Third-Party Cookies: What You Need to Know

Third-Party Cookies: What You Need to Know

What are cookies

Google recently announced that they’re pushing off discontinuing third-party cookies until 2023. You’re not living under a rock. You’ve been hearing about cookies going away, and a cookieless future. You’ve also been clicking “accept cookies” for quite some time on websites, but you don’t really know what it all means. The question is, should you care and what’s going to happen next?

Let’s start at the beginning, what are cookies in the first place.

Don’t let its cute name mislead you. Cookies have nothing to do with food or consumption. But like double chocolate chip cookies, they will stick to you for a while.

In the simplest terms, cookies are data that are stored on your browser. Every website you visit collects data about you, (location, what you clicked on, searched for, and if there’s a login, then connecting it to data you provided like age, gender etc.). The data is stored in packets called cookies. Every time you revisit a site those cookies are reactivated. That’s why stuff stays in your shopping cart for a few days and you don’t have to log in every time you revisit some sites. They already know it’s you. You accepting their cookies allows them to be gracious hosts. They can anticipate your every need, and let you know that those shoes you’ve been looking at are on sale.

What are first-party versus third-party cookies?

When data from cookies is collected from sites that you visit, that’s called first-party data. Each site knows what they know about you, but they don’t know what you don’t tell them. If you go to another site it’s restarting a relationship. It’s not a friend group, they don’t talk to each other. Imagine it’s Suzie, your neighbor, and John from College, and Mrs. A, your kid’s teacher. You have unique relationships with each of them. They don’t talk to each other, so they each know different things about you.

Now imagine if someone put together a packet containing all the information from all the people you knew. This packet was then distributed to everyone in the future so they’d have a complete picture of you. That’s basically 3rd party cookies. It’s convenient for the people who want to get to know you better, but there’s an element of creep in it. Like how did Mrs. A. know that you ran out of dog food the other day and is now mentioning it in a math problem? And really, is it important for Neighbor Suzie to know you are not going to your college reunion?

information available with first party data versus third party data

The problem with Third-Party Cookies

Privacy concerns around 3rd party cookies are nothing new, but the world at large has finally acknowledged people’s inherent right to privacy and that people should have more control over how their data is shared.

Really, just think of it like telling your sister a secret and then she goes and shares it to everyone. She’s not trying to hurt you, but hopes that people will be sensitive or something like that. Still wrong. That’s third-party cookies for you. And that’s one of the reasons why Google is doing away with them on Chrome.

Impact on the ad tech landscape

This has a huge impact on the ad tech landscape. Right now users (ie: regular people) are served ads based on information gleaned from both first and third-party data. Combining the two data sets offers advertisers a robust view of the user. Advertisers can then tailor the ad experience to the user. 

This system works for both parties in that the user generally only sees ads for things they’re interested in. In turn, the advertiser doesn’t waste their ad dollars advertising to people who will never buy their products. These ads are served across platforms (desktop to mobile to tablet) and across sites. This is done through 3rd-party data; that recognizes that the person who was looking at the blue shoes on one site, is the same person looking for chicken recipes on the next site. Advertisers can then retarget an ad for those shoes, or share fashion-related ads and the like.

If advertisers can no longer target ads to specific users they won’t be willing to pay that much for advertising space. Publisher’s revenue will suffer, and they may no longer upkeep the free content they provide or they may lower the quality or frequency. In turn the user will lose out on information they’re seeking. It’s a cyclical loop that can only be solved with more data, but how can advertisers get the data they need while respecting the user’s privacy?

What users/people should realize is that people knowing things about them is not necessarily a bad thing. Sharing information is important. Think of HIPAA waivers in doctors’ offices. Doctors can’t talk to any rando about their patients, but they can share relevant information with people the patient said they can share with, like other doctors, insurance companies.

Possible alternatives to third-party cookies

Solutions for a cookieless future, contextual data, combining first party cookies and third party cookies in pmps, capitalize first party data, unified id 2.0

Keeping everyone’s concerns and motivations in mind, the ad tech world is working on developing several solutions to address the loss of third-party cookies as well as respecting user’s privacy. With Google’s recent postponement, the ad tech sector has more time to prepare robust and effective measures to replace third-party cookies. The following is the four-pronged approach NMM is taking to ensure their publishers’ revenue while protecting their user’s data.

Capitalize First Party Data

First,  NMM will maximize data publishers already have. Every site is sitting on a gold mine of first-party data. Most publishers don’t know how to make sense of the data they’ve collected and turn it into action. At NMM, we evaluate each publisher’s first-party data to get a complete understanding of their users. Once we’ve identified aspects of the users, we partner publisher’s with like-minded advertisers and create unique PMPs to directly target users.

Contextual Data

Coming in from another angle, we are developing a strong contextual data solution. Contextual data approaches serving an ad based on the publisher’s content rather than a particular user’s data points. With this approach ads are displayed in a context relevant to what it’s promoting. For example, an ad for an e-reader will display on a page with book reviews. People who are on that site are likely to be interested in products and services relevant to the topics they are perusing. Because the ads are in the context of the rest of the page content the ads are less intrusive and readily accepted by users.

Contextual data used to be rudimentary, focusing on keywords and basic topics in ad serving decision-making. For example, a page that mentioned diet and protein would possibly feature protein shakes as an ad. It could not take into consideration the larger context of if the content was positive or negative toward diets. Lacking nuance contextual data was a potential brand safety risk (imagine a book review site panning a book that is advertised on a side rail, that’s not good for either party).

With sophisticated AI development, contextual data can be incredibly targeted. It’s no longer a holistic keyword and topic search, AI fully understands the content and tone of the pages making ads a natural fit.

With exceptional contextual data NMM can provide relevant and precise data to our partners giving them the confidence to purchase inventory that matches their targeted audience.

Combining Data Sets

The final prong brings together the strengths of each approach to supercharge NMM ‘s ability to partner publishers and advertisers. We have built technology around our publishers’ first-party IDs as well as contextual data to build pertinent and valuable verticals and inventory segments.

Unified ID 2.0

We are also partnering with the largest Identity Solutions in the industry, notably The Trade Desk’s Unified ID 2.0.

The Trade Desk is developing a program in which users will submit emails to every site they visit. These emails will be hashed and encrypted. It’s then sent to a database in which all the points of data they submit will be connected, creating a profile that can not be traced back to individual people. Therefore, protecting their privacy while also providing advertisers and publishers data to make decisions. The more sites that participate in Unified ID 2.0 the stronger and valuable it will be.

Pulling it all together

Sharing all this with our partners allows them to buy with clarity and confidence. Instead of advertisers purchasing inventory on a single target site, they now have access to NMM’s specified verticals for more diversified and targeted ads. 

For example website A focuses on the Keto diet, website B focuses on protein shakes and website C is about Pilates. We don’t just lump them together into a health and wellness vertical but ensure that they are compatible with each other, and approaches don’t contradict each other causing a brand safety issue. We can see where the users overlap by overlaying the first-party data of each site. With our large site list, creating a large targeted audience is easily achievable. Combining approaches really leads to a “two heads are better than one” effect.

So while the rest of the marketing world is fretting over the loss of cookies, wondering how they’ll ever reach their audience, at NMM we’re experienced captains, comfortably wading into choppy water. We have a strong plan forward, and the experience to adapt as needed. We are confident that a cookieless world will do exactly as intended, provide privacy security to users, and with our solutions advertisers will be as secure as ever in reaching their campaign goals. Sometimes it takes a dramatic shift to reevaluate and innovate, at NMM we welcomed and embraced the challenge and know our publishers and partners will be better off for it.


Esther Kurtz