The Death of the Cookie
Why it's being put out to pasture and what the internet will look like without it.
Being the vulnerable little media drone that I am, my first reaction to the news that the cookie was going to be put out to pasture was concern. How, exactly, would this not prove calamitous for publishers who rely on programmatic advertising to make up a large part of their revenue? After a good deal of reading, it is clear that there isn’t exactly one answer to that question. But before the working alternatives to the cookie can even be gotten to, it is worth first understanding what exactly a cookie is, why it has fallen out of favor, and how exactly a technology as deeply embedded in how we navigate the internet can be killed.
Are Cookies Crumbling Our Privacy? We Asked an Expert to Find Out — Digital Trends
The cookie was invented in 1994 by a guy named Lou Montulli. A founding engineer at Netscape, Lou developed the cookie to solve a pretty fundamental problem for online businesses; tracking customers. The small text files he created allowed online retailers to do things like saving your shopping cart if you closed out of a window, made it so you didn’t have to log in every time you went back to a site, and allowed sites to track the number of times they showed users ads.
The data the cookie produced allowed marketers and advertisers to target specific types of users, and get much more accurate reporting on the performance of their advertising spends. Instead of negotiating the price of an ad page with a Condé Nast sales exec over a boozy lunch, a marketer could bid on putting their ad in front of users that fit the exact profile of who they were looking to target — all across the web.
Ever since its early days, the cookie caused concern. Do we really want technology tracking our every move across the web? The consensus has leaned more and more towards no. Major web browsers like Safari and Firefox have made them opt-in only for users. The shift in standards along with big legislative efforts like Europes GDPR and California’s CPCA have put pressure on Google to announce that Chrome would stop supporting cookies sometime in 2022. Given Chrome’s power, 5 billion installs, or roughly 53% of the worldwide internet browser market, it spells the end of the technology.
No one should think that Google is doing this out of the kindness of their heart. First, doing this relieves some of the pressure legislators and activists have put on the tech giant. And second, it makes their own advertising products that much more attractive. When third-party data is out of the equation, the heaps of information that Google has gathered from its suite of services and tools will be an even more attractive option for marketers looking to reach the right audience.
Here is how the internet is trying to adjust.
Big publishers like the New York Times and Vox are already well into developing or have already developed a way of organizing content that allows them to sell ad space to advertisers based on both topics of interest (car ads by car articles), and by intent (inspiration, purchasing, learning, etc.). Early results show that not only is this method as effective as using cookies — it’s more effective. In some cases by 10 times.
This only really works for big publishers with millions of users. Mid-sized and small publishers will have to rely on licensing this kind of technology.
Advertisers and Marketers
Rather than using the easy reporting that cookies provided, marketers may have to revert back to using things like surveys, panels, and publisher-provided insights in order to get a finger on the pulse of their target audience.
Additionally, they’ll have to manage the potentially difficult situation where buying across multiple channels is a lot more of a time-intensive process.
Where there are problems, there are opportunities. It may be a tough nut to crack, but ad tech companies are working to retool their tech to identify users with logins across different publishers as a way of sharing data. It’s a difficult ask because it would require competing publishers to share information with one another.
IAB is rushing to create a set of rules and standards to head off the difficulty advertisers and marketers may face.
Publishers and marketers might be a hell of a lot better off if instead of bidding for ad space via an exchange like Google Ad Manager, marketers bought display ads directly from publishers. That’s more money in the pockets of publishers to fund journalism, and by the telling here in this story about Danish publisher NPO, it might be better for the agencies, too.
The New Dot Com bubble Is Here: It’s Called Online Advertising — The Correspondant
Underpinning all of this is a kind of weird voodoo that, by some accounts, just doesn’t match up. Does advertising really deliver the value that brands, agencies, publishers, and marketers swear it does? Is behavior really being influenced or is an entire industry built up around a bunch of middlemen? While it’s tough to think that advertising as a whole isn’t effective — the article here lays out why the business of digital advertising will always be ripe for disruption whatever the fate of the cookie may be.