Cookies or No Cookies? - That is the Question!

[Read time: 9 minutes]

Have you ever wondered how a product that you’ve been interested in just happens to appear on your social media feed? Though it seems like magic or some kind of fancy internet voodoo, it’s not. Cookies are actually to thank (or blame) for this phenomenon. 

According to a recent survey of 10,000 shoppers that we polled, approximately 60-70% of web users choose to allow websites to track their online behavior. 

This tells us that people either don’t care or don’t understand what type of data is being collected about their internet browsing behavior or they trust that the website is safe and don’t mind sharing that browsing behavior. 

But with over a quarter of Americans using ad blockers in 2020 and companies changing their policy completely like Apple, many are left to wonder just how safe cookies truly are and the potential risks involved.

Wait, What Are Cookies Exactly? 

Unlike hot and delicious cookies fresh from the oven, HTTP cookies keep track of user activity on most websites.

They’re used to remember your login information, what shoppers add to their cart, commonly searched items, and more for the purpose of personalizing your online experience. 

There are (6) six types of cookies:

 

Cookie image with title saying, "#1 First-party cookies".First-party cookies are used by the specific website (mainly publishers) to help with user settings (like “Keep me logged in”), or to to track user behavior like time on page, page views, sessions, etc



Cookie image with title saying, "#2 Third-party cookies".Third-party cookies come from third-party (as the name applies) most of which are usually advertising server platforms, for the purpose of building behavior profiles with a goal of delivering more relevant ads.



Cookie image with title saying, "#3 Session cookies".Session cookies are only used during your browsing session on a website and are deleted when the session ends. 



Persistent cookiesCookie image with title saying, "#4 Persistent cookies". stay on your computer until they expire or the user manually removes them. These cookies will stay on your computer every time you start it up and will be destroyed once the expiration date is reached, which is determined by the individual web server.

 

Cookie image with title saying, "#5 Secure cookies".Secure cookies are encrypted cookies, only used on secure HTTPS websites. These are mainly used at checkout pages and on banking sites for security reasons.



Cookie image with title saying, "#6 Flash cookies".Flash cookies, aka supercookies, are similar to regular cookies except that they’re extremely hard to find and delete (and even recreate themselves after deletion in the case of Zombie cookies).

 

The History of Cookies…

So, what data chef (pun intended) cooked up these little information-seeking pieces of code? It turns out that they were invented in 1994 by Netscape (remember them?) for the simple purpose of tracking whether or not a user had already visited Netscape’s website.

This bit of information was harmless enough, but in just two short years later the HTTP cookie was gaining paranoia among their internet users.

People began to fear for their privacy, which led to the founding of the IETF (Internet Engineering Task Force) in 1996, whose goal was to create an industry standard cookie specification. However, Netscape and Microsoft decided to simply ignore this task force.

Fast forward to 2016 (20 years later), when the GDPR (General Data Protection Regulation) was established to protect the everyman’s data and the movement of that data. Like most things in bureaucracy, this took two years to take effect...but was only in effect for the EU. The morning GDPR went into effect Google and Facebook had already faced $8.8 Billion in lawsuits.

In the United States, California signed AB-375 into law, increasing customers’ protection and privacy rights by limiting data gathering techniques such as cookies.

So where does that leave us now? We’re currently in the age where large corporations are changing their policy on cookies and the general public generally knows what cookies do. At least, they know it has something to do with privacy, right?

So, Are Cookies Safe? 

Cookies in general, are safe and make your online experience more personalized. However, because cookies are used to track your browsing behavior, this could also be a hacker’s dream (think about all of those saved passwords on your browser).

Cybercriminals could obtain sensitive information from your cookie jar such as your account information. They can hide code in stolen cookies, spread malware, and trick you into visiting malicious websites.  

People often don’t even think of that aspect of cookies, if they do at all. According to a recent survey we ran, 8% of Gen Z respondents don’t even notice when a website asks for their permission to run cookies. 

That’s the most out of any generation. Could it be because they’re just used to having their data mined?

Bar chart showing how many people click "Accept" when a website asks to use their cookies.

We also found that every generation resoundingly responded “Accept” when asked for their permission to use cookies on websites with 60% of Baby Boomers, and between 65%-68% of Gen X, Y (Millennials), and Z.

Only between 9%-15% actually Opt-Out, which goes to show that if anything takes effort in the digital age then it’s almost not worth it. Some websites put up a long loading screen when you hit, “Opt-Out”, which could deter some users.

But this new “Opt-Out” box is just the first step in eradicating cookies in general, so what happens next?

What’s Being Done to Stop Harmful Cookies? 

Many internet heavy-hitters including Google have already begun the process of preventing potential threats to your privacy. 

Google announced that they’ll be phasing out third-party cookies in Chrome by the year 2022. They join the growing list of companies that are also choosing to phase out potentially harmful third-party cookies, including Apple, Safari, and Mozilla Firefox.

There are also apps that are currently allowing you to limit trackers when browsing such as Ghostery. Some internet users also favor using “Incognito Mode”, which lets users surf the web anonymously without any of their browsing history being saved. Phone graphics showing Apple's iOS14 prompt asking if users are okay with being tracked.

