Internet cookies, along with other technologies, like pixels, banner ads, ad servers, ad networks, ad exchanges, and data management platforms is one of the basic technologies that enable programmatic advertising work as a viable online advertising platform.

In the absence of Internet cookies, web navigation will be close to impossible or very cumbersome at best, as they provide the incredible navigational capabilities and user experience (UX) of the web by, among other things enabling websites to collect precision data about visitors to your site. However, this article will focus on what Internet cookies are, how they work and what they do, and issues associated with Internet cookies. What this article will not do is focus on narrowing down to the peculiarities of Internet cookies and the part they play in programmatic advertising only.

What Internet Cookies Are Not

There are many wrong notions about Internet cookies and their capabilities for mischief. Internet cookies are not computer programs and do not run like programs. They lack the capability to collect your personal and private data, except for the information you agree to provide when completing an online form. Not all Internet cookies are stored in the hard disk of your computer, only persistent Internet cookies, with expiration dates. Session cookies are saved in your computer’s Random Access Memory (RAM), and this category of Internet cookies expire after a session. Internet cookies do not collect data about everything you do. They collect data that are relevant to the purpose for which they are written. For instance, this website www.retailstoremanagement.com can only retrieve cookie-specific data it has stored in your computer’s RAM and hard disk for the express purpose of enhancing your user experience (UX); it cannot retrieve information or data stored by other Internet cookies embedded in your server by other websites your web browser had visited. No more; no less.

So, What Are Internet Cookies?

They are small pieces of simple, normal text files, usually pairs of username (or User ID)  and password, also referred to as name-value pairs, mostly stored in the Random Access Memory (RAM) or the hard disk of your computer and are exchanged between your computer’s web browser and the webserver of a domain name or URL when you visit and browse a website. Internet cookies originate from the webserver of the site you visit, stored in the RAM or the hard disk of your computer, and retrieved at a later time when you browse a web site for the first time or when you return as a repeat visitor of the same site. One of the main importance of Internet cookies is that they improve your browsing experience as your web server can identify individual users and their browsing history, by using unique user ID (name-value pair) assigned to first time visitors to a site and this unique identity is used to ID first time visitors or repeat visitors, pages visited, and other actions taken.

Components of an Internet Cookie and How It works

With a browser like Microsoft Internet Explorer, you can explore all the Internet cookies stored in your computer at c:windowscookies directory. They are stored as text files and they consist of paired name-value components. In your directory (Microsoft Internet Explorer), you can view and edit all Internet cookies embedded in your web server. For instance, one of the e-commerce sites I recently visited, placed the following unique text file name in my web browser:

UserID           A7A8ZXMOU4479246F    URL (of the website)

So, each time I visit (browse) the URL in question, the webserver of the above URL is able to ID me as a repeat visitor, can remember my username, password, previous actions and decisions I made, the websites I visited after I logout and so on. With this data, I could be targeted and retargeted with banner ads.

Types of Cookies

There are two primary types of Internet cookies; namely session cookies and permanent cookies.

Session cookies are limited to session navigation on your website and they expire at the end of a session. They are stored temporarily in the RAM of your computer and not in the hard disk.

Persistent cookies have a much longer useful life and may even reside indefinitely in the web browser of your computer for weeks, months or years till they expire and are automatically deleted or when you purposefully delete them.

Persistent cookies serve two main functions; namely

1. User authentication: persistent cookies can tell when a web browser login to a website, their User ID name, and password. With these login details, as a user, you wouldn’t have to enter your user details and password each time you logon to particular websites. A typical example is demonstrated by your Amazon account when, as an account holder you logon to your amazon.com account to browse, and start your buyer journey or continue your buyer journey from an abandoned cart or make payments after a purchase.

2. Website Activity Tracking: this is the most important set of activities that Internet cookies perform, especially for e-commerce sites. Site owners or administrators can track and document:
   1. The number of new customers or browsers they had within a time bracket.
   2. The number of your current customers who paid visits to your website within the same time period?
   3. The pages your visitors browsed, and the number of items of interest clicked on, together with their dwell time on pages browsed.
   4. Purchases made and buy who.
   5. Bounce rate or cart abandonment and at what stage of the buyer journey a cart was abandoned.

With this data, precision targeting and retargeting can be much more effective.

How Internet Cookies Work

As we stated previously, cookies are simple, normal text files. In their simplest form, they consist of a username and password (name-value pair) that are either stored in your computer’s RAM or hard disk. A simplified logic of how Internet cookies work is presented below:

• Step 1:

Web browser to web server request:

When you typed the Uniform Resource Locator (URL) or web address of this website (www.retailstoremanagement.com) into your web browser, your web browser, in turn, made a request for this page to the webserver of this web address, asking for the home page of this site (www.retailstoremanagement.com). In other words, your web browser made a request to the webserver of this web site.

