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Kicking Third-Party Cookies To The Curb: The Fallout For The Digital Ad Industry
More and more Web browsers are blocking the use of third-party cookies by default, a development which has sparked a fierce debate in the digital ad industry.
Firefox is the latest browser to make the announcement, forcing marketers, ad technology companies and ad agencies to discover another means for reaching consumers with targeted advertising.
This controversy began with Safari, but because Safari had a mere 5% market share, it didn’t ruffle many feathers. However, over time, other browsers have followed suit including Microsoft with “Do Not Track,” and now, Firefox.
Even more troubling is that on mobile – the fastest growing Internet access method — iOS/Safari has over 60% market share, and that number is just too high to ignore. It’s time to face the facts: cookies are being kicked to the curb.
Cookies Aren’t Used For Insidious Purposes
Digital advertising is a $40 billion industry in the U.S. alone, and about half of that spend requires using third-party cookies to locate and target relevant consumers. Third-party cookies aren’t used for anything particularly insidious. They are needed to target reach and frequency for online campaigns, for example. Without cookies, ads can’t properly be tracked for frequency and could accidentally be served to the same user hundreds upon hundreds of times. Basic stuff…
Cookies are fantastic largely because users can dump them and start anew. They are also great for advertisers because they effectively track the performance and targeting, providing the basis for campaign analytics.
What Happens When The Cookie Crumbles?
So what is going to happen when cookies go away? Do you remember the maxim, “There’s no such thing as a free lunch“? There is a tacit agreement between consumers and publishers: the Internet is free but you’ve got to watch our ads (or pay for our content).
As you may imagine, no advertiser wants to deliver you ads you don’t care about, so understanding what you are interested in is the tradeoff. And, with $40 billion dollars in spend at stake, and a compound growth rate that is the envy of the rest of the economy, the ability to target and measure digital ads simply isn’t going to go away.
According to a statement from Randall Rothenberg, president and CEO of the Interactive Advertising Bureau, “Without third-party cookies, they (users) will not be able to participate in the existing industry system for privacy protection.”
The truth is that targeted advertising is too large of a business to be shut down because browsers ban third-party cookies. The end result will just put advertisers and the digital industry in a position to figure out other ways to reach consumers with relevant ad messages. In theory, if all third-party cookies were blocked, a huge portion of this industry would disappear overnight. But, that won’t happen.
Consumers Will Have Less Control With Cookie Alternatives
For a glimpse of the future, let’s look at mobile. Who was the first company to stop allowing third-party cookies? Apple, which owns Safari. Apple also blocked the Unique Identifier that enabled advertisers, vendors and others to identify mobile devices. What did Apple do next? It released its own proprietary version of the cookie: The Apple ID for Advertisers, which is persistent (unlike cookies).
As traffic continues to move away from the traditional desktop and laptops and onto tablets and other mobile devices, the industry will need to devise various ways to identify each of these devices to anonymously target relevant users. And, whatever this technology is, it will end up being adopted on “desktops” and all other devices that access the Internet.
However, there is one big difference: it will be more difficult for consumers to control. Each company will use their own method of identifying and targeting consumers, and those consumers will no longer be able to easily erase these identifiers like they can with cookies.
Achieving The Opposite Of What They Intend
While companies like Mozilla, Microsoft and Apple may think they have the user’s interest in mind when deciding to not accept third-party cookies by default, they are actually doing the opposite. A default setting says nothing about what consumers really want.
The growth of mobile computing will provide the publicity cover. With each browser setting different standards and approaches, combined with the growth of tablet and other smartphone usage, users will find themselves moving from a simple life where they knew what was going on and had control in their hands, to having their control fractured into a myriad of inconsistent choices.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.