In the real world, cookies are simply cooked or baked snacks.
But on the internet, cookies are small pieces of data that are used to collect information on a user’s interests, behavior, location, age, gender, and other set preferences.
These cookies are stored on the user’s device or browser and are used to remember everything the user does on the internet. This way, anytime the user revisits the website, it already knows what they want, how they want it, and when.
In this same context, cookies in programmatic advertising are no different. When a user interacts with a website, cookies are placed on their browser or device. With this cookie active, advertisers can filter their preferred information from it and target users with relevant ads based on their interests and behavior.
Think of the time you visited Nike’s website looking for a running shoe. Added it to the cart but didn't purchase it. Next thing you know — you’re on a sporting website and the same shoe pops up — that’s an internet cookie in action.
In today’s article, we’ll take a look behind the scenes on what cookie syncing is, how it works, and why it’s an important aspect of programmatic advertising. We’ll also explore some major concerns associated with cookie syncing along with some alternative approaches that advertisers and publishers can use to reach their target audience.
What is cookie syncing?
Cookie syncing (also called cookie matching) is a process in programmatic advertising used to synchronize user data across different ad networks and platforms.
This process involves exchanging cookie information about users between different ad-tech partners such as; demand-side platforms (DSPs), supply-side platforms (SSPs) and data-management platforms (DMPs).
For example, when a user visits a website, they’re prompted to accept or deny the website’s cookie policy.
When accepted, the website may place a cookie on the user’s device, which records and collects information such as browsing history, location, and other key interests.
If the website decides to serve the users with relevant ads, it may share this cookie with an advertising platform or network.
However, the problem here is this —
If the same user goes to another website having the same advertising partners and platforms, there’s no distinct way of identifying this user in a pool of other users.
Here’s where cookie syncing solves the problem by allowing different ad networks to share (or exchange) user information via the cookies matching user IDs.
Related → What Is Ad Fraud [+Types & How To Prevent It]
How does cookie syncing work?
The process generally works as follows:
- A user visits a website displaying ads and the website drops a cookie in the user’s browser or device. This cookie contains information such as the user’s interests, behavior, demographic, gender, and other important data.
- The website sends an ad request to the ad tech platform (e.g., an SSP).
- The SSP checks the directory if there’s a cookie matching the one dropped by the website on the user’s browser. If it does match, the SSP uses that cookie to relevant ads to the user.
- If the SSP does not have a matching cookie, it sends an ad request to the DSP.
- The DSP checks again if it has a matching cookie to the one dropped by the website. If it does, it uses the cookie and its information to provide relevant ads to users.
- If the DSP and SSP don’t have a matching cookie— then the cookie syncing process is initiated. Both the DSP and SSP would create a unique identifier for the users and match it accordingly.
- Overtime, the DSP and SSP can update this cookie with the more information they gather on the user’s interests and behavior.
Overall, cookie syncing works by exchanging cookie information between advertisers, publishers, SSPs, DSPs, and DMPs, through a third-party cookie servier or a server-to-server syncing.
💡Side Tip →
- The DSP is responsible for buying ad inventory on behalf of advertisers.
- The SSP is responsible for managing inventory of ad impressions on the website.
What are the types of cookie syncing?
There are two types of cookie syncing:
- Single partner cookie syncing.
- Multi-partner cookie syncing.
1. Single-partner cookie syncing
Single-partner cookie syncing (also known as server-to-server cookie syncing) is a process where only two parties exchange cookie data.
This typically involves a partnership between a website and an advertising partner in which they both synchronize their cookie data without the involvement of a third-party cookie server.
Here’s how it works:
- A website wants to display an ad to a user, so it sends a request to an ad tech platform (e.g., SSP)
- The SSP drops a cookie on the user’s browser (or reads an existing cookie) and checks if there’s a match in its directory.
- The SSP then sends a sync-pixel to the DSP.
- The DSP receives the sync-pixel and drops a cookie on the user’s browser.
- Finally, the DSP sends a request to the initial SSP’s cookie sync endpoint which passes along a unique identifier for the user.
By doing this, both platforms can share cookie data and synchronize their understanding of the user’s interests and behavior.
For the most part, this type of cookie syncing is best used when the website has a good relationship with the advertising partner. Plus, it offers some advantages such as faster syncing times, and better control over user data being shared.
