Understanding
Online Advertising

Frequently Asked Questions

How Does It Work?
What are cookies?

A cookie is information (a small text file) that a site saves to your web browser. Cookies make the personalization of your web experiences possible. For example, a cookie may allow sites to record your browsing activities — like what pages and content you've looked at, when you visited, and whether you clicked on an ad. Cookies can help sites remember items in your shopping cart, your log-in name, your preferences such as always showing the weather in your hometown, or your high game scores. Other cookies may be placed in your browser by third-party advertising companies to help deliver the ads you see online. These "third-party cookies" may be used to “remember” parts of your online activities in order to deliver ads tailored to your interests. For example, if you read an article online about running, a cookie may be used to note your interest in running. As you continue to surf the web, you may see coupons to save money on running shoes. Cookies are not spyware or adware, and can’t deliver viruses or run programs on your computer.

Some NAI members may use non-cookie technologies for Interest-Based Advertising. The NAI has published its Guidance on the Use of Non-Cookie Technologies for Interest-Based Advertising and is currently working with members during an implementation period to ensure that new business models and the use of non-cookie technologies are implemented by NAI members in a manner that is consistent with this Guidance. During this implementation period, however, while some members may start using non-cookie technologies for Interest-Based Advertising, the current NAI opt-out tool does not indicate when members use non-cookie technologies for Interest Based Advertising. To learn more about this Guidance, and how to opt out of non-cookie technologies, visit our FAQ’s on Non-Cookie Technologies

Who is doing IBA/CAA? Who are NAI Members?

Many of the banner ads displayed on web pages and applications are not selected and delivered by the websites or apps you visit, but by third-party advertising companies that manage and provide advertising for numerous unrelated websites and applications. Websites and applications work with third-party advertising companies because these companies can more efficiently sell advertising space. This enables websites and applications to make more revenue and continue providing free content and services. Some of these companies, which we refer to as “third-party ad companies,” join NAI to signal their adherence to privacy best practices and to provide a means for consumers to opt out of Interest-Based Advertising on the NAI website or via mobile platform settings.

What are “third-party” cookies?

The term "third-party" indicates that rather than having a direct relationship with a user, a company has a relationship with one or more of the websites that a user visits.  For example, if a user visits sportsfan.com, that website is the "first party."  If sportsfan.com partners with an advertising network, platform, or exchange to place ads, the network, platform, or exchange is the "third party."  The advertising network uses cookies when the user visits sportsfan.com to help it select and serve the best ad. These cookies are considered "third-party cookies."  First parties partner with third parties in this way because third parties have technology and expertise to enable more efficient ad placement across websites.  NAI members, working with brands, publishers and websites, use third-party cookies to make advertising more engaging and relevant to users and more valuable to publishers and advertisers.

What are web beacons (sometimes called “pixels” or “web bugs”)?

The short answer – a Web beacon enables two websites to share information. Generally, a web beacon consists of a small piece of software code, just like the other code that makes up a web page, that incorporates a graphic image on a web page or email. There may or may not be a visible graphic image associated with the web beacon, and often the image is designed to blend into the background of a web page or email. Web beacons can be used for many purposes — including site traffic reporting, unique visitor counts, advertising auditing and reporting, and personalization.

What is a "statistical identifier"?

An example of a non-cookie technology is a statistical (or probabilistic) identifier. Such an identifier is the result of a computation about a browser or device that companies rely on to tailor their online advertising. Instead of placing a cookie on a browser, and then reusing the value inside of the cookie to identify the browser, companies hope to identify a browser or device by using data about the browser or device to compute a value. Non-cookie technologies operate differently and could be used for a variety of purposes. These could include ensuring your online banking stays secure, preventing online shopping fraud, or serving you the right online advertisements.

What are Mobile Advertising Identifiers?

Most modern mobile devices (iOS 6, Android 2.3, and Windows 10 and above) provide mobile advertising identifiers. These are randomly-generated numbers that are associated with your device that often come with options to reset the identifier and opt-out of Cross-App Advertising. These identifiers have different names depending on the operating system. For example, they are called Google Advertising ID (GAID) on Android devices whereas on iOS, they are called Identifiers for Advertisers (IDFA). They are included to provide advertisers a method to identify your devices without using a permanent device identifier, like your phone’s serial number.