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Opt-out cookies are essentially cookies used to avoid cookies. When a website creates an opt-out cookie in your browser folder, it enables you to block that same website from installing future cookies.
The opt-out cookie also tells the website not to install third-party advertiser cookies or other types of cookies on your browser. This prevents the third-party ad server from tracking your page preferences within a website or among websites within their network.
Other reasons to use opt-out cookies include telling the website that you don't want to participate in any type of online profiling or having your browsing history tracked.
Are there drawbacks to using opt-out cookies?
The drawback to using opt-out cookies is that they are site-specific. They can only block cookies from a specific server and won't block cookies from other websites. To generally block cookies from all sites or specific sites, you can manage your cookies via your browser's cookie settings.
Many of the biggest third-party ad serving companies offer opt-out cookies. You can find a full list of third-party ad networks that offer opt-out cookies on the Network Advertising Initiative (NAI) site.