How to Talk About Banning Third-Party Cookies

In spite of plenty of criticism by the IAB and others in the industry, Mozilla is moving forward with its plan to block third-party cookies and to create a “Cookie Clearinghouse” to determine which cookies will be allowed and which will be blocked. I do believe that this is a good development for our industry, however most of the discussion around banning third-party cookies has focused heavily on third-party tracking for behavioral targeting. This ignores the importance of third-party tracking for measurement and attribution across digital ecosystem silos. Without a clear path to develop an industry standard to address measurement and attribution challenges, advertisers will be the biggest losers.

Advertisers (and their agencies) use third-party cookies for media measurement, doing away with misleading panels and measuring reach, frequency, and performance at the intersection of audience, media, and creative dimensions. They also rely on them for attribution in an attempt to move beyond media mix modeling in order to measure the true impact of media investments (and ROI) on driving sales transactions (both online and offline). Both measurement and attribution must happen at the user-level to be actionable.

Banning third party cookies for measurement would give the big web/app portals a huge advantage given they already have the first-party cookie, the user data, the ad inventory, and the third-party ad server and would make it hard for advertisers to measure audiences and grow their media investment across all digital channels (display, search, video, and social).

Without over-simplifying, I see three direct implications for advertisers as they look for scale and efficiency in a world where third-party cookies don’t exist:

1. Opt-ins. Online consumers who share their personal information with a brand via a social network, a POS transaction, or lead generation programs will be matched and retargeted online via the big portals.
2. Search. Big search players (Google, Bing, and Facebook through Graph Search) will be protected because of their massive footprint of first-party cookies.
3. TV. Advertisers wanting to scale their branding and acquisition campaigns will have no other option than to “spray and pray” with more or less contextual relevance, making display advertising (except for opt-ins) a lot less attractive.

Until the industry defines and standardizes on a privacy-compliant approach to identify consumers beyond the cookie, we will continue to see one-off attempts to do it on the back of the consumer (through fingerprinting or device matching, for example), or for the benefit of one large player (opt-ins, search). Until then, large advertisers will be reluctant to significantly grow their online budgets.

Image via Flickr