The End of Third-party Cookies Should Not Hurt Retailers

Changes to some of the world’s most popular web browsers may impact how advertising networks and cross-site analytics tools track consumer behavior online. Even though the changes could impact some marketing campaigns, the conclusion of third-party biscuits must not hurt online retailers.

Google and Microsoft have recently announced (or confirmed) plans to alter how their web browsers — Chrome and Internet Explorer, respectively — and other services handle specific kinds of site or application monitoring. Mozilla, making the Firefox web browser, announced similar plans earlier this year, and Apple has been blocking third party cookies in certain versions of its Safari browser since 2003.

In the online context, a browser or cookie cookie is a small text file sent from the browser to the user’s computer or mobile device, where it’s stored. The cookie includes a way of identifying the user or monitoring user preferences. When a user visits a website, that site may check for the existence of cookies and utilize some of the saved information to provide a personalized experience or track consumer behaviour.

Third-party Cookies

There are numerous distinct kinds of cookies that could be transferred from a site or application to a user’s system. So-called first-party cookies are sent directly from the domain the user is visiting. For instance, if a user moved to abc.com and abc.com delivered a cookie out of its own domain for its own customization solutions, that would be a first-party cookie.

The current confirmations from Google, Microsoft, and Mozilla wouldn’t alter how first-party cookies work, and shouldn’t change things like onsite personalization, which is important for online merchants.

By comparison, a third party cookie comes from a domain other than the one a user is seeing and could be used to track user behavior across a number of unique websites.

For instance, if a user visited a magazine site that displayed advertising banners delivered within an advertising network, that advertising network — that is a third party in the surfing experience — could send a cookie to the user’s computer or mobile device. When the user visited the following site that also used the exact same advertising network, the third party cookie could be retrieved and the advertising network would now have information about a specific user’s action on two distinct sites.

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It’s third-party cookies that browser manufacturers intend to block.

Popular web browsers, such as Microsoft’s Internet Explorer, have announced restrictions on the approval of third-party cookies.

Retargeting Efforts

Third-party cookies are often utilised in retargeting campaigns wherein consumers that see an internet store are shown ads from this shop when they visit other websites. Retargeting can work a few different ways. Here’s a step-by-step illustration of one form of retargeting.

  • Site An ecommerce website, wants to retarget website visitors who look at goods but leave without making a purchase or registering, so it puts a retargeting script from”Ad Network” on its website.
  • When”Visitor” navigates to Site A, Ad Network’s retargeting script serves a third party cookie, keeping a unique identifier on Visitor’s computer and keeping track of which products Visitor looked at on its own server.
  • Site B, an informational website, wants to earn money with advertising. It puts an Ad Network script on its website to automatically load relevant advertisements.
  • Visitor navigates to Site B. Ad Network’s ad-serving script recognizes that the cookie and displays an advertisement featuring products from Site A that Visitor revealed an interest in.

But seeing an effect on merchants, there likely won’t be one. If Google and Microsoft were only stopping third-party biscuits, then this kind of retargeting wouldn’t work. But they’re likely, by all accounts, a replacement system. Right now we do not know precisely how that replacement system will function, but I will speculate that it may go like the following.

  • Website A, an ecommerce website, wants to retarget website visitors who look at goods but leave without making a purchase or enrolling. So it puts a retargeting script from”Ad Network” on its website.
  • When”Visitor” navigates to Site A, Ad Network’s retargeting script registers with the browser, asking an anonymous unique identifier for Visitor and keeping that identifier and Visitor’s browsing behaviour on its own server.
  • Site B, an informational website, wants to earn money with advertising. It puts an Ad Network script on its website to automatically load relevant advertisements.
  • Visitor navigates to Site B. Ad Network’s ad-serving script contacts the browser asking Visitor’s anonymous unique identifier and comparing the result to its own database of unique identifiers. If it finds a match, it displays an advertisement featuring products from Site A that Visitor revealed an interest in.
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Notice that there isn’t any gap for Site A, the ecommerce website, or Site B, the informational website. The difference is in how Advertisement Network gets user information.

Thus, this shift in third party cookies is unlikely to directly affect merchants that rely on retargeting.

Advertising Networks Could Still Get User Information

Both Google and Microsoft have said they can replace third party cookies using an anonymous identification system that would allow advertisers to utilize cross-site data to serve advertisements or positively impact user experience, but that would offer users more control over how information was collected and that may offer a greater level of online security. It’s not yet known precisely how either Google or Microsoft’s new system would operate, but it might resemble the process I’ve described previously.

“Technological improvements can improve users’ safety while ensuring that the net remains economically viable. We and others have lots of theories in this area, but they are all at very early stages,” Google spokesman Rob Shilkin told USA Today in September.

Since both Google and Microsoft derive a large amount of revenue from Internet advertising sales and because both now use third party cookies to track users and serve retargeting advertisements, it’s extremely probable that advertising online isn’t going to change functionally, but instead procedurally.

Online marketers from ecommerce companies will likely not see a change in the kinds of ads available or at the sort of consumer data accessible, but advertising networks and cross-site analytics tool manufacturers will have to adhere to terms and conditions that browser manufacturers impose.

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A Shift in Power

The most crucial change that third party cookie blocking may present could be a matter of control or power. At the moment, there are quite a few firms offering tracking-related services. These solutions have been able to openly use third-party cookies and other methods to collect user certain data in certain jurisdictions. Under a new Google or Microsoft data collection version, those companies would, perhaps, need to register for and abide by a set of conditions that could give users the chance to opt-out of some kinds of monitoring or that might turn monitoring off by default.

Although this new approach to monitoring will surely be a popular topic for sometime, an anonymous identification system might be better for advertising networks than options like banning any kind of monitoring or notifying users prior to each and every cookie is served.

Additionally it is worth noting that if browser manufacturers do not take action to provide users more control and privacy, legislative bodies may do it for them. The European Union has had a digital privacy directive since 2002. This directive, which was amended in 2009, requires websites to notify users when cookies are used.