Cookies: Definition, Types, & Data Protection

What Are Cookies?

Cookies are small data files that a website stores in a visitor’s browser to recognize them on a subsequent visit. They ensure that:

Settings are remembered, including language selection, login status, or the shopping cart, which would otherwise be emptied with every click.

The visitor is recognized and remains logged in.

Tracking is enabled, allowing for the display of targeted advertisements.

It’s important to distinguish between different types. First-party cookies originate from the website being visited and can be used, for example, for useful features such as a shopping cart or login. Third-party cookies, as the name suggests, come from a different website context and are often used for advertising purposes and to track user behavior across multiple websites.

Since browsers are increasingly restricting third-party cookies and data protection requirements are limiting their use, they are becoming less and less important for tracking and advertising.

Where does the term “cookie” come from?

The first digital cookie was “baked” in 1994 by Netscape developer Lou Montulli. The original goal was to ensure that a shopping cart remained intact across multiple pages.

The name alludes to “Magic Cookie,” the technical term for a small data packet in programming. What began as a utility feature later became the technical backbone of digital ad tracking and various website services.

Why are cookies important?

Cookies are at the heart of two developments that affect every business with a digital presence. They form the basis of many website functions.

On the other hand, third-party cookies are increasingly being restricted, and with them, the ability to track user behavior across different websites. So anyone whose marketing is heavily reliant on this type of ad tracking must rethink their approach, shifting toward self-collected data and consent-based procedures.

Advantages

First-party cookies enable features that visitors take for granted.
They can serve as an important foundation for website features and proprietary tracking.

Challenges

Companies must adapt to the increasing restrictions on third-party cookies and focus on new approaches. In some cases, this requires a major overhaul of a website or its features.

In many cases, the use of non-essential cookies requires consent, which entails additional effort and data protection requirements. The legal landscape is constantly evolving, so a company’s cookie policy should be reviewed regularly.

Example

An online store notices that its advertising tracking is becoming less accurate because more and more browsers are blocking or restricting the third-party cookies used for this purpose.

As a result, the store sets up a newsletter mailing list and, with consent, collects first-party data that does not rely on third-party cookies.