The Cookie Is Crumbling. Are You Prepared?

By dataxu InSites Archives
Cover image for  article: The Cookie Is Crumbling.  Are You Prepared?

I recently spoke with David Moore, CEO at BritePool, who used the fable of the slowly boiling frog to describe the current mindset in ad tech:  "If you drop a frog in a pot of boiling water, it will of course frantically try to clamber out.  But if you place it gently in a pot of tepid water and turn the heat on low, it will float there quite placidly.  As the water gradually heats up, the frog will sink into a tranquil stupor, exactly like one of us in a hot bath, and before long, with a smile on its face, it will unresistingly allow itself to be boiled to death."

A major threat to the ad tech ecosystem is on the horizon.  We've been using the same web technology since the '90s: HTTP cookies.  These are anonymous IDs set in a consumer's browser that enable audience targeting, data trading, measurement, attribution and frequency capping for the open web.

But major browser makers like Apple, Google and Mozilla are making changes to block the use of these cookies in ad tech.  When combining the market share of these three, the result is that more than 90 percent of the browser market would be untargetable and unmeasurable via cookies.  I've been shocked that many of the brands, agencies, publishers and tech partners I speak with are only casually acknowledging this change.

Why block cookies?

The big tech companies are blocking cookies under the guise of protecting themselves from privacy lawsuits.  Safari released Internet Tracking Prevention (ITP) 2.0 in November 2018, which aggressively blocks third-party tracking cookies in browsers when a user doesn't revisit the site. This essentially created a black hole in trackability and was the first major change in removing the use of cookies in the market.  A study of dataxu's customer conversion data shows that 30 to 40 percent of conversions come from Safari desktop or mobile browsers.

We will continue to see trackability of browsing behaviors via third-party cookies shrink until the measurable audience is negligible -- resulting in a constant cat and mouse game where we build workarounds to cookie blocking technology, which isn't the solution.  There will always be another upgrade that blocks a workaround.  For example, Apple just released news of its newest update, ITP 2.2, a much stronger version of ITP that also deletes a publisher or advertiser's first-party cookies in 24 hours.  Simply stated, if you use technology systems that rely heavily on cookies for data distribution, measurement, attribution and analytics, your business will be disrupted.

Google, Apple and Mozilla are simply responding to what consumers and regulators are demanding of them -- and consumers are right to ask for more control over their own data.  The good news is that the evidence shows consumers will respond positively to better information, controls and incentives.  In the EU, dataxu is observing a fairly steady 10 percent opt-out rate for use of data since the launch of GDPR regulations.  If we are to extrapolate this real-world data about consumers in the EU, it implies that a very healthy 90 percent of the market remains open to data use with reasonable controls in place.

If you're an agency, brand or publisher, what should you do?    

It's time to get out of your comfort zone and get into test-and-learn mode.  Start experimenting with companies that are working on solutions for consented alternative IDs, like BritePool, AirDXP, Digitrust and others.  You need to be working with technology partners who are ready to adapt to these changes in the ID environment.

Ask your partners more questions like:

  • What is your plan to adapt to a post-cookie world?
  • Is your platform configurable to work with many different identity systems or is it locked in on only one ID solution? 
  • Does your platform enable alternative ID solutions for frequency capping, analytics and forecasting?
  • Are the alternative ID analytics provided in real-time or post hoc?
  • Are modeling techniques available to fill in the gaps where measurability is impossible due to consumers who have opted-out?

The ecosystem is changing. If you're not in test-and-learn mode, you'll boil.

Image at top courtesy of dataxu.

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