Today, customer behaviours, purchasing patterns, and overall digital interactions are studied meticulously, enabling businesses to deliver highly targeted customer experiences. Such insights form the foundation of modern marketing, enabling businesses to understand their customers deeply, optimize individual experiences, and allocate budgets to the most effective advertising avenues for maximum return on investment (ROI). All of which largely rely on cookies.
What are Internet Cookies?
Internet cookies, or just “cookies,” are small text files stored on a user’s browser or device whenever they visit a website. Cookies serve multiple purposes, primarily to track a user’s preferences and deliver these insights to the business behind the website, enabling them to use this information to deliver personalized content and other advertising material to each user.
However, in a world of rapidly expanding data privacy regulations, where users are becoming increasingly conscious about their privacy, appropriately using and managing cookies is vital to any organization’s regulatory compliance efforts. Additionally, customer trust is a vital asset for any organisation, and companies that exploit cookies to collect excessive information on users risk regulatory fines and penalties.
Furthermore, the shifting technological landscape surrounding cookies, including browser restrictions, uncertainty over the future of third-party cookies, and evolving customer privacy expectations, necessitates that businesses adopt a highly proactive and informed approach to their cookie management. This involves strategically re-evaluating reliance on cookies, developing and implementing transparent cookie consent frameworks, and exploring alternative data-collection methods that ensure a comparable degree of user data collection without compromising the businesses’ ability to remain competitive in the digital marketplace.
The blog explores critical questions related to cookies, including their functionality, types, drawbacks of using them, impact on user privacy, and solutions for cookie consent compliance. Read on to learn more.
How do Internet Cookies Work?
Internet cookies are text files that a website automatically creates when a user visits it. These are then stored locally on the user’s device or browser. Afterwards, whenever a user revisits that website, their browser automatically sends these stored cookies back to the website’s server. This enables the server to recognize the particular user, restore their previous interactions, and continue to provide a highly personalized browsing experience tailored to their preferences and past browsing history.
Cookies assign a unique identifier to each user’s session. This allows for continuity across multiple interactions. It does so by creating an “authentication cookie” that is created and stored to ensure a user does not need to constantly log in every time they browse to a different webpage within the same website. Cookies also facilitate other similar operations within the website, such as shopping carts, user preferences, language selection, and customized content delivery.
Types of Cookies?
Some of the most common types of cookies include the following:
Session Cookies
Also known as transient cookies, session cookies are temporary data files created when a user visits a website. These cookies only exist and function for the user’s active session and are automatically deleted once the user ends their session. Websites primarily use these cookies to facilitate essential website functionalities, such as maintaining user logins, updating digital shopping carts, and enabling smooth navigation between various webpages on the site.
These cookies provide seamless interactivity throughout users' sessions. More importantly, since these cookies are designed to be deleted once the session is over, they pose minimal risk to privacy.
Persistent Cookies
On the other hand, persistent cookies remain stored on a user’s device even after a session ends. They can be stored for a lengthy, predetermined period, ranging from a few days to years in some cases. These cookies allow a website to remember user preferences, settings, and behavioral patterns across multiple devices and visits. These include remembering a user’s language choices, login credentials, and personalized content recommendations based on their browsing history.
For businesses, these cookies allow precise marketing opportunities. They enable a highly personalized marketing effort that also delivers enhanced user retention through tailored experiences. At the same time, they must also manage these cookies transparently, which aligns with the relevant regulatory requirements.
Authentication Cookies
These cookies are designed specifically to verify and authenticate a user’s identity upon login. Doing so ensures secure access to protected content. Additionally, these cookies store session identifiers or tokens, which allow a user to continue accessing a site without having to re-enter their login credentials every time they visit a different webpage during a single session or even subsequent visits.
Authentication cookies also elevate a website's overall usability by streamlining users’ access to the portal, application, or service. While these cookies do allow for a smoother browsing experience, websites must ensure that they are managed securely through appropriate measures, such as encryption, HTTP-only attributes, and secure flags.
