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Understanding the differences between first party and third party cookies is crucial for anyone using digital marketing strategies. With privacy regulations tightening and user expectations evolving, traditional marketers must be equipped with the knowledge to leverage these tools effectively and ethically. This guide helps explain what the two types of cookies are and how they are used.

Definition and Purpose

First Party Cookies

First party cookies are created and stored by the website a user is visiting directly. Their primary purpose is to enhance the user experience by remembering user preferences, login information, tracking page visits and other settings.

Example: When you log in to an e-commerce site and it remembers your shopping cart items, that’s first party cookies at work.

Third Party Cookies

Third party cookies, on the other hand, are created by domains other than the one the user is visiting. Advertisers commonly use these cookies to track users across multiple websites, building detailed profiles for targeted advertising.

Example: If you browse for mortgage rates on one site and then see mortgage ads from other financial institutions on other sites, that’s likely thanks to third party cookies.

User Privacy and Control

First Party Cookies

First party cookies generally pose fewer privacy concerns as they are limited to interactions with a single website. Users have more control over these cookies and can easily manage them through their browser settings.

User Control: Most browsers allow users to clear cookies or block them entirely from specific sites.

Third Party Cookies

Third party cookies go far beyond that, tracking users across different sites and gathering extensive data. This has led to significant privacy concerns and regulatory scrutiny.

User Control: While users can block third party cookies through browser settings, it’s not always straightforward. Many users are unaware of these settings, which limits their control.

Data Collection and Security

First Party Cookies

First party cookies collect data related only to the user’s interaction with the specific website. This typically includes login credentials, language preferences, and actions taken on the site.

Security Measures: These cookies are generally considered secure as they cannot be accessed by other websites.

Third Party Cookies

Third party cookies collect more extensive data, including browsing habits across different websites. This data is often used for ad targeting and is shared among different entities.

Security Measures: Due to their extensive tracking capabilities, third party cookies can allow entities to build user profiles without the consent of the user. This can include sensitive issues like medical history, gender identity, sexual orientation and more. The data can then be linked to a user’s real name and made available.

Regulatory Compliance

First Party Cookies

First party cookies are less scrutinized by regulations like GDPR and CCPA due to their limited scope and direct relationship with the user. However, transparency and user consent are still necessary.

Third Party Cookies

Third party cookies face stricter regulatory oversight. GDPR and CCPA require explicit user consent for third party tracking, making compliance more complex for businesses relying on these cookies.

Example: Websites must now display cookie consent banners to comply with these regulations, specifically highlighting the use of third party cookies. In turn, online advertising platforms like Google Ads have had to redefine how they collect and utilize third party cookie data in response to increasing regulations.

Impact on User Experience

First Party Cookies

First party cookies enhance the user experience by providing personalized content on and away from the website and remembering user settings. They help create a seamless and intuitive browsing experience.

Personalization: Bank or credit union sites use these cookies to recommend financial products based on pages they’ve viewed. Marketing automation tools like Active Campaign can help tailor your email marketing messages to send to specific users based on the first party cookie data it collects from your website.

Third Party Cookies

Third party cookies contribute to personalized advertising by sharing your browsing habits with other websites you have never visited before.

Personalization: Ads tailored to user interests can be beneficial but must strike a balance to avoid being intrusive. Platforms like Google Ads and Meta Ads (Facebook) have policies in place to help advertisers avoid this.

Impact on Advertisers

First Party Cookies

Advertisers can use first party cookies to gather data directly from their own websites, aiding in targeted email marketing, personalized website experiences, and targeted advertising. However, the scope is limited to interactions within that specific domain.

Effective Use Cases: Retargeting campaigns where users receive emails from the website based on the web pages or actions they have completed.

Third Party Cookies

Third party cookies are invaluable for advertisers seeking to reach audiences beyond their website with highly targeted ads. They enable cross-site tracking and data sharing, amplifying the effectiveness of ad campaigns.

Effective Use Cases: Retargeting campaigns where users are shown ads for similar products they’ve viewed on different sites are a prime example of effective third-party cookie use.

Conclusion

Both first and third party cookies serve unique purposes and come with distinct advantages and limitations. For marketers, understanding these differences is key to leveraging them effectively while maintaining user trust and complying with regulatory requirements.

Recommendations for Marketers:

• Prioritize Transparency: Clearly inform users about cookie usage and obtain explicit consent, especially for third party cookies.
• Balance Personalization and Privacy: Use cookies to enhance user experience without compromising privacy.
• Stay Updated on Regulations: Regularly review and update cookie practices to comply with GDPR, CCPA, and other relevant laws.
• Emphasize First-Party Cookies: With growing regulations, first-party cookies continue to present reliable marketing opportunities.

By adopting these best practices, marketers can harness the power of first and third party cookies to drive engagement and achieve marketing goals while respecting user privacy.

Ready to optimize your cookie strategy? Contact LKCS’ marketing team for more information!