What are cookies?
Cookies are very small text files which are downloaded to your web browser when you visit certain websites. These files are generally un-intrusive and in their simplest form contain a site name and a unique user ID. When you visit the same website again, it is able to recognise that you have been there before, and tailor the content it displays to you accordingly. For instance, log in data may be recorded in a cookie, allowing you to re-enter secure areas of the website without having to re-submit a username and password.
More sophisticated tracking cookies can also record data on the length of time you spend on certain pages, which links you tend to click, even things like your language, preferred page layout and colour scheme. In this respect, cookies are used to improve the browsing experience on frequently-visited websites.
How are they used in online advertising?
Cookies have become crucial in online advertising for a number of reasons. By tracking a user’s online surfing habits, it is possible to target them with adverts which should be more relevant to their interests; this is behaviour-based advertising. Advertising space on websites is auctioned on real-time bidding exchanges, with advertisers bidding for space not just based on the type of site, but also the type of visitor. The cookies stored in a user’s web browser provide a profile of that particular person and their browsing habits, allowing advertisers to target specific groups of people.
Website cookies are known as ‘first-party’ cookies, and the advertisers which have subsequently been invited to target the user of the site, can also download ‘third-party’ cookies to the users browser through their ads. Third-party cookies manage how ads, widgets and other elements of the web page appear, and can control how often ads are repeated for the same user, while also tracking the users browsing habits for advertising purposes. By combining data received from both types of cookie, advertisers are able to characterise and segregate the target audience in a variety of different ways.
The future for cookies
The use of third-party tracking cookies has often been a contentious point, as they can be downloaded to a browser despite the user not actually visiting the site they originate from. Mozilla announced early in 2013 that the next version of its Firefox browser will have a default setting to block third party cookies, following Apple’s Safari browser which blocks cookies from sites which have not been visited. Google’s Chrome browser still allows third party cookies by default, and although Microsoft’s Internet Explorer 10 includes a ‘do not track’ default signal, advertisers have already indicated that they may ignore the signal and continue to track via third party cookies, arguing that users retain the ability to block cookies via browser settings if they so wish. How this discussion is eventually resolved could determine to what extent cookies will be used in online advertising in the future.