Tracking Cookies
Tracking cookies are used to monitor users’ browsing behavior and identify patterns across multiple websites. This is primarily done for marketing, analytics, and advertising purposes, as these insights enable advertising networks and analytics providers to create comprehensive user profiles for each individual user based on their unique browsing habits. These profiles can then be used to create targeted advertising campaigns that are precisely tailored to each user’s search intent.
While it is easy to see the tremendous benefits of such insights for digital businesses, they also raise significant privacy and compliance concerns due to the numerous risks associated with extensive user tracking and profiling. For this reason, several data privacy regulations, primarily the GDPR, outline strict conditions under which such cookies may be used.
Zombie Cookies
Probably the most controversial type of cookie, zombie cookies are named so because they can regenerate even after a user has explicitly deleted or disabled them. Such cookies utilize storage locations, including HTML5 local storage, Flash storage, and browser caches, to persistently reappear and continue tracking user activities. Users can theoretically remain oblivious to such cookies for years.
Businesses typically do not intentionally deploy such cookies. These types of cookies were primarily used by analytics and advertising providers who sought uninterrupted access and tracking that was not subject to user choices. Hence, businesses must actively avoid deploying techniques that may lead to zombie cookies, as they pose a danger not only to an organization’s regulatory compliance but can severely dent customer trust and market reputation.
How do Cookies Affect User Privacy?
Cookies are effectively the biggest bone of contention between businesses and their customers when it comes to user privacy. For businesses, cookies have a tremendous value proposition as they enable the collection of detailed information related to users’ browsing habits, user preferences, and online behaviors. Using this information, businesses can eliminate the “guess work” that used to be involved in traditional marketing efforts and deliver precise campaigns that almost always guarantee results.
Additionally, such extensive user profiling enables businesses to tailor user experiences for each individual, ensuring that every user’s interaction with a website is based on their unique needs, wants, and habits. Simultaneously, cookies are not without their share of privacy issues, as most users consider the very concept of cookies tracking their interactions across multiple websites and creating comprehensive profiles to be invasive and unsettling.
Data privacy regulations, most prominently the GDPR, aimed to address these privacy issues associated with cookie-based tracking by empowering users to have a larger say in how, when, and to what extent cookies could be used to monitor their digital browsing behavior. Since the introduction of the GDPR, numerous other jurisdictions have introduced their own data privacy regulations with similar provisions, in addition to various regional and international standards and frameworks.
Each of these has distinct compliance requirements, such as requirements for transparency, user consent, data minimization, and robust privacy disclosures regarding data collection practices. It’s also important to note that non-compliance and violations can lead to severe financial penalties, legal consequences, and above all, the loss of customers’ trust in the business’s ability and willingness to protect their right to privacy. For example, in 2020, the CNIL imposed a fine of €35 million on Amazon for its inadequate use of cookies.
Moreover, users globally are more informed and aware of their data rights than ever before, making them increasingly wary of the indiscriminate sharing of their personal data. This has led businesses to reassess their cookie usage practices, with an increased emphasis on balancing data-driven marketing effectiveness with the need to preserve users’ data privacy expectations and regulatory obligations.
Drawbacks Of Cookies
Some major drawbacks of using cookies include the following:
Inaccurate Identification
Cookies rely almost entirely on a user’s device or browser identifiers rather than their individual identity. Consequently, there is a risk of inaccurate user profiling when multiple users share a device or when a single user accesses a site through multiple devices, as their browsing behavior may vary depending on the device they use.
Since businesses rely on the precision-based analytics from cookies to deliver personalized user experiences, the aforementioned instances of inaccurate identification can contradict the entire purpose of cookies. Such data can be detrimental to marketing campaigns that rely on cookie insights, negatively impacting the end-user experience and undermining the effectiveness of customer engagement strategies.
To ensure such instances are eliminated or, at the very least, minimized as much as possible, supplementary methods such as authentication-based identification must be adopted to enhance the accuracy and reliability of user identification and the subsequent data analysis.
