Cookies and Pixel Tags - Foundation stones of Online Advertising


What are cookies? A search would give you hundreds of articles about cookies. If we look at the trend of cookies as the search keyword, we can see that the coverage has gained interest especially in the context of privacy issues.

A cookie is essentially a small piece of code or text file (depending on the browser that you use) that is created once you visit a website. This file helps to identify you and some information about you when you visit later the same website.Real life applications of cookies could be as simple as saving your login credentials to the whole gamut of online advertising. Here is a short video that crisply explains what a cookie is in the internet world.Usually the cookies won't have any significant data that will help one identify the personal details.


Here is a cheat-sheet about how you can see all the cookies stored in various browsers. Only Internet Explorer stores cookies in text file format. Other browsers like Firefox or Chrome stores in SQLite format. So you may need SQLite Browser to view the complete details. Once again the actual storing mechanism may vary between browsers, for example Chrome stores all the cookies in one file in the profile folder.

Broadly cookies can be session cookies and persistent cookies. Session cookies are temporary ones created by your browser while you visit a website. It's life time is only when you are in the website.Persistent cookie files continues to live in the browser's memory and is activated again when you come back to the original website.A typical example could - a cart you created on the previous day in Amazon will be still active if you re-visit today.A set time period is provided for the cookie to live-in.

Another classification of cookies is first-party v/s third-party cookies.First-party cookies is generated through a direct visit - say when you visit economictimes.com. This information is often provided directly by the user - for example a registration. A third-party cookie is the one when it is created by a third-party when you visit a website. In the above example; this could be the result if the publisher is using a analytics tool or for tracking purposes or for serving ads.
Third party cookies find its major application in ad serving (online advertising). At a very high level - this is how it helps and ad serving company. Let's say a website that we visit allows third party cookies. Consider economictimes allowing a third party ad serving company to drop it's cookie to understand all the users visiting the website. Thus the ad serving company gets the basic information about you. Let's assume you were reading a personal finance related article and now you visit a mutual fund's website. Let's assume you now go to a website (say a travel blog) which is also a customer of the ad serving company. Now this enables the ad serving company to show you an ad related to mutual funds while you are reading the travel blog post.Ofcourse this is a very simple way to put it. I will deep dive into this in later posts. For a more elaborate yet easy to understand answer to this puzzle, check out this stackoverflow Q&A thread.

Here is a nice video from Wall Street Journal about how advertisers use cookies to serve ads(How Advertisers Use Internet Cookies to Track You).
Web bugs are similar to cookies; but a small block of code on a webpage that can read and put cookies when a user visits the web page. We can get information such as IP address, browser and so on. Web bugs are also known as web beacons or pixels. Pixel tags and clear GIFs are the terminologies used in the world of online advertising for these.Pixel tags can also be used for user viewability customization.Technically it's a 1X1 pixel transparent image as shown below --
<img src="test.php" alt="" width="1" height="1" />
Here is a detailed article on how to create a pixel tag and it's uses. If you really understood the capabilities of web bug; am sure it will creep you out! - Web Buggery: Analyzing Tracking Images
As a side note, you are an online marketer - here is an article about how to incorporate pixel tags and Google Analytics for Email tracking.
Now that we have understood about cookies and web bugs, let's get into what is a cookie pool? A cookie pool is nothing but a database of cookies. This is the back bone of many market players in the online advertising ecosystem (We will look into this in detail in later posts; but the most important application is search retargeting). You may ask how one can build a cookie pool. As you would have also guessed; one way is through direct implementation of web bugs; another way is when the online vendors put a pixel tag on a publisher's website like The Economic Times.You can easily understand how many folks are tracking you when you visit a website like economicstimes.com (wait for the next post on how :) ).

Now let's understand how to manage the tags from a publisher's perspective. Once an advertiser (the firm who wants to promote and sell its products online) partner with various vendors for promotion, user experience and analytics, lot's of tags get added to the web page; primarily because that's the primary mode of getting information. Managing these tags for any changes (either in the tag itself or from a web page context) manually becomes cumbersome and error-prone. That's why the whole idea of a Tag Manager or Tag Management Systems (TMS) was born. The most important USP of a tag manager is that it gives the marketer complete control of tags instead of being dependent on IT team in case of an update.With the use of a TMS, we only need to worry about few lines of code in the web page instead of a chunk of code for each vendor. The specific code snippets for each vendor (like tracking, analytics etc.) are handled directly in the tag manager platform.

Before diving into the details of how a tag manager works, let's put some more thoughts on what are the disadvantages of having too many tags in your web page. The obvious one as mentioned above is the maintenance issue. Maintenance is two-fold - we need to take care that an update in web page code is not affecting any of the tags' code and also vice versa. The second challenge is the affect on site loading time. Since each tag needs to be processed by the browser and communicated to a server, it can slow down the website thus affecting usability; more importantly the search engine ranking these days.

Managing tags in one central place while also tackling the above challenges looks promising to a marketer. Apart from the central platform that is easy to use that a TMS vendor provides, there are few other advantages. One is how the tags are getting fired. Often we can control when a tag gets fired, logic behind various tag firings and monitoring & measurement. Having said these, the main benefit for an online marketer from using a Tag Management System is the level of information one can have access to. A TMS allows transfer of wider amount of data (like more cart information, customization or transactions) between vendors in the eco system. So instead of handling everything in browser, we can handle in servers. This is called Server Direct.

When it comes to the type of TMS; they are often three based on how they are developed - client based, server-based and server-to-server. In the client side model; the entire container snippet for all tags is downloaded and cached. This is similar to adding all tags in the web page; but with additional benefits mentioned below (of course keep in mind that it doesn't solve the site load time issue though). Server based TMS tackle the site loading time challenge also in the sense that individual tags get fired according to the logic after a communication with the vendor's server. Server-to-server side technology complicates things little since communication happens better servers (TMS vendor and Publisher) rather than from browser.

Search Engine Watch had published Top 5 Reasons for using a tag management system and Top 5 reasons for not using a Tag Management Solution (TMS). Read them to get both the perspectives.

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