The Digital Marketing Guide to Web Cookies

Analytics & Data Usability Online Advertising Article
20 mins

Love ‘em or hate ‘em, web cookies play an essential role in the machinery of digital marketing. They help us to reach the right customers, to see which parts of websites are in need of some TLC, and to gauge whether or not you really should be shelling out for that AdWords ad campaign – but what exactly are they?

In this guide we’re going to take an in-depth look at web cookies, how they work, and how you can use them to add value for yourself and your customers – all presented in a series of *ahem* bite-sized chunks.

What are website cookies and how do they work?

A web cookie (also known as an HTTP cookie) is a tiny snippet of data that gets added to the user’s web browser when they visit a certain website. The code is stored in the user’s browser over a period of time set by its creators (or until the user deletes it), and changes the way the browser interacts with certain pages. This technology is used to facilitate various functions, including:

  • Activating retargeting ads – more on that later
  • Storing stateful data (e.g. the items you’ve added to your shopping cart on an ecommerce site)
  • Retaining data previously entered into forms (used for autocomplete functions)
  • Saving user preferences
  • Authentication cookies communicate the user’s account details and log-in status to account-protected servers
  • Recording user activity

Whether directly or indirectly, all of these web cookie functions are used to facilitate digital marketing functions.

Targeted digital marketing

Web Cookies are used to deliver many types of targeted digital marketing. They store user data and behaviour information, which allows advertising services to target audience groups according to variables including:

  • Age 
  • Gender 
  • Location
  • Interests
  • Behaviour on your website
  • Behaviour on search engines
  • Behaviour on social media

(Italics: single-platform targeted advertising / Bold: retargeting)

We are now going to split the various uses of cookies in targeted digital marketing into two key groups: retargeting and single-channel targeted advertising.

Web Cookies and retargeting

We’ll start with the big one: retargeting. Remember the first time you started getting followed around the net by a product you had viewed in a previous session? You had visited its webpage once, and now here it was popping up in your email account, on YouTube, on your Skype profile sidebar, and so on. This was an example of retargeting in action, and you will most likely have encountered it on many other occasions since then.

Retargeting takes a number of forms:

Site retargeting Cookies  – a retargeting pixel (a tiny unit of code) on your webpage leaves a cookie in the user’s browser, which causes your adverts to be displayed to them when they visit certain websites within the retargeting network (e.g. Google Display Network). You can set this cookie to communicate in different ways with your advertising service, based on how the user interacted with your site. For example, if the user, looked at a certain product page before navigating away, the cookie can be set to instruct the retargeting service to serve an advert for that product specifically. This mode of site retargeting is known as personalised retargeting, or dynamic creative.

Search retargeting Cookies  – displays your adverts on third party webpages, based on the user’s previous web search activities. Search retargeting (such as the Google Display Network’s Retargeting feature) differs from search advertising (like regular Google AdWords ads), insofar as it serves adverts outside of a search results context.
Link retargeting – works by adding cookies to users’ browsers when they access a certain webpage via a certain link. Both the link and the webpage must be controlled by the advertiser, though the webpage needn’t necessarily be part of the advertiser’s main website. Using link retargeting with links posted on the brand’s social media accounts is a useful means whereby the marketer can extract and segment social media audiences for other online marketing purposes.

Display ad-based email retargeting – adds a Web cookie to the user’s Web browser when they open a marketing email (which contains a tracking pixel). This cookie is then used to trigger display ads on third party sites. Display ad-based email retargeting only works when the email is opened using a browser-based email service.

Email retargeting – the marketer can use email retargeting to send emails to anonymous web users who have visited the brand’s webpages. This type of email retargeting identifies the user’s IP address, and thereby their email address, when they visit the advertiser’s website (IP addresses and email addresses can be associated together in web cookies when the user enters their email address into a data field). This is perhaps the most controversial of retargeting’s more widely used forms.


Problems with retargeting

Retargeting techniques – and more broadly, cookies – have come under fire from privacy campaigners for using user data for marketing purposes. This is an interesting moral debate, but for today’s digital marketers, the alternatives to cookies and retargeting are few and far between.

We would argue that the answer is not to ditch these techniques, but to use them responsibly, and in such a way as to enhance the user’s online experience. Here’s how we would do exactly that.