Inconsistent State On Client & Server
Apart from collecting insights related to user activity and behavior, cookies are also used to maintain both state and session management between the user’s browser and the web server. This feature enables a user to remain logged in even after hours of inactivity. However, in some cases, inconsistencies can arise when cookies fail to synchronize properly between the user’s browser and the web server. This typically occurs when a user manually deletes or blocks cookies, and the server, still expecting session information from these cookies, results in unexpected behavior such as page crashes, session disruptions, or other errors.
While it may not seem like a major issue, such inconsistencies lead to a degraded customer experience. Suppose a user wants to check out their online shopping cart, but the checkout page keeps on crashing, a product page does not load properly, or the checkout page constantly crashes when the user tries to redeem a voucher. These can lead to customer frustration and can damage their trust and preference for a business.
To ensure these issues are mitigated, businesses must have a robust session management protocol in place, with appropriate fallback mechanisms and thorough validation processes.
User Consent Fatigue
Due to their regulatory obligations, digital businesses must obtain explicit user consent before storing cookies on users’ devices, particularly in cases involving tracking and advertising cookies. Consequently, users get constant cookie consent pop-ups on almost every website they visit. This often leads to a phenomenon known as “user consent fatigue,” where users simply accept or reject cookies without understanding or reading the details of what they’re accepting or rejecting. This represents somewhat of a Catch-22 for businesses: eliciting explicit user consent without compromising their online experience.
The adverse effects of user consent fatigue include diminished user trust in the effectiveness of consent mechanisms and websites’ data-handling practices in general. Some may even consider this a form of dark-hat practice, where the very purpose of consistent consent pop-ups is to facilitate user consent fatigue.
However, businesses can avoid this by adopting a clear and user-friendly consent management protocol, where unnecessary prompts are minimized, layered consent models are deployed, and, above all, concise and transparent information is provided to users that delivers the relevant information succinctly.
Privacy & Compliance Challenges
Arguably, the most significant and troublesome issue with cookies regarding data privacy is the extensive collection and profiling of data. Cookies, especially third-party and tracking cookies, collect extensive data in terms of both volume and variety. This includes information about the user’s device, such as the operating system (OS) they’re using, the screen size of their device, the language being used on their device, and their overall session duration. However, global data privacy regulations now severely restrict the kind of profiling information businesses can collect using cookies.
For businesses, this presents a formidable compliance challenge, as such data collection has become a critical aspect of modern digital marketing. Addressing this challenge is both complex and resource-intensive, requiring businesses to implement regular audits, comprehensive policy enforcement, and, in many cases, a complete overhaul of their marketing practices. Failure to do so results in substantial fines, legal consequences, and reputational damage, leaving businesses with no choice but to address this challenge.
This entire ordeal can be made easier when businesses adopt a strong data governance framework, where clear and accessible privacy notices inform users about their data collection practices, and implement the latest and most effective cookie compliance strategies and tools to streamline and automate their data privacy compliance obligations.
5-Step Cookie Consent Checklist for Compliance
Cookie Audits
Much has been written about the immense benefits cookies can deliver for businesses. However, it is equally important for businesses to comprehensively understand their own cookie use. This is exactly what a cookie audit delivers. Such an audit involves a systematic review of all cookies used on the website, categorizing them based on their functionality, documenting their purpose, and, most critically, matching them to their associated data collection practices currently in use on the website. Conducted regularly, such an audit ensures that an organization has an up-to-date understanding of its cookie policy, thereby facilitating prompt remedial measures in the event of an issue being identified.
From a compliance perspective, cookie audits are incredibly beneficial in highlighting all associated privacy risks. Such a proactive approach enables the safe removal of unnecessary and redundant cookies before they can cause any issues. Furthermore, these audits are the perfect way to demonstrate organizational transparency and establish a chain of accountability. If needed, such documentation can be leveraged for regulatory purposes to demonstrate the organization’s efforts to ensure its cookie usage policy aligns with its legal obligations.
Clear & Unambiguous Cookie User Consent
Securing clear, unambiguous, and explicit cookie user consent from users isn’t only considered a good practice but also a strict legal obligation for businesses under most privacy regulations. Consent should be provided through affirmative actions, such as clicking an "Accept" button, and should not be assumed or obtained via pre-ticked boxes or implied methods. Furthermore, consent should be informed, ensuring users understand exactly what they’re agreeing to when they click “Accept” in terms of cookie usage, purpose, duration, and third parties that would have access to such information.
