How Cookies Work and How They Are Used in Advertising

Have you ever wondered how the websites you visit seem to remember your activities? You add a product to the cart, move away to check your email, and then BAM! The same item follows you in ads. That’s simply cookies in action. We aren’t referring to the yummy type you dunk in milk. Instead, these are tiny text files that websites stash on your device. So why should you care about them? Well, they’re important because they determine how website users see ads. In this article, we’ll explore how cookies work and how they’re used to target ads.

How Do Cookies Work

A cookie is like a little sticky note that a mobile app or website gives your browser. It has name-value pairs like a label and what it says. For example, a cookie might have a “username” label and then your actual username as the value. When you visit a website, it can create a cookie, and your browser stores it on your device. Then, the next time you visit that site (or sometimes even other sites), your browser sends that sticky note (the cookie) back to the website. This is how the site remembers your past activities on the website.

Different Types of Cookies

Here are the different types of cookies that exist:

First-party cookies: Websites create these types of cookies when you visit them. First-party cookies are primarily used for things like remembering your inn or what’s in your shopping cart.
Third-party cookies: These cookies are created by a website other than the one you’re on. These are often used by advertising companies to track you across different websites.
Session cookies: These are temporary and disappear when you close your browser. Persistent cookies: These cookies stick around even after you close your browser.

How Cookies Are Used in Advertising

Image by 3D Animation Production Company from Pixabay

Let’s assume that you’re browsing online, checking out shoes on one website, then comparing prices on another, and maybe even adding a few things to your cart. Cookies allow advertisers (or, more accurately, the advertising networks they use) to track this behavior. They can see which websites you visit, what products you look at, what you search for, and even how long you stay on a page. All of this data gets tied to your cookie, which creates a sort of digital profile of your interests.

Once advertisers have this profile, they can start serving you targeted ads. Instead of seeing random ads for things you don’t care about, you start seeing ads for those shoes you were checking out or maybe related items like socks or shoe polish. This is because the advertiser’s system recognizes your cookie and says, “Hey, this person is interested in shoes!”

Sometimes, you may visit a website, look at a product, and then see ads for that exact product on other online platforms you surf for the next few days. That’s retargeting in action. It’s a very common advertising technique that uses cookies to remind you of things you’ve previously shown interest in.

Furthermore, cookies also help websites personalize your experience. They might remember your preferred language, your login details, or even what kind of content you usually enjoy. This isn’t always advertising-related, but it can contribute to a more tailored experience, which can also influence the ads you see.

Advertisers also use cookies to measure the effectiveness of their campaigns. They can track how many people click on their ads, how many people buy the product after clicking, and even how much time people spend interacting with the ad. This data helps them refine their strategies and make sure they’re spending their money wisely.

Benefits of Cookies in Ad Tech

Image by Gerd Altmann from Pixabay

Cookies offer several benefits to both advertisers and users. Here are their five core benefits:

Better Targeting: Cookies allow advertisers to reach the right people with their ads. Instead of blasting out generic messages, they can focus on users who have shown interest in their products or services. This means less wasted ad spend and a higher chance of making a sale.
Increased ROI: With cookie advertising, advertisers see a higher return on investment. The reason is because targeting is more precise. They’re not throwing money at ads that no one clicks on.
Understanding User Behavior: Cookies give advertisers insights into how users interact with their websites and ads. This data helps them understand what works, what doesn’t, and how they can improve their marketing strategies.
More Relevant Ads: In theory, targeted ads mean you see ads for things you’re interested in. This can help you uncover new products or deals you might otherwise miss.
Personalized User Experience: Cookies can contribute to a more personalized online experience, remembering your preferences and making it easier to navigate websites.

Disadvantages of Cookies in Advertising

The major challenge is data security and privacy concerns. Many users are concerned about the amount of data that’s being collected about them and how it’s being used. The idea of being tracked across multiple websites can feel invasive, and there are worries about the potential for misuse of this data.

Furthermore, sometimes retargeting can feel a little creepy. Seeing ads for a product you just looked at can make you feel like you’re being watched.

In short, cookies are the engine behind a lot of online advertising. They enable tracking, targeting, retargeting, personalization, and measurement, all of which contribute to the ads you see (and sometimes ignore) every day.

The discussion around advertising cookies has always ccenteredon finding a balance. Advertisers want to use cookies to improve their campaigns and reach their target audience. Users, on the other hand, want to maintain their privacy and control over their data. This tension is what’s driving a lot of the changes we’re seeing in the world of online advertising as regulators and tech companies try to find a solution that works for everyone.