The Chartered Institute of Marketing  published an interesting research paper, titled ‘Whose Data is it Anyway?’, which has a great deal to tell us about perceptions of data privacy issues amongst marketers and consumers. In a survey of 500 marketers, the CIM found that 41% of did not fully understand the laws and best practices surrounding the use of consumers’ personal data, and just 36% said their organisation is transparent about how it collects user data.

The message here for marketers is clear: there’s a lot we can do to improve the way we use the personal data of customers.

This Guide to Privacy and Electronic Communications Regulations from the ICO lays out exactly what you can and can’t do with cookies, user data and digital marketing communications. A great step in the right direction for any company would be to make this guide essential reading for everyone on your marketing team. You also might like to check out the ICC UK Cookie Guide  which gives in-depth guidance and advice on Cookie Law.

Knowing users’ data privacy rights isn’t just beneficial from a moral or a legal perspective – it will also help you to articulately explain to the user why your site is using cookies. The CIM’s report states that 67% of 2,245 consumers surveyed would be happy to provide more personal data if organisations were clear and transparent about how they intend to use it – which would suggest that mentioning your intent to market in your website’s cookies disclaimer, using carefully chosen language, could be of benefit to all concerned.

Single-channel targeted advertising

Cookies play a discrete but indispensable role in facilitating targeted advertising in social media. Without them, profiles could not be created, accessed or maintained; without the user profile, there is no customer data; and without the data there is no targeted marketing. To start thinking about social media profiles in these terms – as willingly surrendered caches of user data – is to gain an insight into how Facebook has built one of the biggest advertising empires in history. And it’s also slightly unnerving.

Using cookies to assess marketing performance

Cookies don’t just help marketers to achieve success; by tracking user behaviour, they help them to measure and maybe even multiply it.

Two products from the Google stable provide perhaps the most well-known examples of behaviour tracking cookie use in digital marketing: namely Google AdWords and Google Analytics, both of which offer distinct tracking features which warrant individual attention.

Conversion tracking in Google AdWords

Please don’t take this the wrong way, but if you’re using AdWords and you don’t have conversion tracking in place, you’re doing it wrong. Conversion tracking helps you to assess the effectiveness of your AdWords campaigns, ad groups, individual adverts and keywords by logging when a user who reached your site via an AdWords ad has made a purchase or completed another conversion goal, such as submitting an appointment form or signing up for a newsletter.

It works like this: the user clicks an AdWords ad linking to your site and instantly gets a tracking cookie added to their browser; they stay on your site (or return to it at a later date) and complete a conversion; they then reach a “thank you”/”purchase successful” page with a unique URL; you will previously have added a small piece of code, supplied by AdWords, to this page; the code recognises the tracking cookie in the user’s browser and logs the conversion in your AdWords account.

PPC is a science, and conversion tracking is its key analytical method. To get the most out of it, you can attribute monetary values to conversions, allowing you to see the cost per conversion of your ads. This will help you to identify the ads which are bringing in the best returns, and the ones you should cut.

Tracking user behaviour in Google Analytics

Google Analytics uses cookies to store large amounts of data on how new and returning users interact with their clients’ websites. These cookies are strikingly numerous and can remain in the user’s browser over various periods from ten minutes to two years. Here’s a full list and explanation of the cookies used.

Analytics is a complex tool which is more than deserving of an exhaustive guide of its own. For the uninitiated, here are some of the key areas in which it can provide insights:

  • Demographic info including age, gender, location and interests
  • Behaviour info (including new vs returning and session length)
  • Conversions info (can be separate to AdWords conversion goals)
  • Browser and device info
  • E-commerce data

Linking Google Analytics to your website is relatively straightforward – just set up an account and follow the instructions, which will involve adding a small piece of code to your site. Once your account is linked, you’ll be able to take a more intelligent approach to your digital marketing. You’ll be able to see how much traffic each channel (organic search, social, etc.) is driving to your site, how popular each page of the site is and much more, down to a very fine level. This is the power of cookies, enabling website owners to create a better experience for their users, and a better marketing setup for themselves.

Check out your own cookies!

Unless cookies are disabled on your browser, you should be able to view your cookies in your browser settings. If you’re anything like us, you’ll have hundreds of them!

Finding your cookies should be easy with a little research. Here are some instructions for Chrome users.

Viewing your web cookies can be a very thought-provoking experience. Each one is designed to support a certain function and to subtly colour your experience of the internet. We’re left with the impression that whilst cookies are far from perfect, we could hardly do without them.

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