The Intersection: Jan 2014

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Digital Advertising: Cookies Alone Can’t Sustain Us

by Bailey Wilkinson

Your grandmother’s chewy, melty chocolate chip cookies. Those soft, sugar cookies that seem to always appear in the office kitchen.

Many of us know what it’s like to indulge on a few too many of those tempting treats. The online advertising industry is feeling that more than ever. For years, digital marketers have been dining on the small pieces of code known as the online third-party cookie (3PC) because they fuel online behavioral targeting and digital ad measurement. Most organizations have come to depend on this technology because it gives them the ability to use mass amounts of data collected by third parties to reach a distinct online audience with a customized message. However, this diet can no longer sustain us in today’s world.

But, why can’t we only eat cookies? They taste so good!

Technology has changed drastically since we first started using cookies to target message delivery. Nearly 20% of global Internet traffic happens on mobile. Cookies aren’t as effective on mobile platforms, and we can’t ignore one-fifth of the population. Also, consumers now use their tablets, phones, laptops and even their watches as tools to complete actions online. To a marketer, cookies identify us as a new user every time we use a different device instead of showing a person’s multi-device journey to conversion. The days of using cookies alone to measure and optimize campaign performance are slipping away from us quickly.

Cookies also present data privacy concerns that policy makers and major technology companies aren’t ignoring. Decisions like the EU’s Cookie Directive, which restricts anonymous tracking, and movements like “Do Not Track” are already making it more difficult to find a world-wide audience online using only the 3PC. Apple never supported cookies from third parties in its Safari browser and Firefox promises to eventually block them by default.

As kids, adults told us that we couldn’t survive on cookies alone. Thankfully, that lesson is not lost on the ad industry and tech companies. It won’t be an easy process to find a cookie alternative, but innovation is underway and we will see which techniques succeed or fail over the next few years.

Many advertisers already bypass the crumbling cookie using fingerprint technology. Devices are identified by collecting information–including software version, time zone and even screen size–to create a unique fingerprint that doesn’t rely on the 3PC. Some websites are also developing advanced algorithms that map user profiles using trends in IP addresses and usage at certain times of day on shared Wi-Fi networks.

"Major tech companies will develop the next solution."

The big players are experimenting with account IDs. Google is in the early stages of developing their AdID program, which aims to quell privacy concerns by giving users more control over their information, while also allowing advertisers to see a unique user’s behavior across multiple devices. Microsoft says they’re working on a similar device identifier which requires user opt-in. Instead of a host of companies tracking you, Microsoft or Google would be the only ones collecting your browsing data. We’ll have to decide if that is actually a positive! As Google and Microsoft roll out their products, you can expect competitors like Facebook, Apple and Amazon to cook up their own solutions.

The ad industry is considering other alternatives. A cookie trust is one idea that brings publishers, advertisers and consumers together by creating a non-profit collection of IDs that everyone can access. They’re also taking a cue from television with a Nielsen-like format that lets users opt-in to online tracking.

These solutions may find their place, but I predict the major tech companies will develop the next solution that actually sticks. They have money to invest in finding a fix, and a lot of advertising money to lose if a better replacement isn’t in place soon. Regardless of who finds the right approach, this is an exciting time for digital advocacy because our position at the forefront of this innovation will enable us to reach the right people with more specificity and accuracy than ever before.

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Bailey Wilkinson

Production Director

615-514-2216 \ bwilkinson@voxglobal.com