Adserving and Tracking

Why third-party cookies should be permanently blocked

Third-party advertising providers use third-party cookies to serve ads on websites. If a user visits one of these websites, it generates a third-party cookie for them. If that user then switches to a website operated by the third-party provider, or a website where that provider serves ads, the user will be recognized there. Tracking users in this way allows the third-party provider to collect data on user behavior and interests. All of the user data that is collected in the background is aggregated to build user profiles and to display ads that are targeted to users; for example, using ad serving.

In October 2019, the CJEU ruled that Internet users must actively agree to cookies being generated and stored, and that a lack of objection can no longer be taken as consent. In addition, the CJEU ruling stated that website providers must explicitly inform users about the data that is being collected. This means that the digital industry has to start looking for new tracking solutions.

Ad serving & tracking – opportunities for the future

The end to third-party cookies as a key tracking model presents a major marketing challenge for publishers. The problem is that if both targeting and targeted ad serving in the accustomed form are no longer possible, customer demand may drop considerably due to the lack of personalized advertising. To put it another way, unless suitable alternatives are found, many online marketing business models will no longer be able to operate. The good news is that alternatives to third-party cookies are already in the pipeline.

#1 Privacy Sandbox instead of cookie tracking

Reconciling advertising and privacy – by optimizing the Privacy Sandbox, Google wants to keep both users and publishers happy. Instead of setting cookies, websites will access a privacy budget that sends requests to privacy-preserving APIs, which also collect usage data but still protect user anonymity. Users will be part of an overall target group and will not be identifiable by name. However, it will still be possible to display personalized ads to users by using ad serving.

#2 Focus on first-party data

When users visit a website for the first time, a first-party cookie is set. If the users subsequently return to the website, the cookie is used to recognize them. The users cannot be tracked when visiting other websites like they can when third-party cookies are used. However, website operators can analyze the users’ usage behavior and utilize these data sources for personalized ad serving.

#3 Alternatives without cookies: Contextual targeting

Contextual targeting – also called semantic targeting – is a keyword-based targeting method that uses specific keywords to run online ads within a content-based context. If a predefined keyword appears on a website, then the corresponding ad is served. Which means that users reading an article will see relevant advertising, but no personal data will be stored.

#4 European solution: the netID login standard

Various ID providers are offering alternative solutions for tracking and targeting online users. These include the netID login alliance, the European provider that is offering users and partner websites the netID login standard free of charge as an alternative to U.S. providers. The single sign-on and identity provider is an easy and convenient way for users to identify themselves on registered partner websites. Users can visit a central privacy center to manage their authentication and consent to data usage and can decide for themselves what data they want to release. Partners, on the other hand, can use the netID identifier to display personalized ads or content – in compliance with data privacy and across all devices.