Being an affiliate marketer in 2023 can be a challenging (yet exciting!) job.
Life is more digital than ever before and e-commerce activity has hit all-time highs. It is extremely important to be armed with the right tools and understand technology associated with efficient affiliate marketing.
This is a complete guide that explores a very important aspect of affiliate marketing and management – cookies!
There have been some major changes in how cookies are looked at – less as a tool for convenience and more as an invasion of privacy. GDPR cookie consent requirements have flooded websites with warnings that have made regular web users more aware of the risks of being tracked online.
In this article, we discuss the two types of cookies, how cookies are employed and highlight the difference between first-party and third-party cookies. We also include insights on the future of cookies and essential information about how affiliate marketers need to shape their marketing strategy.
What are Web Cookies?
Web cookies or browser cookies are small text files a web server creates and stores on your website visitor’s mobile or computer devices. These cookies enhance the user experience by storing information about visitor preferences, login information, and other relevant settings.
Web cookies also help inform the website owner or the marketer about their users, enabling the website to personalize the user experience. For example, when a user visits your e-commerce site, you can gain insight into their shopping preferences and then provide personalized recommendations based on their browsing and buying journey.
However, there are several other reasons why web cookies are used, including:
● Session management: Web cookies can help your websites remember basic things about your customers, like their preferred language, shopping cart preferences, and other primary data.
● Personalization: Web cookies helps the gives you a clear insight about – how users interact within your website, so that you can optimize for better performance and provide your users with a smoother experience.
● Advertising: Cookies can also be used to show targeted ads to your site visitors based on their browsing history.
● Social media integration: Cookies let visitors share stuff from your website on their social media accounts, like Instagram, Facebook, or Twitter.
What are First-Party Cookies?
First-party cookies are tiny files created and stored on your website user’s devices when they visit your site. These cookies are designed to enhance user experience and are typically used for legitimate purposes, such as improving the user interface or tracking user behavior on your website.
They allow you to collect essential data such as your login information (username and password), language preference, and other basic data settings to provide a smoother user experience.
With first-party cookies, you can track and analyze customer interactions with your site, such as browsing and purchasing behavior, search queries, and demographics.
This data can then use to create personalized recommendations, promotions, and marketing campaigns that are more likely to resonate with individual customers.
In almost every way, first-party cookies are helpful for the user and the host.
Let us consider an example of first-party cookies in action – every time you visit a good e-commerce site.
First-party cookies enable the online store to remember your preferences by placing your username, password, shopping cart, shipping address, and recently viewed items.
This makes it easier for you to navigate the site and complete a purchase. Imagine having to fill out the same old details and remember your abandoned cart items every time you visit the store!
If you are a marketer and you have a CMS website or an e-commerce site, you will have access to the google analytics dashboard that tracks first-party cookies for your site. You can easily see basic data, such as the number of visitors per day, web sessions, the number of pages click during a session, demographics, and much more. However, you cannot have access to everything that your visitors do online.
Are First-Party Cookies Safe?
First-party cookies are usually safe. They are created and fully controlled by the host domain that the user intends to visit.
They do not contain sensitive data or personal information and are not used for tracking or ad targeting on third-party websites.
Most reputable websites use first-party cookies responsibly.
Users can manage and control first-party cookies by adjusting their browser settings and using extensions to block tracking.
Sources of First-Party Data Collection:
Sources of first-party data include:
- Customer feedback
- Website analytics tools
- Customer relationship management (CRM) systems
- Mobile apps
- Website or app behavior
- Webinars and events registration
- Chatbots and live chat services on websites
- Email and newsletter subscribers
- Lead generation campaigns
- Subscriptions
- Social media accounts
- Customer surveys and feedback forms
- Loyalty programs
By relying on first-party data collection, you keep your close competitors in the dark about your marketing strategies and experimentation. While third-party data can be accessed by anyone, the insights gained from your customers’ preferences and behaviors are unique to your business model.
What are Third-Party Cookies?
In contrast to first-party cookies, third-party cookies are tracking codes placed on a web visitor’s device from a domain other than the one they are visiting.
These are usually used to track the user’s online activities for advertising and get placed through scripts or tags from other domains.
This allows advertisers to track user behavior across multiple platforms to serve ads, particularly in retargeting campaigns.
If you are an advertiser, third-party cookies can give you information about your target’s profile and overall online behavior, such as, what websites they visit, their interests, and purchases they have made on multiple websites.
With this detailed data, you can easily build a solid marketing strategy and retargeting list that can be used to send ads to past visitor lists or people with similar profiles.
Let’s see third-party cookies in action.
You might have visited websites that sell something that you are looking for. After a day or two, you might magically start seeing ads for those same products on other websites that use an ad network to serve targeted ads.
What happens here is that the product page that you visited inserted a piece of script or tag provided by the ad network. When the ad code is executed in your browser, the ad network may track and place data in third-party cookies.
