any way to effectively reach customers.