However, there are some drawbacks to using the single-partner cookie technique. For instance, you have a limited number of advertising partners your website can work with as each partner would need to agree to use the same cookie. Also, if there’s a change in the advertising partner’s cookie policies, it could disrupt the entire syncing process leading to data silos, and inconsistencies.
📚Did you know → Sync-pixels (or tracking pixel) are small, transparent images used in programmatic advertising to track user behavior and aid cookie syncing between different ad platforms.
Related → What is Ad Stacking [+ How To Prevent It]
2. Multi-partner cookie syncing
Multi-partner cookie syncing is a process where multiple ad-tech partners (DSPs, ad networks, and DMPs) synchronize their cookie data through a third-party cookie server — or server-to-server cookie syncing.
Here’s how it works:
- The website sends an ad request to an ad-tech platform e.g., the SSP (supply-side platform).
- The SSP drops a cookie on the user’s browser — or reads to see if the cookie exists.
- Next, the SSP sends sync pixels to multiple DSPs such as DSP 1, DSP 2, DSP 3, and potentially others in the network.
- First, the DSP 1 receives the sync pixel and drops a cookie on the user’s browser.
- Then it redirects the user to the SSP’s cookie sync endpoint, passing along the user’s ID.
- The SSP stores the DSP 1’s user ID in its match table allowing it and the DSP1 to share cookie data.
- The SSP then redirects to the DSP 2’s cookie sync-pixel.
- The DSP 2 receives the sync pixel and drops a cookie on the user’s browser.
- DSP2 then redirects the user to the SSP's cookie sync endpoint, passing along the user's ID.
- The SSP stores DSP2's user ID in its match table enabling the SSP and DSP2 to share cookie data.
- The process is repeated for any remaining DSP partners.
- The SSP also sends sync pixels to any DMP partners, and the process is repeated with them as well.
- The ad platforms can then use this synchronized user data to serve more relevant and targeted ads to the user.
One of the advantages of multi-partner cookie syncing is that it can help ad-tech partners gain a better and comprehensive view of the user’s interests. With this, they can serve better targeted ads that are relevant to the user.
However, the sharing of data among multiple partners can raise concerns of data privacy issues. This is why websites now provide users with the option to manage their cookie preferences — and also opt-out of cookie tracking.
Related → What is A Clickjacking Attack? [+Examples + Prevention]
What are the benefits of cookie syncing?
There are several benefits to cookie syncing but the top two picks are:
- Enhanced user experience
- Improved targeting and retargeting accuracy
- Increased revenue for advertisers and publishers
1. Enhanced user experience
When users are served with more relevant ads and content, they’re less likely to feel “irritated” or bombarded with annoying or repetitive ads.
For example, say a user is browsing for interior decors for their new home. They may constantly see ads for furniture, interior decor services, and even home decor websites. While these ads may be relevant to the user’s search and intent, seeing them repeatedly may overwhelm the users.
However, with cookie syncing, advertisers can serve a mix of personalized but also diverse ads — such as DIY furniture projects or lightings. This will make the experience enjoyable and als informative for the user.
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2. Improved targeting and retargeting accuracy
By syncing cookies across multiple websites, and ad-tech platforms, publishers and advertisers have better understanding of user’s browsing behavior and interests.
For instance, let’s say a user browses an online store looking for running shoes. The store may place a cookie in the user’s browser to track their browsing activity even after they’ve left the website. Later on, the same user visits a sports news website and the website places a cookie in their browser.
Through cookie syncing, the online store and the sports new website can share the cookie to synchronize their information on the user. This new data can be used to serve relevant ads such as running shoes, jerseys, wears — or even news about upcoming races in their location.
With advertisers serving relevant ads, the effectiveness of their advertising campaigns increases. Through this, advertisers can achieve higher click-through rates, improved conversions, and a better ROI on ad spend.
Related → How Next-Generation Headless E-Commerce Helps E-commerce Businesses
What are the concerns with cookie syncing?
While the idea of cookie syncing in itself is brilliant, certain factors that facilitate its existence tend to draw some major concerns.
1. Privacy issues and possible violations
For the most part, users are highly unsettled on the system of known and unknown websites sharing their personal data without their consent. This is why almost 38% of the world’s internet users use ad blockers to remove intrusive online advertisements.
Additionally, there are concerns about information being used and shared by some companies selling users data to third-party advertisers.
