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What are cookies?
Cookies are bit-sized text files that your browser creates and stores on your device as you browse the web. Every website you visit works with your browser and uses your interactions, i.e. logins, passwords, saved items, language preferences, etc. to develop corresponding cookies.
Depending on the type of cookies used, your information may be accessed by unknown parties.
- first party cookies Created by the website you visit. They are used to store the user’s information to improve the user experience. For example, when you visit entrepreneur.com, your cookie will be stored on entrepreneur.com.
- third-party cookies Created by a website other than the one you visit. These cookies are mostly called trackers or tracking codes because they monitor your activity on the web and use your information primarily for ad serving and redirection. For example, you visit entrepeneur.com, but your cookie is stored on adtarget.xyz.com.
RELATED: The Death of Third-Party Cookies: Preserving the Sweet Spot
What is cookie synchronization and how does it work?
Cookie synchronization (also known as cookie matching) to share user data between ad exchanges, supply-side platforms, demand-side platforms, and data management platforms to synchronize user profiles 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 third-party cookie tags or advertisements
- The browser sends an ad request to the demand-side platform
- The demand-side platform creates a unique user ID
- The demand-side platform redirects the ad request to the data management platform
- If the request already exists or a new cookie is created, the data management platform reads the request
- The data management platform saves and updates the user ID of the demand-side platform with the new details
- The data management platform returns the user ID to the demand-side platform
- The demand-side platform saves its own user ID, as well as the user ID of other platforms
This may seem complicated, but cookie synchronization allows ad platforms to share cookies. This process is the same for all advertising platforms in order to provide each user with a unified message. In this way, platforms can exchange user data between multiple authorized platforms and serve relevant advertisements to target audiences.
The importance of cookie synchronization
Programmatic advertising relies on data, which can be achieved through cookie synchronization. Without it, advertisers will send ads to the wrong audience and quickly drain their budgets. With the help of cookie synchronization, advertisers can place cookies in users’ browsers and track their activities on their websites. Through this process, advertisers can create unique identifiers for their target users and serve the right ads.
Advertising to people who have already purchased your product or service is pointless and wastes your advertising budget. That’s why cookie synchronization is critical to helping you identify users who have converted. This way, you can specifically target unconverted users.
Using the same data points to serve ads is ineffective and leads to poor conversion rates. 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. This also helps to retarget your ads for better conversion rates.
Related: 4 flavors of data, and the demise of cookies
Disadvantages of Cookie Sync
Synchronizing IDs across all ad platforms is not an easy task. Even with machines, it takes time. It helps advertisers deliver better ads to their target audience, but results in poor page performance due to the large number of pixels running in the background. This process also disrupts the user experience by blocking the browser’s main thread, making it difficult for the server to respond to user requests while browsing.
Sharing your personal information with a website, only to find that it is being shared with hundreds of other platforms, is cause for concern. In the event of a cyberattack or data breach, this data could be weaponized against users, with dire consequences.
The process of cookie synchronization is known only to the website owner, not the user. Without proper security measures, criminals can place ads on publishers’ websites to steal users’ information.
Ideally, cookies have no drawbacks, especially first-party cookies. However, many users dislike third-party cookies because they violate their privacy.
This shift in cookie synchronization will undoubtedly impact the online advertising industry, especially businesses that rely solely on cookies for advertising. Using first-party cookies is the best practice. If done correctly, your ads will run effectively without relying on third-party data. Best of all, you don’t have to share your data with hundreds of other platforms to target the same audience.
Related: What Google Ads Changes Businesses Need to Know About Data Privacy and Enhanced Conversions