The latest Apple iOS 14 update seeks to give web-goers more control over their cybersecurity. Apple is going to give users the option to opt in or out of tracking on each app that they open.

If the customer doesn’t give their consent, the app or website cannot specifically target their ads to that customer. 

Facebook’s ad-tracking pixel will also be eliminated. They called it “Limited Login Mode”. 

According to Facebook:

"Limited Login mode is based on the OpenID Connect standard, and allows users to create new accounts or access existing accounts on your app while only sharing their name, profile pic, and (optionally) email address"- Facebook.com. 

How will a Cookie-less World Affect Marketers? 

Many marketers feel that they will lose the personal relationships they’ve built with their customers by utilizing the data that cookies gather.

The lack of data tracking will most likely mean that targeting will become less relevant which could lead to more expensive and less-effective marketing campaigns. It will also lessen the customer’s personal experience online, which is often enhanced by cookies building a profile to provide the content each user is typically searching for.

Think about if you simply type “pants” into your search bar. If you’re a male, you’ll usually get served men’s pants, and based on your browsing history, you might even get a pair from your favorite brand right in the top search results.

On top of that, advertisers have the ability to serve you ads for the best deals and newest styles of pants on the market. Without cookies, these ads might not even reach you and would be lost in the ether of broad-based advertising. (think of it as a shotgun approach)

Some experts predict that total loss of personalization could cut small business sales by 60%.  And about 48% of marketers feel that their companies won’t have as much of an impact without third-party cookies. 

However, the end of third-party cookies doesn’t mean that you’ll no longer be tracked. There are still ways that advertisers can track your browsing behavior.

Some of these methods include Local Storage, IndexedDB, and any other technology that makes it possible to save your data to your device. 

Unlike persistent cookies, Local Storage is a type of web based storage that will stay on your computer with no expiration date.

To help supplement this eventual loss of data, advertisers are turning more towards buying what data they can right now from existing Data Management Platforms (DMP) who have a ton of historical user data.

Another source of data can come from publishers. For example, Amazon didn’t just buy IMDb for its information on how many Bourne Identity movies there are. The acquisition brought along a huge amount of usable data to help improve customer experiences on Amazon.

There will always be ways for companies to gather information on their customers; the landscape just may be changing from here on out.

Will This Affect Amazon?

One of the most innovative pioneers in data gathering is Amazon. Other websites are able to gather what type of things a customer may like, but Amazon has insight into exactly what they’re buying.

Jeff Bezos started this company with an ever-present obsession over the customer experience. 20 years later, it’s one of the most trusted brands in America.

And yes, Amazon absolutely collects a ton of data about their users, but it could be said that they use it to make a positive impact on the customer experience in many areas of life, such as:

  • Bringing Alexa into your home to help you create things like shopping lists, play music, and now help you turn on the lights with Alexa-enabled smart devices
  • Raising the bar on the entertainment industry in music, movies, and television, even creating their own Amazon original shows
  • Attempting to make their own phone (okay, this one didn’t work out so well)

With all that said, Amazon has a ton of data about us, but again Amazon isn’t going to use your data unscrupulously because they don’t ever want to lose trust with the everyday shopper. 

So yes, Amazon has plenty of first-party data...that’s brand safe for your brand to leverage for reaching new audiences.

When it comes to ad inventory, aka where ads get served, they happens to have one of the most visited websites in the world. In fact, 53% of shoppers, according to eMarketer, go to Amazon first to research new products. So, on their website they have ad inventory.

Amazon spider graph showing its acquisitions like Twitch and IMDb.But did you know that they’re also a publisher and own sites like IMDb.com, DPReview.com, and they even serve ads on your television via OTT?

For marketers, Amazon has great, trust-worthy, brand-safe data for you to leverage and they have plenty of ad inventory that they own. And with the frequency of their apps being used more than any other brand per day, they also have the traffic. 

If you’re thinking to yourself how do I most effectively use my marketing budget and where should I shift my demand-generation budget to? Try connecting with us here at Channel Bakers to run a pilot test. We’ve got our hands in the cookie jar.

To Wrap Up

Cookies alone are not harmful. First-party cookies that come directly from the website are actually designed to create a smooth and more personalized experience for the user.

Third-party cookies could be seen a bit riskier, but most of them are geared towards advertising. Either way, many popular browsers are doing away with these types of cookies, including the world’s largest companies like Apple, Facebook, Safari, and Mozilla Firefox. 

This move is bound to affect marketers and advertisers, making their targeting much more challenging and less granular. However, there are other sources of data that will still allow for them to cater to their unique audiences, albeit they’ll most likely be less relevant.

There will be some major changes to this landscape coming in 2021, so keep a lookout for more upcoming blog posts and the topic. 

If you want to learn more about how to navigate these changes and #GrowTheDough for your products, please don’t hesitate to contact our Client Success team at growthedough@channelbakers.com and bookmark our blog page for more real-time updates.

Reach out to learn more