In plain English: What are cookies – and why are they on the way out?

By Rachel Foskett, Senior product marketing manager

A blog series explaining some of the concepts, processes and technologies we need to do our jobs – in plain English.

‘Cookies’ is a piece of tech-speak that’s now making its way into the general population. People are much smarter now as to the ways they are tracked online. And that’s why it’s such a massive topic – both for the general public and for those of us working in the digital ecosystem. 

Over the last few years, regulators all over the world and even internet companies themselves have introduced more stringent data protection policies to protect consumers by limiting the ways their personal data can be collected, stored and used. One of the most important and far-reaching things internet companies have done to react to these laws is to crack down on cookies. 

But why? And what does this mean for digital advertising?

What is a cookie?

To start with, let’s go back to basics. 

Essentially, a cookie is a small text file that is stored on your web browser with some data in it. They were invented to solve the problem of remembering useful information when a person surfs the web – anything from remembering your login details to knowing your favorite pages. 

In digital advertising, there are two main types of cookies. 

First-party cookies are placed on your browser by the host domain (i.e. the website you’re actually visiting). So, for example, if you visit a clothing website and add some shoes to your basket, they might place a cookie on your browser that remembers the contents of your basket so the same shoes are there next time you visit the site.

Third-party cookies are placed on your browser by partners and companies that don’t own the website you’re visiting. Generally, this is ad tech businesses like demand-side-platforms (DSPs) or measurement partners. These cookies can be read by any website that uses that third-party partner’s code. If we go back to our example of browsing for shoes, a third-party cookie would allow another business to show you an ad for the shoes in your basket, or a similar pair of shoes.

As well as being used for targeting, third-party cookies have also been a fundamental part of most digital advertising measurement. This is because they ‘remember’ that an ad was shown to a person on one website, allowing us to link that to that same person buying a product or visiting another website after seeing that ad.

So, what’s the problem with cookies?

For several years, there have been concerns about internet companies exploiting individuals’ data through the use of third party cookies. The idea of that company you’ve never heard of using data about your internet browsing behavior, to most people, feels pretty invasive. That’s what privacy laws such as the General Data Protection Regulation (GDPR) in Europe are designed to prevent – and they specifically expand the definition of ‘personal data’ to include cookies in order to limit their unbridled use.

And with this change in regulation, internet browsers have responded. In 2017, Firefox and Safari blocked the use of third-party cookies on their browsers. And, while they are currently still allowed on Google Chrome, the browser that takes the biggest share of web-surfing, just over 60%, Chrome has recently announced they will be blocking third party cookies within the next two years. 

From that point, third-party cookies will be essentially defunct.

The cookieless future

Up to now, the third-party cookie has been a fundamental element of digital advertising. With the end in sight, the whole industry is now looking for ‘cookieless’ alternatives in order to continue the audience segmentation, targeting and measurement that makes digital advertising such a powerful tool for marketers and keeps much of the digital economy alive.

So what does the cookieless future look like? Take a read of our blog In plain English: How does cookieless targeting work? to find out.

If you would like to learn more about how to prepare for a cookieless world, book an MiQ Unlocked session or get in touch.