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Jul 27, 2021 - 0 Minutes read

Why are Third-Party Cookies Useful in Programmatic Advertising and how do they work?


Online advertising is not easy, and new trends are now starting to change the game of advertisement forever. One of the best tools that are very useful for advertisers to retarget their ads to consumers is Third-Party Cookies.

Third-Party cookies are used by several websites to enhance the user experience of their audience. Remember the annoying popup that you have to click on when you are visiting a new website. That popup is there to inform you about all the third-party cookies that will be able to access your information.

Third-party cookies are a very important part of online advertising and they play a major role in making programmatic advertising effective.


What are First-Party Cookies?

Before getting to third-party cookies, you need to understand what first-party cookies are. First-party cookies are the cookies that are used by the domain that you are visiting to enhance your experience, while you are on the page.

Cookies are data and your preferred choices that the websites store so next time you visit, you won't have to give the same information again. Ecommerce websites use cookies to show you products that you are most likely to buy.

The information and your preferences are actually stored directly on the website. The website would have access to all the information and preferences that you are sharing while you are on the websites.


What are Third-Party Cookies?

Third-party cookies belong to other websites than the one you are browsing on. Many websites use codes from other websites to make it easier for users to share on social media.

Most bloggers would place codes from Facebook so their readers can share the blog post on Facebook. Due to these codes, Facebook can track which person is going to which websites. Google can also track the activity of users on other websites by third-party cookies.


What are the different types of cookies?

There are generally two types of cookies which are session-based cookies and persistent cookies. The session-based cookies only are active as long as you are browsing the website. It ends as soon as you leave the website.

The other kind of cookie is persistent cookies which keep track of your information for 6 to 12 months or even more. This cookie can remember your preference when you return to the website so you don't have to set everything again.


How are cookies used by advertisers?

Cookies are a very powerful tool that is used in advertising. Since cookies can be used to track the activity of the user and also gather the preferences of the users, cookies are vital to the advertising process.

When an advertisement is displayed by AdSense, there are cookies placed in the codes which track the activities of the traffic and what they do when they visit the targeted page.

This helps advertisers easily retarget the same traffic as they have shown interest to buy the product by clicking on the ad. It also helps advertisers to select which kind of traffic to target by collecting more information about the user's preference by using cookies.


Why are third-party cookies very important for Programmatic advertising?

Programmatic advertising relies on data to target the traffic strategically. Third-party cookies play a very major role in collecting the information of the users and also for knowing about their browsing patterns. Without third-party cookies, it won't be possible to know how the advertisements are performing.


⦁ Strategical targeting:

The essence of Programmatic advertising is in strategic targeting. Advertisers invest money in programmatic advertising because the ads are shown to traffic that can relate with the ads and have a need for the product. Third-party cookies allow programmatic advertising to do that by collecting the user's data and browsing history.


⦁ Retargeting

When you use advertisements like Google Adsense, the ads that are displayed to your traffic have cookies in them which helps to track the activity of the users on the target page. These data are later presented to you in the form of analytics which helps you understand which traffic should be retargeted again. Without third-party cookies, it wouldn't have been possible to retarget traffic.


⦁ Collecting Personalized Information

Third-Party Cookies collects information and choices of the traffic which helps advertisers categorize the traffic. These data help when the advertiser decides to run a new campaign. They can use this data to strategically select the traffic that has converted to sales in the past or has shown interest to boost ROI. 


If you are looking to make use of programmatic advertising to run optimized ads to your target segment you can use Bidtimize. Bidtimize is an online data-driven platform that connects advertisers and publishers making the advertisement profitable. 


Are Cookies a Threat to Privacy?

In the past few years, third-party cookies are realized by the government and authorities as a threat to privacy. Third-party is used to collect information about the users which are later used by advertisers to run targeted ads. 

Although users actually have the option to manage the cookies whenever they visit a new website, most users just simply allow third-party cookies.

As a user, you can also now ask the website owners how your data is used. You can more importantly ask them to delete all your data. There are options in most popular browsers to deactivate third-party cookies. Some browsers like Brave already have all the third-party cookies disabled by default. 


What would be the future of programmatic advertising be without third-party cookies?

Now, that the use of third-party cookies is questioned by the authorities, it is highly probable that by the end of 2023, third-party cookies will be completely removed from all websites. This would have major implications on search engines like Google. 

If third-party cookies are removed it would change programmatic advertising drastically as well. Advertisers would have to rely on other sources to collect the information.


Relying on First-party cookies

With the absence of third-party data, advertisers have no choice but to rely on the data that is collected by first-party websites. It would give more power to website owners. Open web advertisement would increase in popularity in the advertising world. 

It is possible that most of these websites register in platforms like Bidtimize to monetize their website instead of relying on Adsense for monetization. The cost of advertising online might increase because of this but right now all this is just mere speculation.


Collecting Data from Zero-Parties

 Now, most consumers are aware that companies are collecting their data from third-party cookies and providing them a personalized experience. Most users don't have a problem with this but they do have a problem with companies selling their data to make a profit. 

Consumers are selling their information and preference on other platforms in the form of surveys and polls. Advertisers can buy these data from the zero parties and use them in their ad campaigns. With the absence of third-party cookies, the use of zero-party data would likely increase by marketers.


Conclusion

With the probability of the end of Third-Party cookies coming soon, marketers have to find new ways to market to their target audience. It would no doubt change everything we know about programmatic advertising with the elimination of third-party cookies from the picture.  


Want to get better ROI with the help of data resources from Cookies?

If you are Looking for a programmatic advertising platform where you can start your advertising to optimize your ad campaigns for the target segment & want to get better ROI with the help of data resources, Bidtimize is the place. 

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WRITTEN BY

Bidtimize

Bidtimize is a full stack programmatic platform built for data-driven marketers. We are using the latest and greatest RTB technologies of artificial intelligence-powered tools to create futuristic, unique, and powerful displays advertising that are tailor-made to achieve your campaign goals.