Third-Party Cookies

By Drift

If you’ve ever flipped through your high school yearbook and cringed, you know the feeling: One day, we’ll look back on the era of third-party cookies and wonder, “What were we all thinking?”

While there was a time when third-party tracking data was the best way to learn about website visitors, that time is rapidly coming to an end. For various reasons — from consumers prioritizing digital privacy to new data regulations — third-party cookies will soon disappear.

The question for marketers is: What comes next? How do you engage potential customers with the personalized buying experiences they expect without using third-party tracking data?

As we’ll explain in this article, the answer is to leverage first-party data gained through authentic, meaningful conversations.

Before we get to that though, let’s look back at why third-party cookies seemed so valuable in the first place, how third-party cookies work, and why third-party cookies are going away.

What Are Third-Party Cookies (and Cookies In General)?

Let’s start by putting some of these terms into context. If you already have a handle on the difference between first- and third-party cookies, feel free to cruise past this section.

A cookie (in web lingo) is a bit of data that a website saves on a visitor’s browser. Originally, cookies were used to identify whether a web user had visited a site previously and, by doing so, provide a consistent site experience from page to page. Cookies have since evolved to serve many functions, especially in online marketing.

When discussing digital cookies, “party” refers to the relationship between the site visitor and the entity placing the cookies.

  • First-party cookies are placed by the publisher or owner of the site. So, for example, as a visitor to the domain, any cookies placed on your browser from our domain would be considered first-party cookies. As you move through our domain, these cookies collect data about you and your journey for our use alone.
  • Third-party cookies are placed by someone outside the domain you are visiting — AKA, a third party. These third parties can include social media and advertising networks. Anytime you visit a site that participates in one of these networks, the network can place third-party cookies to collect data on your behavior across multiple websites.

To sum up first-party data vs. third-party data, first-party data results from a one-on-one relationship between brands and their online visitors. Third-party data is captured through impersonal (and some would say involuntary) tracking across the internet.

Now you might be asking: Do second-party cookies exist? There is a surprising amount of debate here and the short answer is…sort of.

Second-party cookies aren’t really a thing, but second-party data is. This is when one organization shares information gained using a first-party cookie with a partner organization.

How Do Third-Party Cookies Work?

Technically, third-party cookies are pieces of JavaScript code that one site (the site you’re visiting) hosts for another site (the third party). When you visit a host site, the cookie can then be stored on your web browser. As you browse from site to site within that third-party network, the cookie will amass more and more information about you.

For example, let’s say you’re in the market for a new pair of running shoes. In the course of your research, you check out a few blogs and videos that review running shoes.

As you consume this content, a third-party cookie will preserve a record of your visit and interests. A few days later, as you browse something completely unrelated, you’ll notice ads for running shoes. This happened because the third-party advertising network “read” the saved cookie information, deduced you were interested in running shoes, and served up a relevant ad.

Uses of Third-Party Cookies

Ultimately, what third-party cookies do is enable organizations to compile profiles of individual internet users. The sites a person visits, the keywords they enter, the videos they watch — all of this tells a story about who the person is and what they’re looking for.

You’ve almost certainly experienced the disconcerting phenomenon of ads following you around the internet. This is because, with third-party cookies tracking your online behavior, an ad network (such as Google AdSense) has marked you as a target for a particular product or service.

Your social media habits generate third-party data about you as well. Using cookies, Facebook gathers information about the brands you follow, the topics you research, and the content you interact with so they can serve you more relevant ads.

As a marketer, this type of data can be immensely valuable for tailoring online buying experiences. For example, imagine a prospective customer visiting your website for the first time. If you have acquired third-party data about them, you can already pinpoint what organization they work for, the industry they’re in, the other solutions they’ve considered, and maybe even their budget. With this information, you can automatically serve up a landing page comparing your solution to others the visitor has researched or you can promote an email newsletter personalized to their industry (or even their company).

If you’re reading this article, chances are you’ve used third-party data on your site in this way. Your instincts are in the right place. Personalization is a winning strategy — and it’s what buyers want. In fact, buyer demand for quick, personalized experiences among B2B buyers grew 26% between 2020 and 2021.

However, buyers also believe that personalization must be earned and that it cannot come at the cost of their privacy. According to Pew, over 80% of Americans say the benefits of companies collecting data about them do not outweigh the risks…which brings us to our current dilemma: the cookiepocalypse.

Are Third-Party Cookies Going Away?