First-Party vs Third-Party Cookies Difference
Again, from the technical viewpoint, first-party and third-party cookies are pretty similar, and there is no intrinsic difference between them. The main difference lies in who creates and stores the cookies and the user’s web browsing context.
Let’s have a closer look at some of the essential differences between first and third-party cookies:
● Source: First-party cookies are created and set by the domain owner that the user is visiting, while the third-party cookies are created by domains or websites that are different from the one that the user is currently visiting.
● Purpose: First-party cookies are primarily used for session management, personalization, and website analytics, while third-party cookies are used for targeted advertising and tracking user behavior across multiple websites.
● Control/Blocking: Users have more control over first-party cookies as they can be easily managed and deleted through the browser settings (clear cookies and cache), while third-party cookies are often controlled by third-party service providers and are more challenging to manage. Users can block third-party cookies with ad blockers and anti-trackers up to some extent.
● Cookie Accessibility: First-party cookies are generally considered less invasive to the user’s privacy as they are only used and accessible to the domain owner you are visiting. Third-party cookies being used may not be obvious to users.
Third-Party Cookies are Crumbling!
Many consumers are becoming increasingly concerned about how companies use their data. These concerns are related to “privacy violations” resulting from the use of third-party cookies and who has access to and control over personal data.
As a result, users are now demanding full transparency regarding how websites and companies are using their personal information.
Due to the ongoing issue of third-party cookies and privacy concerns, Google announced in February 2020 that Chrome browser will phase out third-party cookies by 2022. However, the deadline has been pushed back several times and is now set for mid-2024.
Despite the delay, phasing out third-party cookies is unavoidable. Other browsers such as Firefox and Safari have already eliminated third-party cookies in response to privacy regulations.
Given the notoriety of third-party cookies, marketers who rely solely on them for their online marketing strategies are particularly affected. This includes those whose strategies involve using browsing data for targeted advertising.
The good news is that we at CPV Lab use first-party cookies to track affiliate links. If you use CPV Lab, you will continue to get your data on the effectiveness of your marketing campaigns, helping you optimize your marketing campaigns for maximum profitability even after third-party cookies will be gone.
What Does This Mean for Affiliate Marketers?
While the phase-out of third-party cookies is taking place, it means that businesses need to change their advertising and marketing strategies.
However, it’s also an opportunity to develop and manage more specific ad-targeting alternatives that comply with user privacy laws and expectations.
So what next?
Don’t worry, you won’t need to rebuild your marketing strategy from scratch. However, there are a few small things you should pay attention to.
With third-party cookies on the way out, marketers need to earn their user’s trust to get their consent. Building that trust and securing consent is pretty essential for compliance with today’s data privacy regulations, which have transformed the affiliate marketing landscape.
Utilizing first-party data is essential for affiliate marketers aiming to retain their existing users, target specific user profiles, and increase conversion and sales.
Furthermore, personalized ads created using first-party data can help the customer discover new brands and products, enhancing their overall satisfaction and experience. Although it may sound challenging, transitioning to a first-party data collection strategy, it can be the most important decision for marketers to implement now.
While many brands are shifting towards first-party data, Google is also developing a ‘privacy sandbox’ that enables companies to target users without compromising their privacy.
Although affiliate marketers are exploring alternatives to third-party cookies and are looking into Google API, this option is still new and growing.
Nevertheless, it is definitely worth keeping an eye on as it may offer promising solutions for data privacy and user tracking in the future.
Alternatives To Third-Party Cookies for Marketers
● Collecting first-party data:
Although first-party data offers clear advantages, many marketers fail to utilize it to its full potential! In addition to enhancing marketing performance and providing clear insights into the consumer buying journey, first-party data can be applied to numerous other use cases. Unlike third-party data, first-party data is more precise and dependable, making it possible to create a highly personalized user experience.
● Google Topics API (Privacy Sandbox):
Google’s Privacy Sandbox is an effort to create a tool for advertisers that enables them to target the correct audience and attribute conversions to the right campaigns while respecting user privacy. Initially, Google announced the development and testing of an interest-based targeting technology named FLoC, which was later abandoned. Currently, Google is testing new technologies, namely Topics API and FLEDGE API.
For instance, if someone frequently visits websites related to email marketing strategies, they may see ads for top email marketing services or sales funnels, without information about the specific site they visited being tracked and shared with advertisers.
● Contextual Advertising:
So far, all of the alternatives to the third-party solutions we’ve discussed rely on user data and targeting, while contextual advertising is focused on placing targeted ads in relevant locations.
For instance, placing ads for a note-taking software in a productivity tool blog post.
Contextual targeting provides more control over ad placement, ensuring that they appear on sites related to your product. However, contextual advertising may have a narrower reach, as it only targets users who are visiting sites related to your product.
To sum up…
Tracking affiliate marketing campaigns will not die with the depreciation of third party cookies. As always, everything evolves and tracking will be done with more respect to user privacy and with new technologies.