• Step 2:

Web browser searches for name-value pairs (Internet cookies) embedded in the web browser:

The web browser of www.retailstoremanagement.com peeps into your webserver browser and searches for any and all cookies it had previously sent to and embed in your web server. If it finds any, it will return both your request for this page together with ONLY the cookies embedded by it in your web server. However, if there are no Internet cookies, then it instantly knowns that you are a new visitor and will assign a User ID and value (usually alphanumeric) in your web server. This way, the next time you make a request, your request will be sent and tailored to your meet your browsing history.

• Step 3:

Web server executes request together with embedded Internet cookies if any:

In the third step, the webserver of www.retailstoremanagement.com sends both your request for this page and the cookie it has already embedded in your web server if any together with this website page. Other information sent to you may include the expiration date of internet cookies from the URL of this site, and the path to different pages of this website, thus enhancing your user experience (UX).

• Step 4:

If your web server contains no Internet cookies from this site address or URL, (www.retailstoremanagement.com), the server of this site knows instantly that you are a new visitor, and proceeds to assign and embed a unique name-value pair (cookie) in your browser so that when next you visit, it knows that you had previously visited www.retailstoremanagement.com, and can tell what actions you performed in previous visits and uses your browsing history of this site to tailor what information you are served.

Internet Cookies and E-commerce Sites

Internet cookies enhance the functionalities and user experience of e-commerce sites. Each time you visit an e-commerce site, the site assigns a unique name-value pair (cookie) in your web server. With this, the e-commerce site is able to monitor and store your interactions with the e-commerce site when you browse. Shopping carts and quick checkout buttons contain cookies that monitor and records what you purchased, the dates, quantities, and types of items in your shopping cart. It records when and where you abandoned your shopping cart along your customer buying journey. It is able to suggest complementarily (cross-selling) and supplementary (upselling) products to you just before or just after you complete your purchase. It is able to target and retarget you with banner ads, even when you visit another website, thus gently reminding you to return and complete purchases in your abandoned shopping carts.

Cookie Associated Challenges

In the programmatic ecosystem, cookies present many opportunities and benefits but they also have a number of issues that somewhat compromise their benefits. Three prominent challenges run thus:

• Browser sharing: at homes, in offices, and in some entertainment or business centers or public libraries, computer usage-sharing is common and this compromises the effectiveness and reliability of both web server and web browser Internet cookies. A public or university library may have a few computers for common use. A John Doe, for instance, may use one of the computers for browsing an e-commerce site. The e-commerce site generates a name-value pair (cookie) associated with the visit of John Doe. However, Jane Doe may later use the same computer to browse the same or a different website and browse different items from the same or another e-commerce site. Then a third, fourth and even more users may use the same computer to browse completely different websites. These actions pose cookie-generated data challenges for web servers as the data or information generated or collected are practical of little or no value for precision decision-making, in real-time.

• Single User, Multiple Devices: most likely you have at least two or more devices. A smartphone for your mobile use. A desktop at the office, and perhaps a laptop and tablet for use when on a trip or at such places as when you are attending church services. When each of these four devices is used to browse the same site, four different User IDs are generated for you. This distorts your browsing history and user experience as you now have four User IDs. However, in cases where you fill out online forms, complete with the same username and password, multiple device usage poses no distortion of browsing history and user experience, but this is not always the case, especially where websites have no Call-To-Action (CTA) button that requires you to provide your user details like name, email address and other routine information about yourself.

• When Your Cookies are erased: a peculiar issue with your device may necessitate the need for the erasing of all or most Internet cookies embedded in your device. This may include the purchase of a new device or the repair of your current device. Under such a circumstance, when you visit a familiar and often used website, a new User ID is assigned to your web browser as your device is treated as a new visitor, rather than a returning visitor. Also, in such a case, the challenge is resolved if you had previously registered by filling out an online form, with username and password. However, if preference details are stored in your device, your user experience is again distorted as all previously-stored preferences in your device are lost. However, if your data is stored in a central database, then this challenge is ameliorated.

In Conclusion

Cookies are generally very useful. Most of the issues web browsers are concerned about are mostly unfounded. Cookies have benefits that outweigh the negative uproar and fears about them and especially about user privacy. However, in some cases, user privacy concerns are real. This is especially true with organizations who gather and sell Internet user data to unscrupulous vendors who resell same data to marketers, who in turn may use these data for telemarketing email blasting, similar to “spray and pray” spam mails you receive unsolicited, and that have no relationship with your interest or purchase intentions.