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First-Party Cookies vs. Third-Party Cookies (Biggest Differences)

Patrick Lane, Sr. Marketing Manager

Key Points

  • Cookies are small files that store user data to identify specific individuals whenever they visit a website.
  • First-party cookies only work on a single domain, while third-party cookies track users across multiple domains.
  • Privacy concerns have led many web browsers to start blocking third-party cookies, which presents a challenge for advertisers.

If you’re an attentive internet user, you probably noticed that starting in early 2020, most websites you visited had a pop-up notification asking you to accept cookies.

This was in part due to California’s Consumer Privacy Act (CCPA), which states all California consumers have the right to know how their data is used. That, along with similar laws like the European Union’s General Data Protection Regulation Act (GDPR), have raised questions about how third-party cookies impact online user privacy.

In this article, I’ll explain the difference between first-party cookies vs. third-party cookies, as well as the dramatic changes in store for them next year.

An overview of cookies in digital marketing

Cookies are small text files that collect and store user data. Web servers can’t save data on their own, so cookies help websites remember user activity.

When somebody visits a website, the domain creates a cookie and sends it to that user’s computer. The user’s browser stores that file, or cookie, which contains a unique ID that allows the website to identify them when they return to the site.

Websites implement cookies to track user behavior. This can include things like usernames and passwords, shopping activity, and items left in a digital shopping cart.

The primary types of cookies used are either first-party or third-party.

What are first-party cookies?

First-party cookies are created and used on a single domain. In other words, they aren’t shared with other websites or advertising partners. Here’s how they work.

When you visit a website, a snippet of JavaScript code fires up and creates a first-party cookie for you. Sometimes, the website will ask you to accept the cookie to proceed. And in some cases, you won’t be able to use key features of the website unless you accept.

In theory, these types of cookies improve and personalize your experience on the site. For example, when you visit an ecommerce site, and it remembers personal user data such as email addresses and passwords — that’s a first-party cookie at work.

First-party data is important because it contains information like language settings, items you add to a shopping cart, and other personal identifiers.

Generally speaking, people trust first-party cookies more than third-party cookies because they improve the user experience of a website.

Cookies also allow marketing teams to analyze user behavior which can result in improved brand messaging, stronger call to action (CTA) results, and a better understanding of their audience’s needs.

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What are third-party cookies?

Third-party cookies are created on one domain and shared across all third-party domains that use the same tracking code. Their primary function is to track user activity online and then display advertisements based on that activity.

Imagine you just viewed a coffee pot on Amazon, but you weren’t ready to buy it yet. Suddenly, you start to see ads for that product on other websites you visit.

That isn’t magic or coincidence. It’s third-party cookies at work. Here’s what happens behind the scenes.

Third-party ad tech companies store and manage lines of code to deliver and track ad campaigns across many different websites. So, if you’re a publisher, and you want to make money from an advertising network, you can place their ad serving code on your site.

Then, every website that uses that code within the ad network can collect and share third-party cookie data to dynamically serve ads to users based on their browsing activity.

What are third-party cookies commonly used for?

Website owners use third-party cookies in several ways, including:

  • Advertising and retargeting: When a user visits a website, the domain places a cookie in their browser containing information specific to them, such as what products or services they viewed. This cookie then allows them to retarget that user with ads across numerous channels, like social media, display ads, etc.
  • Social media: Many websites allow individuals to log in and share content on third-party websites. The social media sites can then track which sites users log in to or share content from, and use this information to display relevant ads as they scroll through their social media feed.
  • Live-chat software: This type of software also uses cookies to make the user experience better. The first time a visitor chats with someone on a website, websites place a cookie in their browser. In follow-up chats, the chat software will automatically identify them and their conversation history.

What’s the difference between first-party cookies vs. third-party cookies?

Marketers use first-party cookies and third-party cookies differently.

A single domain creates and uses first-party cookies. In other words, they only track user activity on the domain where they were created. First-party cookies tend to benefit the overall user experience.

Third-party cookies, on the other hand, are created on one domain and shared across all third-party domains that use the same tracking code. Their primary function is to track user activity and then display advertisements based on that activity.

What about second-party cookies?

You may be wondering about the less-discussed second-party cookies. Second-party cookies are when one website collects first-party data and then shares it with its trusted partners.

For example, a parent company may share data from one brand’s website with another brand under their umbrella. When third-party cookies go away, this type of data sharing may become more popular between complementary businesses.

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How do browsers treat first-party cookies vs. third-party cookies?

Most web browsers automatically accept first-party cookies because they improve the browsing experience. Although you can delete first-party cookies at any time, you’ll need to log back into all the websites you visit.

Currently, some browsers support third-party cookies, while others such as Mozilla Firefox and Safari block them. Furthermore, consumers can also clear cookies from their browser at any time. Privacy issues have been the main driver for ad blocking and getting rid of third-party cookies.

Data breaches like the Cambridge Analytica scandal in 2016 have brought the issue of data privacy to the forefront. Google Chrome will start blocking third-party cookies in 2023. This means that the large majority of browsers will no longer allow websites to track users via third-party cookies.

Future of first-party cookies vs. third-party cookies

Third-party cookies are on their way out. In addition to Google Chrome blocking them starting in 2023, Apple recently introduced their Intelligent Tracking Protection (ITP) 2.0, which makes it impossible to use third-party cookies for cross-site tracking, analytics, advertising, etc. Recent Apple iOS updates also allow users to manage their own data sharing while using apps.

While the death of the third-party cookie is a win for consumer privacy, it represents a new challenge for advertisers. They will have to adopt different strategies for reaching new audiences.

One possible strategy is to rely more heavily on data from first-party cookies to provide actionable behavioral marketing insights. Instead of focusing primarily on advertising to drive sales, marketers will need to focus more on conversion rate optimization (CRO) and creating an outstanding website experience for users.

Additionally, Google said it wants to work with marketers to help them reach their target audiences using less personal data through their Privacy Sandbox initiative.

Final thoughts

The decline of third-party cookies might actually be a blessing in disguise for brands. It will force marketers and advertisers to be more intentional in order to build and engage with an audience.

Markets will need to give more attention to building long-term relationships with customers and increasing customer lifetime value (LTV). The result could be a win-win, with customers getting better service from brands, and companies receiving more loyalty in return.

What are first-party cookies?

Cookies are small digital text files that collect and store user data. First-party cookies are created and used on a single domain, and they don’t share information with other websites or advertising partners.

What are third-party cookies?

Third-party cookies are created on one domain and shared across all third-party domains that use the same tracking code. Their primary function is to track user activity online and then display advertisements based on that activity.

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