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With data regulation and privacy becoming increasingly important topics across the world, companies and brands understand the need for a robust mechanism in place that can help them retain their customers’ trust when asking them for their data.

Investments such as a cookie consent management system can go a long way in helping companies achieve that goal. It is equally important to understand the different sorts of cookies that websites use. Specifically, understanding the first party vs third party cookies could help companies devise their strategy when it comes to protecting their customers’ data.

What Types of Cookies Are There & What Makes Them So Different?

It’s important to know that while cookies have a specific purpose to perform, there are two distinct types of cookies. While they do not differ in terms of functionality, they do offer different options to the data handlers regarding how they’re used, who uses them, and what they mean for an average customer’s data privacy.

But how exactly do they differ, and if what similarities are there between the two?

First-Party Cookies

As the name implies, first-party cookies are the ones collected by the website you visit. Websites use first-party cookies for a variety of reasons but the most common ones are to track visitors’ behavior on the site and personalize their browsing experience online.

A good example would be Facebook. When you visit facebook.com, the website stores information about your browsing session on the site with the help of these first-party cookies. Information collected includes your login information, your time zone, what language you’re using, where you’re logging in from, what device you are on, etc.

The first-party cookies in this case help with two things. Firstly, it makes the browsing experience smoother since you’ll have a much more seamless experience when your preferences on Facebook are saved and loaded instantly to cater to your tastes. Secondly, it allows the website to show you targeted ads. Targeted ads are ads for items based on the information collected above.

Naturally, targeted ads promise a much better chance of conversion, making the information collected via cookies that much more valuable.

Third-Party Cookies

Third-Party cookies perform the same function as first-party cookies. The only difference is that they’re primarily used by a site from another company or entity.

How does that work? Consider the same Facebook example above. Suppose there’s a product ad on Facebook that caught your eye. You went to the product owner’s site and did some more research on it. However, you did not buy anything and continued your browsing. You might see the ad for that same product on another website. This is because the third-party cookies continue tracking your browsing data. Based on your past behavior, since you interacted with the product website earlier but did not convert, these little nudges from third-party cookies might finally get you to buy the item.

The most prominent difference between first-party vs third-party cookies is that the latter require express permission from your end in opt-in regime countries. Hence, whichever website you visit will have to ask your permission to install cookies on your machine. On the other hand, most first-party websites automatically install their own cookies on your device, although thanks to recent data regulations around the world, non-essential first party cookies may require your permission as well.

Second Party Cookies

Second-party cookies are a tricky subject since there has traditionally been a debate over whether second party cookies are technically cookies or not. The general operating principle behind second party cookies is simple. Two distinct websites, or parties, agree to share cookies.

Think of it as two websites collaborating to collect your information directly, to ensure you’re only letting names and sites you trust collect data rather than any third party website.

However, since second party cookies come with a barrage of their own set of challenges, particularly the fact that users online may not be willing to have their data collected by cookies from a site they do not know or trust, second party cookies are rarely ever used by websites.

What’s Next for Cookies and Brands?

Users around the world are becoming more cautious of sharing their data. Hence, websites might find that getting their customers to accept cookies on their devices may no longer remain as easy as before.

Google has previously announced that it will be blocking all third-party cookies on its browser. Considering how nearly 2.6 billion users use Chrome as their primary browser, this will impact how websites can target their users’ browsing habits across different sites.

But more importantly, this will have an implication for how brands view their customers and how they plan on reaching them. The most obvious route to take would be the most traditional which starts by building customer trust.

Hence, brands will need to create awareness within their customer base about how cookies can help them enrich their browsing experience. Rather than having one liner “Accept/Decline” notices, websites will need to get creative to assert the need of their customers’ data.

First-party data collection, analysis, curation, and above all, processing will take on greater importance than ever before. Furthermore, brands may begin to form strategic data alliances, i.e., a means to gain access to their partners’ customer data with the informed consent of the customers.

This exchange of first-party customer data could revolutionize how customer activity tracking works without rocking the boat too much. Similarly, brands can triangulate on their target audiences using their partners’ first-party data on top of their own data without compromising on the safety of the customers’ data privacy.

As some might argue, this idea already exists, although not in practice, in the form of second-party cookies. Whatever the case, it will see a tremendous surge in importance in the coming years.

Conclusion

Today’s users and customers are highly educated when it comes to their data and privacy. They want to know how and why a website is collecting their data and whether it’s being passed on to someone else. That in mind, brands will need to reflect this within their organization's culture and practice.

Securiti is a market leader in developing a Cookie Consent Management solution that allows companies to remain compliant with various data regulations across the world without compromising on their users’ browsing experience. Thanks to its PrivacyOps framework, cookie consent can be automated to ensure your website does not fall foul of any regulation anywhere in the world.

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