For example, in late 2020, the FTC ordered nine giant tech companies, Amazon, TikTok, Discord, Reddit, Snapchat, Facebook, Twitter, YouTube, and WhatsApp to provide details on their data collection and advertising practices.
Another one that caught the news recently was two Alcohol recovery apps, Tempest and Momentum, who shared user data to third-party advertisers without their consent. All of these have made the talk of cookie syncing a major red flag for users.
2. Possibility of data breaches
Not all websites and ad-tech platforms syncing user cookies have a state-of-art security system protecting user data. As such, a data breach via system vulnerability, or external hack can result in the leakage of sensitive user information.
A popular incident was the report issued by the Irish Council for Civil Liberties (ICCL) about the large-scale data breach in the real-time bidding (RTB) industry. According to the report, user behaviors being tracked by the RTB programs eventually find their way to several companies across different countries — including countries known to violate user’s privacy.
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3. Latency
Latency refers to the time it takes in transferring data from one system to another. In cookie syncing, latency can be a major issue due to the multiple ad-tech platforms that need to be constantly synced in the background.
As data moves from one system to another, there’ll be delays and bottlenecks in the transfer that can slow down the syncing process and also affect the website’s performance.
For example, a user visits a website that places cookies in their browser. Say the user visits another website, the website would need to sync their cookie with the first website’s server to gather additional information about the user.
Now, if there are multiple partners involved in the process (such as a demand-side platform, data management platform, and a supply-side platform, the syncing process will be extremely long and slow down the entire advertising process. And when this happens, it makes it more difficult for advertisers to serve ads in a timely manner, leading to lost revenue opportunities.
Related → What Is Time To Interactive (TTI)? [+How To Improve]
4. Regulatory challenges
In recent years, there has been a growing push for increased privacy to help protect user data. For example, California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR) both include and enforce strict requirements around data collection and user consent.
A common demonstration of this act was the case between the EU’s GDPR and Criteo, a publicly traded ad-tech company. According to the findings, the EU hit Criteo with a $64.4m fine on alleged breach of its data privacy laws.
With these regulations becoming more common, advertisers and publishers may need to revisit their cookie syncing practices. Failure to do this may result in unfavorable circumstances like legal fines and repercussions.
What are the alternatives to cookie syncing?
With the EU enforcing its GDPR laws and users having their privacy concerns, cookie syncing might not be in discussion for long. Even worse, the recent Apple’s App Tracking Transparency (ATT) feature has cracked down on a lot of third-party cookies advertisers and publishers are looking to sync.
All of these have pushed ad-tech networks to look for a more suitable solution. And in this case, there are four possible alternatives that can aid in capturing quality user data.
1. Contextual targeting
Contextual targeting is a process of targeting ads based on the website’s content — rather than the user data. Think of — advertising shoes on a marathon website.
This approach can be a more privacy-friendly alternative cookie syncing as it’s not reliant on tracking the user’s behavior across multiple websites. Often, contextual targeting is best used in reaching users who are interested in a specific subject area.
Like in the example below, this New York Times article about books shows a contextual ad about reading glasses.
2. First-party data collection
This involves collecting and analyzing data directly from users without interference from or dependent on third-party sources. The data collected using this approach is more personalized, accurate and reliable than cookie syncing.
For instance, with first party data, you have more control over the data collection process and such, can ensure that it aligns with your company’s policies and government's privacy laws —-e.g., the EU’s GDPR.
Another advantage is that the data is more accurate giving you a full picture of the user’s behavior, interest, preferences and needs. With this, it’s easier to serve personalized ads to the target audience.
Should You Keep Cookie Syncing or Make The Switch?
Cookie syncing is undoubtedly one of the best things that has happened to digital advertising in the past decade. Its ability to single-handedly create an ecosystem that unifies all ad-tech platforms is a gamechanger.
However, it’s important for advertisers and publishers to recognize that it’s not without its drawbacks. One of the major concerns with cookie syncing is the potential for data leakage or misuse happening across multiple domains and platforms.
For instance, back in November of 2022, the ID5 & Sincera study evaluated 63,604 global domains and discovered that publisher partners are obtaining user data without the publisher’s consent and sharing that data with other unauthorized third-party vendors.
Due to all of these, it’s become increasingly mandatory for companies to prioritize user privacy and data security when engaging in cookie syncing or any other form of digital advertising. This can involve using tools such as consent management platforms to give users a better control over their own data.
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