Death of cookies: The people have spoken

Restrictions are coming to how advertisers track consumers online, and the industry can either on-board — or get left behind.

Industries have been built around the ability to track consumers online to serve them more targeted marketing messages.

Online tracking has worked for the parties involved in the transaction. Brands can more surgically target consumers and be confident that they’re wasting less budget, and publishers can sell their inventory at higher CPMs.

Around this symbiotic relationship, an ecosystem of ad tech providers blossomed and thrived to facilitate data-driven transactions. No one benefitted more than Facebook and Google, who became so dominant with their massive audiences that they were crowned advertising’s duopoly.

But one constituent has left out of this equation: people. And now, cries for online privacy are getting louder. The government is stepping in. And, most imminently, Google and Apple, which will still be able to target massive audiences within their own ecosystems, have decided privacy is in their interest, too.

We’re just weeks (days?) away from the release of Apple’s iOS 14.5, which will require iPhone users to opt in to being tracked across apps by advertisers. By early next year, Google will have ended support for third-party cookies and other identifiers on Chrome, ending similar tracking on the dominant web browser.

So what is an industry built around a process that’s soon to be defunct, and already illegal in certain markets (see: GDPR), to do?

The predominant response has been to hack it. No more cookies? Unified ID 2.0, the most prominent industry solution, can preserve targeting by collecting hashed emails through a single sign-on opt-in. No more IDFA? Mobile app marketing companies like Adjust have already been caught trying to circumvent opt-ins with device fingerprinting, which stores user identities on a server instead of a user’s browser.

The changes are even making marketers sweat. The Wall Street Journal reported that Procter & Gamble was involved in a China-backed effort to hack around Apple’s mobile ID restrictions with device fingerprinting, as were other industry players including Nielsen, Deloitte and PricewaterhouseCoopers, per AdExchanger.

I get the urgency. Not only are there billions of dollars at stake, but the entire ad tech industry is built around enabling online tracking, not to mention the many media owners who are likely to see their revenues drop. Those that can’t pivot may not make it. Meanwhile, Google, Facebook, Amazon and other “walled garden” platforms that are able to target their own massive audiences will just get stronger.

But there’s a reason people are pushing back against online tracking. It’s created such a poor experience online that consumers are tuning out of advertising or blocking it altogether. People are willing to spend money to avoid advertising. So advertising that doesn’t put the consumer at the center no longer works.

And it’s not like brands can’t still use data in innovative ways to target consumers. Just this week, contextual targeting platform GumGum raised $75 million from Goldman Sachs, and Iris.tv, which operates a contextual video marketplace, raised $18 million in a round led by Intel Capital.

The “death of the cookie” will have ripple effects across the industry, and there will be casualties. But there will also be new solutions that crop up, and they may be more viable for the industry long-term, because the fact remains that consumers have spoken up. 

It’s time for the industry to listen.

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