For businesses, it is important to clearly communicate the nature and purpose of the cookies that will be used. Doing so not only reduces potential liabilities but also improves overall compliance. Additionally, a robust record of users consenting to their cookie usage, including timestamps, consent mechanisms used, and other user choices, is highly effective in demonstrating compliance in cases of regulatory investigations or audits.
Provide Easy Withdrawal Mechanisms
Eliciting user consent for cookie use is one thing, but privacy regulations also require businesses to provide easy mechanisms for withdrawing consent. In the past, businesses have been found guilty of making it absurdly hard to withdraw consent through hostile interface design, where such options are either placed on obscure webpages, are harder to read, or require comparatively more steps compared to accepting cookie use. Users should be able to withdraw their consent with the same ease with which they can accept such cookies. Moreover, such mechanisms need to be easily accessible, prominently positioned, and must not involve complex procedures.
Providing such easy withdrawal mechanisms is also critical in preventing user privacy frustrations while also demonstrating an organization’s commitment to regulatory compliance and respecting user choices.
Regularly Update Cookie & Other Policies
A website frequently evolves its cookie usage and other privacy-related practices. While this is entirely within the industry norm, it is crucial to ensure that such updates are in line with regulatory requirements and recorded in the relevant documentation. Such documentation must also include information on cookie usage, data processing activities, compliance practices, the purpose and method of cookie use, the type of data being collected, third parties that have access to this data, and other relevant details, such as data retention periods.
Such regular updates ensure the website’s compliance activities keep pace with the evolving regulatory requirements. This not only mitigates legal risks and enhances overall transparency but also ensures that relevant stakeholders always have access to accurate and current information. Moreover, businesses should have solutions deployed that ensure any changes in their cookie usage or other data-related issues trigger an automated update to their policy documents, with minimal need for manual intervention.
Consistent Reviews
Regardless of how effective or resilient an organization’s cookie usage policy may be, regular reviews are necessary for both sustainable long-term compliance and addressing the evolving regulatory challenges. A solution that delivers compliance today may become ineffective in the future owing to some regulatory amendment or update. Hence, businesses must consistently revisit their cookie management strategies, consent practices, and user interactions to identify areas that require immediate or long-term improvement. This practice is also helpful in ensuring alignment with new privacy standards, as well as adapting to technological changes or shifts in customer expectations.
Additionally, such consistent reviews help minimize compliance gaps that occur due to overlooked updates or outdated processes that persist because of a lack of proper oversight. These reviews can include assessments of third-party cookie placements, vendor contracts, and transparency of consent notices. These can then be compared against industry standards and regulatory requirements to gain a comprehensive understanding of the organization's compliance.
Conclusion
Cookie consent compliance can be a daunting challenge. As repeatedly iterated earlier, cookies form a critical foundation for most businesses’ entire digital marketing strategy. Recent regulatory developments have necessitated a reevaluation of their use. However, balancing the use of cookies in line with modern legal requirements requires a solution that is both effective and easy to use, and, above all, automated.
It needs to be automated due to the sheer scale of the activities involved, including dynamic changes to privacy notices, a real-time overview of a website’s cookie usage, details on what data is being collected, and which third parties have access to it, among other things. Manually attempting to address these would put a significant degree of both financial and manpower stress on any organization.
That is how Securiti can help.
Securiti’s Data Command Center is a centralized platform that provides contextual intelligence, controls, and orchestration for the safe use of data and AI. Some of the most reputable brands across various industries rely on Securiti to address their data security, privacy, governance, and compliance challenges, enabling them to comply with both internal policies and several major global data privacy regulations.
Furthermore, the Data Command Center comes equipped with individual modules that include universal consent, cookie consent management, vendor management, privacy policy management, and others. These can all be leveraged to address any cookie-related compliance challenges an organization may face.
Request a demo today and learn more about how Securiti can help your organization ensure its cookie use aligns with relevant regulatory requirements.
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