First Party vs. Third Party Cookies. What’s The Difference?

In the past decade, nearly every website you visit has relied on cookies to improve user experience and tailor content. These small data files, called cookies, are sent to your computer by websites to keep track of certain behaviors and preferences. Although most cookies are generally safe and even beneficial, their use has become increasingly controversial. At the heart of this debate is the distinction between two main types of cookies: first-party and third-party cookies. While first-party cookies are designed to enhance user experience, third-party cookies have raised privacy concerns due to their role in tracking online behavior across sites.

This article will dive into the differences between first-party and third-party cookies, how they impact users and businesses, and what the future holds for cookies as privacy regulations evolve. We'll also look at alternatives for tracking that don’t involve third-party cookies and how businesses can adapt to the changing digital landscape.

What Are Cookies, and Why Are They Used?

Cookies are small data packets that websites send to your browser to remember information about you. These data packets are then stored on your device, so when you return to the site or visit another page, the site recognizes you. This recognition allows websites to create a more tailored experience. For instance, a site may remember your username, the items in your shopping cart, or your language preferences, making it easier to navigate and shop online.

However, not all cookies are the same. First-party cookies are created and stored by the website you’re visiting, while third-party cookies are created by domains other than the one you are visiting, often by advertisers seeking to track your behavior across multiple sites.

First-Party Cookies: Improving User Experience

First-party cookies are created by the website you are visiting directly. They serve a practical purpose, helping to enhance the user experience by remembering helpful information such as login credentials, language preferences, shopping cart contents, and even personalized settings or interests.

How First-Party Cookies Benefit Users:

1. Remembering Login Information: With first-party cookies, websites can remember your username and password, which saves you from entering them each time you return. This function is especially beneficial for frequent users of e-commerce or membership sites.
2. Saving Shopping Cart Data: When you add items to a shopping cart but don’t immediately check out, first-party cookies can save these items for your next visit. This capability enhances the shopping experience, making it easier to return and complete your purchase.
3. Personalizing Content: First-party cookies track your browsing patterns and interactions on the site, allowing it to display content more relevant to you. For example, a news site might show articles similar to the ones you’ve read in the past, making the experience more engaging.
4. Reducing Friction: Since first-party cookies remember your settings and preferences, they can simplify your interaction with a website. This reduction in friction makes it easier for users to find what they need and enjoy a smoother experience.

Because of their direct link to user experience and convenience, first-party cookies are widely accepted and are generally seen as non-intrusive. Since the website you are visiting is the one creating the cookie, there’s often a higher level of trust from users.

Third-Party Cookies: The Controversial Side of Data Tracking

Unlike first-party cookies, third-party cookies are created by a domain other than the one you’re visiting. They are often embedded by advertisers or data tracking companies with the goal of collecting information about your browsing habits, preferences, and interests across multiple sites. These cookies allow companies to build a profile of you, which can then be used for targeted advertising.

How Third-Party Cookies Are Used by Advertisers:

1. Tracking User Behavior Across Sites: Third-party cookies enable advertisers to track you across different websites. For example, if you browse for shoes on one site, you might see ads for similar products on another site later.
2. Creating User Profiles: By collecting data on your interests, buying behavior, and browsing habits, third-party cookies help advertisers build detailed user profiles. These profiles are valuable because they can lead to more personalized and potentially persuasive ads.
3. Retargeting Ads: When you visit a website but don’t make a purchase, third-party cookies allow advertisers to show you ads for the same product on other sites, encouraging you to come back and buy. This tactic is called retargeting, and it has become one of the most common forms of online advertising.

Why Third-Party Cookies Are Controversial:

Many users find third-party cookies intrusive because they enable data tracking across multiple websites, which can feel like an invasion of privacy. Additionally, there have been numerous instances of third-party data misuse, such as selling data without users’ consent or storing data insecurely. Due to these concerns, third-party cookies have faced mounting criticism, prompting new privacy laws to limit their use.

The Rise of Privacy Regulations: GDPR, CCPA, and Beyond

The backlash against third-party cookies has driven the creation of new privacy laws aimed at protecting consumers’ data. These regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States, are designed to give users more control over their data and to make data collection practices more transparent.

