Want to learn the exact difference between a first-party cookie and a third-party cookie? Go through Tagmate’s brief overview on how cookies are classified:

First-party cookies

When a website-owned and managed cookie collects and utilizes the user information including their personal data consensually, it is known as a first-party cookie.

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They are incredibly important for most websites as they enable functions like remembering credentials, saving cart information, and maintaining user preferences like language, location, and currency.

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First-party cookies also help websites display information based on your previous searches. For instance, a food aggregator website may show you suggestions for food items based on your last search queries, timing, and availability.

Third-party cookies

When a third party viz. an ad tech platform or a marketing tool uses a cookie to fetch information of users (second party) via a website (first party) using cookies, they are known as third-party cookies.

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They track the user activity across the internet when using the same browser in order to create a comprehensive user profile on the basis of search behavior and browsing habits.

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Third-party cookies are important for behavioral marketing as well as retargeting advertising which are both highly effective and popular among marketers.\

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First-party cookies vs third-party cookies: How the former will rule the internet

The fundamental difference between first-party and third-party cookies lies in their respective ownerships but the general sentiment against third-party cookies comes from the fact that they facilitate mass invasion of an unsuspecting user’s privacy.

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If a user consents to cookies that are owned by a third party, the website or publisher has no responsibility whatsoever, which can cause serious privacy concerns. Now, the third-party cookie can be owned by Facebook (Pixel), or an email service provider like MailChimp which is necessary for attribution purposes. 

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On average, a website has 20 cookies and most of them are third-party cookies that have a free hand to collect any personal information of users right from the device type, location, internet connectivity, and so on. A large number of cookies slows down websites and thus, they aren’t always preferred by website owners but are installed to facilitate important functions.

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This also means that the third-party cookie owners can sell the user data in the open market to other businesses which becomes a serious breach of privacy as user data can be traded across the web using cookie syncing.

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Cookie syncing is a process that allows tools like Demand side platforms (DSP), supply-side platforms (SSP), data management platforms (DMP), and customer data platforms (CDP) to share user information.

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SSPs help publishers in managing their ad inventory and shares it with DMPs which in turn compiles user profiles and optimizes ad spending for advertisers. This is facilitated by DSPs and CDPs, creating a complete ecosystem.

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Cookie syncing is essential because there may be discrepancies between the understanding of user-profiles and preferences among DSPs, SSPs, DMPs, and CDPs.

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The user information is matched by these platforms and synchronized for accurate targeting based on the user profile and activity.

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And that’s where the problem lies- users may have their data shared and consumed by companies that they have no idea of and they don’t have control over the data.

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Anybody with the designated program for the concerning cookies can access the user data. For example, if you browse a knowledge base website for a particular topic, it can sell the cookie to organizations that consider you as a potential buyer based on content consumption.

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On Feb 2, 2022, Belgian Data Protection Authority (DPA) officially stated IAB (the body of digital advertisers and marketers in Europe) has breached GDPR on multiple occasions. 

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Similarly, US legislators have approached privacy concerns through the Consumer Data Privacy and Security Act of 2021, the Safe Data Act, and the Consumer Online Privacy Rights Act.

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Also, the American Data Privacy and Protection Act has resurfaced with a new iteration with more public representatives voicing their concerns amid an increasing number of antitrust lawsuits. The California Consumer Privacy Act of 2018 (CCPA) also considers cookies as unique identifiers. 

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In a bid to limit the collection of information, it will limit the number of Facebook pixels to eight, thereby compelling marketers to prioritize the user information that they aim to collect. Nevertheless, if the users opt-out, the tracking is ceased altogether.

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It resulted in the now-famous feud between Apple and Facebook which resulted in a spew of news, opinionated articles, and memes, of course.

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Facebook Audience Network is impacted the most as behavioral targeting and retargeting turned almost ineffective and inaccurate with a majority of users opting out of tracking.

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Thus, first-party cookies will become the de jure choice for marketers and advertisers.

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