Understanding cookies is essential to the success of your advertising

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Cookies are used to remember everything you do on the internet. Whether interacting with a website on your computer or revisiting the same website on your phone, cookies are an integral part of your internet experience. Websites use cookies to store your information; without them, you would have to manually configure your preferences each time you visit a website. In this article, I’ll cover what cookies are, what cookie syncing is, and why it’s essential for your online business.

What are cookies ?

Cookies are binary-sized text files that your browser creates and stores on your device as you browse the web. Each website you visit works with your browser and uses your interaction, i.e. logins, passwords, saved items, language preferences, etc., to develop corresponding cookies.

Some unknown parties may access your information depending on the type of cookie used.

  • Internal cookies are created by the website you are visiting. They are used to store user information to improve user experience. For example, when you visit entrepreneur.com, your cookie will be stored on entrepreneur.com.
  • Third-party cookies are created by websites other than the ones you visit. These cookies are primarily called trackers or tracking codes because they monitor your web activity and use your information primarily for ad serving and retargeting. For example, you visit entrepeneur.com, but your cookie is stored on adtarget.xyz.com.

Cookies face a matching and synchronization challenge, which makes it difficult to share information between authorized websites and advertising partners. Also, because cookies are domain-specific, only website owners can access your preferences. Cookie synchronization was introduced to solve this problem.

Related: The disappearance of third-party cookies: keeping the sweet spot

What is cookie synchronization and how does it work?

Synchronization of cookies (also known as cookie matching) shares user data between ad exchanges, supply-side platforms, demand-side platforms and data management platforms in order to have a synchronized user profile across all platforms.

Cookie synchronization works by assigning user IDs to specific user cookies across all shared platforms.

Here is a breakdown of the process:

  • User visits a website that contains a cookie tag or third-party advertisement
  • The browser sends an ad request to the request-side platform
  • The demand-side platform creates a unique user ID
  • Demand-side platform redirects ad requests to data management platforms
  • Data management platforms read the request if it already exists or create a new cookie
  • Data management platforms record and update request-side platform user ID with new details
  • The data management platform returns the user ID to the request-side platform
  • The demand-side platform registers its user ID and, together with the user ID of the other platform

It may sound complicated, but cookie synchronization allows advertising platforms to share cookies. This process is the same for all advertising platforms in order to have uniform information for each user. In this way, platforms can exchange user data across multiple authorized platforms and deliver relevant advertisements to their target audiences.

Importance of cookie synchronization

Programmatic advertising relies on data, which is made possible by cookie synchronization. Without it, advertisers would send ads to the wrong audience and quickly exhaust their budget. Through cookie synchronization, advertisers can drop cookies in a user’s browser and track their activity on their website. With this process, advertisers create a unique identification of their target users and deliver the correct ad.

Showing ads to users who have already purchased your product or service is unnecessary and a waste of your advertising budget. This is why cookie synchronization is essential to help you identify users who have already converted. This way, you can exclusively target non-converting users.

Running ads using the same data point is inefficient and results in low conversion. A better option is to segment your ads based on specific preferences. For example, with cookie synchronization, you can serve ads to users based on their location, interests, age, device, and more. It also helps retarget your ads for better conversions.

Related: Data in 4 flavors and the disappearance of the cookie

Disadvantages of synchronizing cookies

Synchronizing IDs across all advertising platforms is not an easy task. Even with machines, it takes time. This helps advertisers serve better ads to their target audience, but it leads to poor page performance due to high number of pixels running in the background. This process also ruins the user experience by blocking the browser’s main thread, which makes it difficult for the server to fulfill the user’s request while browsing.

Sharing your personal information with one website only to find it is being shared with hundreds of other platforms is cause for concern. In the event of cyberattacks or data leaks, this data can be weaponized against users, with serious consequences.

The cookie synchronization process is known only to the website owner and not to the user. Without adequate security, criminals can serve ads on the publisher’s website to steal user information.

Ideally, cookies have no drawbacks, especially first-party cookies. However, many users do not like third-party cookies because they violate their privacy.

This change in cookie timing will undoubtedly affect the online advertising industry, especially companies that rely solely on cookies to serve advertisements. Using first-party cookies to your advantage is the best solution. Your ads will serve effectively without relying on third-party data if done correctly. More importantly, you won’t have to share your data with hundreds of other platforms to target the same audience.

Related: What Businesses Need to Know About Google Ad Changes for Data Privacy and Improved Conversions

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