There is a lot of talk within the industry about the future of third-party cookies.
Some say they will always have a place in the online advertising ecosystem, while others argue they simply won’t be around in the coming years, either due to ad blockers or new technologies that will provide universal tracking across devices, therefore replacing the need for third-party cookies.
Regardless of your position on the issue, one thing is clear: For advertisers, marketers, and Ad Tech companies, there are a number of benefits to moving away from third-party cookies and adopting a first-party-cookie approach.
Before we get into the why and how of adopting this method, let’s take a quick look at the difference between first- and third-party cookies.
What Are First-Party Cookies and Third-Party Cookies?
Cookies are created every time a user accesses a website. Sometimes, only a first-party cookie is created, but most of the time, both a first- and third-party cookie are created. The difference between the two has to do with who creates them.
First-party cookies are created by the website a user visits directly. For example, if you visit cnn.com, thehuffingtonpost.com, and nytimes.com, then all those sites will create a cookie (one for each site) and save them to your computer.
Third-party cookies are created by other parties, not the website. For example, let’s say you visit cnn.com and read a few articles; cnn.com will create a first-party cookie and save it to your computer. Now, as cnn.com (like most other publishers) uses online ads as a way to monetize its content, the ads you see on the pages will also create a cookie (e.g. in ads.somedsp.com domain) and save it to your computer. As these cookies are not created by cnn.com, they are classified as third-party cookies.
Third-party cookies are an extremely common part of online advertising, but there are a few problems associated with them. As mentioned above, one of the main issues advertisers and publishers face is the growing popularity of ad blockers and other methods that block third-party tracking.
Third-party cookies are blocked when a user does one or more of the following:
- Browses the web in private mode.
- Uses Safari as their web browser on Apple’s mobile devices (third-party cookies are blocked by default on Safari iOS).
- Changes the cookie and tracking settings in their browsers.
- Uses Tor.
- Installs ad blockers or similar add-ons.
Avoiding third-party cookies being blocked isn’t the only advantage of adopting a first-party-cookie approach, however.
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Benefits of First-Party Cookies
There are a number of benefits of using first-party cookies, including:
More control over your data: As the data is collected by your domain, you get greater control and ownership of the data you collect.
Longer life span of cookies: While all types of cookies can be deleted by users, first-party cookies are not automatically blocked by third-party blockers, e.g. private browsers and ad blockers.
Branded domains: If you use first-party cookies, users will see your brand (e.g. mybrand.com) instead of the Ad Tech’s brand (ad.adtechcompany.com). This type of domain branding is often referred to as domain white labelling.
Using first-party cookies allows you to store and better utilize the data you collect as well.
How to Use First-Party Cookies
Now that we’ve explored the benefits of first-party cookies, it’s time to look at how advertisers and marketers can adopt a first-party-cookie approach. Here’s a step-by-step guide:
1. Create a subdomain of your main site, e.g. ads.mybrand.com.
2. Use a first-party wildcard cookie — a cookie in your main domain (e.g. mybrand.com) that is also available in subdomains (e.g. ads.mybrand.com).
3. Store your Ad Tech stack (e.g. your ad server, DMP, etc.) under your subdomain (e.g. ads.mybrand.com). This will allow you to serve ads, or at least serve dynamic creatives, and collect data in the data-management platform (DMP). If you are using third-party vendors (which will be the case for most), then you will have to point your subdomain to the vendor’s infrastructure. There will also be some configuration needed on the vendor’s side.
In addition, if you have a partnership with another website and have your pixels firing on their site, that data will also be collected under your domain as the server calls will be made to ads.mybrand.com. It’s important to note that even though you will be creating a third-party cookie, the partner site will only share the data with you. Also, the website’s visitors will not see some generic ad domain (e.g. advertising.com), but your specific brand (ads.mybrand.com).
Limitations of Using First-Party Cookies
While the move to first-party cookies will provide you with a number of benefits, there will still be times when you need to use third-party cookies in some way.
For example, in order to run retargeting campaigns on other sites, you will need to sync your first-party cookies with third-party platforms (e.g. DSPs and ad exchanges). However, you won’t need to share every site interaction your users have with the third-party platforms, which will allow you to protect your highly valuable audience data.