AdTech Insider: The new monthly series from adbank

Each month we take a look at an emerging topic in ad tech. This month, privacy & a cookie-less future.

Looking at Apple’s ITP and the prospect of a cookie-less future

Apple has been touting themselves as the leaders in digital privacy with the launch of Intelligent Tracking Prevention (ITP) for their Safari web browser. Whether Apple is actually making a difference in user data protection with the use of ITP is not what’s making headlines though: It’s what this means for the future of digital advertising. The big question on everyone’s mind is how will Google respond and how will it affect digital advertising?

Google’s Chrome browser is the most popular browser in the world with over 62% of the market and steadily climbing year over year. With GDPR, the California Consumer Privacy Act and many other countries pursuing privacy laws for their citizens — Google is under immense pressure to make a decision for how it will handle cookies & trackers on Chrome.

First: What is ITP and what does it do?

Apple launched its Intelligent Tracking Prevention (ITP) for Safari in the fall of 2017 for users of their computers, tablets and phones. They have since released several new iterations, with version 2.1 being the most recent.

ITP is a behind the scenes code in the Safari browser that automatically detects and deletes cookie trackers after 24 hours to protect user privacy. Among other things, this means that users are no longer able to be retargeted with ads after they’ve looked at a product online and their personal data is protected from malicious trackers and bad actors.

What does this mean for advertisers, users and publishers?

• Advertisers have lost an incredible amount of functionality: Their ability to retarget ads, A/B test, and verify attribution. The change will also greatly skew analytics due to new cookies being created every 24hrs if the user visits the site again.

Quickie: How does retargeting work?

For some publishers, they sell ad space based on a match between the content of their site and the thing being advertised. For example, a blog with a review of a washing machine would sell ad space for a home appliance store’s washing machines. But, most advertisers use retargeting which means the thing being advertised can have no relation to the content of the website — on that same review blog, a user who is being retargeted would see the sneakers that they had browsed a week ago.

• Users have gained privacy, and reduced their vulnerability to malicious trackers or trackers that could be exploited by bad actors.
• Publishers have gained an edge — the content of their site is of higher value to advertisers in being able to target their ads. Additionally, if a publisher has a login function, they will be able to get permission to track users without cookies being automatically deleted.

Advertisers are taking the brunt of these changes — but it has been a long time coming for user privacy to be taken seriously. It’s clear to see that all players in digital advertising are in an uncomfortable spot right now: while they know it’s the right thing to do to protect user privacy and mitigate ad fraud, there’s just too much money flowing through the current system for anyone to take the first step.

Why this isn’t an easy decision for Google:

Google and their services Analytics and AdWords are the most widely used digital advertising services in the world. Revenue from AdWords accounts for 83% of their revenue, so it’s pretty important that Google keep the advertisers happy so they can keep the ad machine running.

The decision for Apple to implement ITP was a strategic one with the intent to destabilize Google’s revenue stream and convert some users to iPhone. ITP doesn’t affect Apple’s revenue, as the bulk comes from its services like iCloud and Apple Music. Google, on the other hand, has built its empire atop collecting and reselling user data. If Google implements their own version of ITP on Chrome, it will devalue the very core of their revenue-generating services.

There is speculation of Google implementing something similar to their Android Advertising ID which allows the user to reset, wipe or disable the tracker — but the ADID is already being outsmarted and users are being tracked without their consent or knowledge (source). Even if working perfectly, the fictional Chrome ADID risks becoming just another Google service that users forget to check their privacy settings on, leading to even more data being mined than before. Not to mention: this does nothing to fight ad fraud, merely sets a roadmap of how to imitate humans with bots.

The bottom line:

If we’re honest with ourselves, this is a fight between behemoth brands much like Godzilla and any one of his enormous opponents. At times it may seem that Godzilla is fighting the same foe as the humans, but make no mistake: Godzilla doesn’t want to protect humans, he just wants to kill Mothra or whoever.

User privacy and ending ad fraud is not and never will be a priority for these big brands, they will always be focused on market share. Any solution that Google rolls out will make a big media splash but beneath the hype, user data will continue to be collected and sold to advertisers and advertisers will continue to pay for bot traffic that Google obfuscates in their enormous advertising machine.

The solution? Build a better system! To truly serve the best interest of users, advertisers and even publishers, we need to build a better advertising system from the ground up. One that safeguards against bad actors: unnecessary data mining, ad fraud, and the greedy middlemen who have been ripping off advertisers for years.