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What Are Cookies? Effects of Cookies on Online Business

Cookies are an important part of your online business, whether you're using a website on your computer or going back to the same website on your phone.

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Cookies are used to keep track of everything you do on the web. Cookies are an important part of your internet experience, whether you use your computer to interact with a website or your phone to go back to the same website. Websites use cookies to store your information. Without them, you’d have to manually set your preferences every time you went to a website. I’ll explain what cookies are, what cookie syncing is, and why it’s important for your online business in this article.

What are cookies?

When you browse the web, your browser makes small text files called “cookies” and stores them on your device. Each website you visit works with your browser and uses your actions, such as logins, passwords, saved items, language preferences, etc., to make cookies.

Depending on the type of cookie, some people you don’t know can get to your information.

  • First-party cookies come from the website you’re on. They are used to store information about users to make their experience better. For example, when you go to entrepreneur.com, entrepreneur.com will save your cookie.
  • Cookies from sites you don’t visit are made by sites you do visit. Most of the time, these cookies are called “trackers” or “tracking codes” because they keep track of what you do on the web and mostly use your information to serve ads and retarget you. For example, you visit entrepeneur.com, but your cookie is stored on adtarget.xyz.com.

Cookies have trouble matching and syncing, which makes it hard for authorized websites and ad partners to share information. Also, because cookies are tied to a specific domain, only the owners of a website can see your preferences. Cookie syncing was made so that this problem could be fixed.

RelatedWhat is the Internet of Things (IoT)?

What Is cookie syncing and how does it work?

Cookie syncing, which is also called cookie matching, is when ad exchanges, supply-side platforms, demand-side platforms, and data-management platforms share user data so that all platforms have the same user profile.

Cookie syncing works by giving user IDs to cookies for specific users on all shared platforms.

Here’s how the process works:

  • The user goes to a website with an ad or cookie tag from a third party.
  • The browser asks the demand-side platform to show an ad.
  • The user ID is made by the demand-side platform.
  • The demand-side platform sends ad requests to platforms that handle data.
  • The data-management platforms check to see if the request already exists or if a new cookie needs to be made.
  • The data-management platforms store and add new information to the user ID of the demand-side platform.
  • The data management platform gives the demand-side platform the user ID.
  • The user ID of the demand-side platform is saved, along with the user ID of the other platform.

Cookie syncing makes it possible for different ad platforms to share cookies. This is the same process that all ad platforms use to give each user the same information. This way, platforms can share user data with other platforms that have been given permission to do so and serve relevant ads to the people they want to reach.

Importance of cookie syncing

Audience targeting

Data is used in programmatic advertising, which is made possible by cookie syncing. Without it, advertisers would send their ads to the wrong people and spend their money quickly. With cookie syncing, advertisers can drop cookies into a user’s browser and track what they do on their website. With this method, advertisers create a unique identifier for each user they want to reach, so they can show the right ad to the right person.

Exclusion of converted users

It’s a waste of money and time to show ads to people who have already bought your product or service. This is why cookie syncing is so important to help you find people who have already converted. This way, you can only target users who haven’t yet changed their minds.

Better audience segmentation

Running the same ad over and over again with the same data point is not effective and leads to low conversion. A better idea is to divide your ads into groups based on what people like. With cookie syncing, for example, you can show ads to people based on their location, interests, age, device, etc. This also helps you retarget your ads to get more people to buy from you.

Disadvantages of Cookie Syncing

High latency

It’s not easy to get IDs to match up across all ad platforms. It takes time, even with machines. It helps advertisers show better ads to the people they want to reach, but the high number of pixels running in the background slows down the page. This process also makes it hard for the server to respond to a user’s request while they are browsing because it blocks the main thread of the browser.

Poor data security

When you give your personal information to a website and then find out that it’s being sent to hundreds of other sites, that’s a cause for concern. When cyberattacks or data leaks happen, this information can be used as a weapon against users, which can have very bad results.

Increased chances of data leakage

The website owner is the only one who knows how cookie syncing works. If there isn’t enough security, criminals can put ads on the publisher’s website to get information about the users.

Cookies, especially first-party cookies, should not have any problems. But a lot of people don’t like third-party cookies because they break their privacy.

This change in how cookies are synced will definitely have an effect on the online advertising business, especially for companies that only use cookies to run ads. The best thing to do is to use first-party cookies to your advantage. If you do things right, your ads will work without using data from other sources. Most importantly, you won’t have to share your data with hundreds of other platforms to reach the same audience.

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