It may seem as if the whole marketing world has been anticipating the demise of third-party cookies for several years now and yet, they still haven’t made their exit. Nevertheless, now is not the time to get complacent — because the loss of third-party data strategies will have a seismic impact on marketers.

A McKinsey report calls the cookieless future “a reckoning for the advertising industry” that represents a “profound and abrupt shift” for every internet user. They report that, as a result, the publishing industry will be forced to find a replacement for $10 billion in advertising revenue.

And according to an Adobe survey (reported on in a joint ebook with Drift and other top partners):

  • 39% of marketers say they are “very reliant” on third-party tracking.
  • 41% of marketers say they are “moderately” reliant on third-party tracking.

For better or worse, all these marketers will soon have to break their reliance on third-party cookies because the end of third-party cookies is coming — and there are at least three good reasons to expect that:

1. Consumers Prioritize Privacy

A number of high-profile data leaks in recent years have got internet users thinking about who they can trust with their personal data.

A Consumer Reports study found that nearly all Americans (96%) feel more should be done to ensure companies protect their privacy. Nearly three-quarters of survey respondents were at least moderately concerned about their personal data privacy.

As for the use of third-party cookies, research has shown that many consumers find their use unsettling. As eMarketer reports, an international survey from late 2020 found that 66% of internet users feel that ads that follow them across devices are “creepy.” And in a 2021 survey, 44% of American internet users said brands using their data in advertising and marketing “often feels invasive.”

2. Expanding Privacy Regulations

With consumers becoming more concerned about their digital privacy, government regulators have been responding in kind.

Many marketers got the first hint that third-party cookies were going away in 2019 when a top European court ruled that, under the EU’s General Data Protection Regulation (GDPR), websites must secure visitors’ active consent to upload tracking cookies.

Other cookie-related regulations and proposals have followed, including:

  • The California Consumer Privacy Act (CCPA), which (among other things) requires businesses to notify web users if they collect personal information and how they use that information.
  • The ePrivacy Regulation, a set of proposed rules that would tighten up, clarify, and streamline some of the EU’s current internet privacy regulations.

Notably, regulations like GDPR and CCPA can apply to companies that are not based in the EU or California but still attract visitors from those regions. And violations come with the potential for very hefty fines.

3. Browsers Phase Out Support for Third-Party Cookies

The cookiepocalypse is currently set for the second half of 2024. That’s when Google plans to begin phasing out third-party cookies from the world’s most popular browser, Chrome. (If this sounds familiar, it’s because Google previously set the date for mid-2023 but decided to give marketers more time to make the transition away from third-party cookies.)

Chrome is a little late to the party here. Competing browsers, including Apple’s Safari and Mozilla Firefox, have been blocking third-party cookies by default for several years.

What to Do Before “The Death of Third-Party Cookies”

All of this is to say that marketers must find alternate strategies for engaging potential customers and personalizing the buying experience now. But this also provides an opportunity for you to rethink your data strategy as a whole.

Think about it: Third-party cookies are going away because, to put it bluntly, nobody likes them (except marketers, of course). To be more precise, nobody trusts third-party cookies to treat their personal information responsibly.

For marketers, the goal with data has always been to build relationships with customers and buyers — and you can’t build a relationship if you can’t establish trust. This is why, although third-party tracking is dying, first-party data is alive and well.

As you prepare for the cookieless future, here are a few important steps to take.

  1. Learn more about what the cookieless future entails. While we’ve covered a lot of ground here, there’s more to be said about the future of data-driven personalization. Start by checking out our recorded webinar on the cookieless future here.
  2. Evaluate your current data strategies. Now is the time to rethink how you collect and use customer data. Find out how to adopt a first-party data strategy that converts visitors into customers in Adobe’s ebook, Embrace a Data Strategy Your Customers Can Trust.
  3. Adopt personalized engagement tactics. Your first-party data will only be useful if you have an effective personalization strategy. Consider investing in tactics to help deliver relevant messaging such as building custom chatbots, crafting Conversational Landing Pages, and sending personal video messages with Drift Video.
  4. Generate first-party data with Conversational Marketing. No one wants impersonal experiences, but they don’t want invasive ones either. With a Conversational Marketing solution, you can build authentic relationships with visitors and gain first-party insight into goals and challenges — all while delivering a personalized experience that people will love.

Want a first-hand look at how Conversational Marketing builds trust and generates valuable first-party data? Get a demo today.

The information provided in this article does not, and is not intended to, constitute legal advice; all information, content, and materials available in this article are for general informational purposes only.