1. GDPR (General Data Protection Regulation): This European regulation requires websites to get explicit consent from users before using cookies. It also gives users the right to know what data is being collected and allows them to request the deletion of their data. Sites must display cookie consent pop-ups, making it clear what data will be collected and for what purpose.
2. CCPA (California Consumer Privacy Act): Similar to GDPR, the CCPA grants California residents the right to know what personal data is being collected, request data deletion, and opt out of data sales. It also mandates that companies make their data practices more transparent to users.

Both GDPR and CCPA reflect a growing movement toward data privacy and user consent, with other regions adopting similar laws. As a result, many websites have implemented cookie consent banners, allowing users to choose whether to accept or decline third-party cookies.

The End of Third-Party Cookies: A Turning Point for Digital Advertising

Given the increasing demand for privacy, several major browsers have already taken steps to phase out third-party cookies. Firefox and Safari have blocked third-party cookies by default, and Google Chrome, the most widely used browser, is set to eliminate them by 2024. The removal of third-party cookies marks a major shift for digital advertisers, who have long relied on these cookies for data-driven targeting.

Without third-party cookies, advertisers will need to find alternative methods for reaching their audiences. This shift is likely to change the landscape of digital marketing significantly, leading to increased focus on first-party data and new approaches to user tracking.

Adapting to a Cookieless Future: Alternatives to Third-Party Cookies

As third-party cookies phase out, marketers and businesses are seeking alternative ways to gather data and target their audiences. Here are some of the most promising strategies:

1. First-Party Data: Since first-party cookies will still be allowed, companies can rely more heavily on the data they collect directly from their websites. This data is often richer and more accurate, as it comes directly from users’ interactions on the site. Businesses can use first-party data to create personalized experiences without violating privacy regulations.
2. Contextual Advertising: Instead of relying on behavioral data, contextual advertising involves showing ads based on the content of the webpage the user is currently viewing. For example, an ad for sports equipment might appear on a news article about a recent sports event. This method targets relevant audiences without tracking users across the web.
3. Browser-Based Privacy Solutions: Some browsers are developing privacy-preserving tracking methods, such as Google’s Federated Learning of Cohorts (FLoC), which groups users into cohorts based on shared interests rather than tracking them individually. Although FLoC faced backlash and was eventually replaced, similar technologies are being explored to balance privacy with ad targeting.
4. Identity-Based Tracking Solutions: Some companies are developing identity-based solutions that rely on hashed email addresses or other secure identifiers instead of cookies. By asking users to log in, businesses can track user behavior while respecting privacy concerns. This approach can be effective for publishers and platforms that have strong relationships with their users.
5. Data Clean Rooms: Data clean rooms allow companies to share data in a controlled environment without exposing individual user information. They enable advertisers to match their data with that of a partner, such as a publisher, in a privacy-safe way. These solutions are particularly valuable for companies working with large datasets and aiming to analyze user trends without exposing individual data points.

The Role of Cometly in a Cookieless World

As third-party cookies become obsolete, tools like Cometly can provide a powerful alternative for tracking marketing performance. Cometly’s software is designed to help marketers understand the performance of their social media and digital advertising campaigns without relying on third-party cookies. This approach not only ensures privacy compliance but also provides reliable data on which ads are driving revenue.

With Cometly, advertisers can:

• Track their ad performance accurately without the need for third-party cookies.
• Get insights into their return on ad spend (ROAS) to make informed budgeting decisions.
• Attribute revenue back to specific ads, channels, and campaigns, offering a complete view of customer journeys and conversion paths.

By focusing on first-party data and privacy-friendly tracking methods, Cometly is poised to become an essential tool for marketers in the post-third-party cookie era.

Key Takeaways: First-Party vs. Third-Party Cookies

• First-party cookies are created by the website you’re visiting and enhance user experience by remembering login information, shopping cart data, and preferences.
• Third-party cookies are created by advertisers or other domains to track your behavior across multiple websites, enabling targeted ads but raising privacy concerns.
• Privacy regulations like GDPR and CCPA are limiting the use of third-party cookies, requiring websites to be transparent about data collection.
• Major browsers are phasing out third-party cookies, with Google Chrome set to follow suit by 2024.
• Marketers are adapting with alternatives, such as relying on first-party data, contextual ads, identity-based tracking, and data clean rooms.

As digital privacy concerns continue to shape the internet, understanding the differences between first-party and third-party cookies is more important than ever. By choosing privacy-friendly tools like Cometly and embracing alternative tracking methods, businesses can navigate the evolving landscape of digital marketing while respecting user privacy.