Imagining a World Without Cookies

After hearing of Mozilla’s move to block third-party cookies unless users opted in to them, Mike Zanies, the Interactive Advertising Bureau’s general counsel, reacted fiercely on Twitter: “This default setting would be a nuclear first strike against ad industry.”

This has been the typical stance of many in the industry. Any move to restrict cookies in any way, whether it’s through browser defaults or regulations, is painted as a mortal threat to the ad industry, even to society. And yet it’s hard to believe that a $100 billion global industry would simply fold up its tent and move onto something else if such restrictions come into place. The more likely result would be a period of turmoil, followed by adaption. There would be winners and losers.

“From a publisher perspective, it is a good thing,” said Yieldbot CEO Jonathan Mendez. “The reason third-party data exists is so I can go find a person and buy them somewhere else cheaper.” Eliminate that, he explained, and the only way to reach an audience you want is to pay more to publishers where that audience lives.

That’s why many premium publishers would like to see such restrictions come into force. The thinking is without the easy ability to match cookies to find audiences the pendulum would swing back to finding audiences the old-fashioned way, through content.

“We make money by creating great content and selling ads against it,” one publisher said, ”not by allowing audiences to be purchased around the Web at a discount.” Further, the publisher continued, the allowance of third-party cookies muddied up the trust factor on the internet, keeping advertising dollars away. “This dark ecosystem of third-party data doesn’t in any way help us.”

This is not an academic argument. In addition to the move by Mozilla, there are regulatory threats. Do Not Track legislation aimed at third parties was re-introduced into the Senate last week, leaving those in opposition to regulation feeling under attack. Some kind of restrictions on the use of cookies appears inevitable.

The industry is vulnerable on this front because it has relied for over 15 years on cookies for a whole host of purposes. Some of them have clear consumer benefit — not having to sign in each time you arrive on a site, for example — while others are clearly designed to benefit marketers rather than consumers. The data crunching by the industry’s mass of third parties to many outsiders isn’t benefiting consumers. To normal people, the notion that “better ads” are the benefit simply doesn’t justify the means. The industry has told itself for years that people want targeted ads when it happens to be what the industry wants since it has built itself off targeting.

“When we developed cookies, we completely lost the plot. We became so myopically focused on the right person that in a lot of ways we’ve been a lot less effective than we could be,” said Integral Ad Science CEO Scott Knoll. With third-party cookies available and easy to use, Knoll said advertisers stopped caring as much about their ads’ message and context. Ultimately, he said, advertisers would see better results should third-party cookies be marginalized.

And this issue, much harped on by the industry’s tech side, is simply not a major concern for marketers. A recent Association of National Advertisers survey found regulation of ad tracking hardly registering with major brands. That’s because they would simply adjust how they reached consumers. It’s not like top brands would simply stop selling things. They’d find new ways to do so.

Big publishers, as a whole, should win. But WeatherFX GM Vikram Somaya said many publishers would suffer, particularly those that have fully embraced data-driven advertising. “They’re buying intent cookies, they’re buying retail cookies,” Somaya said, referring to publishers. “They’re interacting with marketing clients and asking how they can use cookies to combine their knowledge of people on the site and the goals marketers want to hit.”

There would certainly be turmoil. The cookie is in many ways a single point of failure for any number of important cogs: analytics platforms, research firms, conversion trackers, ad verification tools, ad networks and retargeting companies. One industry leader voiced a sky-is-falling point of view: “People very literally could go out of business, especially small publishers.”

The digital advertising industry, though, has a knack for adapting to challenges thrown its way and would likely be able to weather this one as well. “Nobody in the industry is jumping up and down excited about the change,” said Knoll, who added that the challenge shouldn’t be insurmountable. “It means that we’re going to have to be innovative once again to deal with the capture of the rich data that the internet can offer– but at the same time do it in a way that doesn’t rely on this third-party cookie methodology.”

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