Bye, Bye advertising cookie

After many years of debate, Google and Apple are eliminating the software marketers use to track user online activity and target ads specific to the user. This move will change the way companies have targeted audiences and generated revenue from the internet. Apple’s plan was praised by privacy advocates but raised significant criticism from app developers, advertisement firms, and some of its rivals, mainly Facebook. Google’s move to stop third-party cookie data sharing, while allowing first-party, through update to its Chrome browser will also change how ads are targeted on websites. One can see why these companies are getting ahead of any governmental regulation, that might come in this space, but in doing so one could argue that they are only shoring up their own position.

How will Google and Apple implement these changes?

Google will no longer allow other websites to collect user data by inserting 3rd party cookies (small amount of software) that tracks users' online activity. That means if a user opens up a retailer’s website and searches a pair of sneakers using Chrome, that particular retailer will not be able to access that particular user’s online activity. So, those sneaker ads won’t follow this user on other sites, like they do now. However, if that same user searched for sneakers on chrome’s search bar (i.e., Google search), Google will use its first-party cookie to continue showing ads of sneakers on its web assets. Is that fair? Or is it Google consolidating its power as an advertiser and killing competition? Google’s defense is that it’s meant to enhance privacy, while still allowing marketers to target by sharing user data in a cohort-based model built using its algorithm. That means — no more of, hey this particular user searched for sneakers and may buy one soon, but more like, here is a group of users who searched for sneakers, so feel free to advertise to them — of course, Google will charge you for that insight.

Apple will require permissions from users of its devices to grant permission before apps can track their activity — similar to how you had to permit apps to access cameras or contacts. 3rd party cookies were already banned on Safari (and Firefox). While privacy advocates largely applaud these moves, there will be a direct financial impact to advertisers and AdTech companies, and then there is the belief that this is big tech getting bigger.

When something is free you are the product

I have known that my user interaction on the internet is valuable currency. So, the consumer in me welcomes these moves to put guardrails around it. I was getting tired of seeing the same ads for a product I searched for, and most cases must have bought (or gotten over it) weeks after I first looked it up. Having read about it the granularity of data being collected was spooky. But am not alone in this. Stats from Google show that

• 72% of people feel that almost all of what they do online is being tracked by advertisers
• 81% say that the potential risks they face because of data collection outweigh the benefits

This shows the consumer trust concerns around data and privacy. To add to this there have been a number of data breaches in recent past and a growing number of data brokers who seem to benefit by trading consumer information. All this meant that something had to be done, and it’s probably a precursor to more regulations coming on this front. But then I put so much information about what I like and don’t, voluntarily, on social media sites, that I sometimes wonder what’s the point of all this privacy enablement. I also have benefited from some targeted ads in showing me products that I would have otherwise not come across.

Throwing darts in the dark

Not knowing whom to market to is disabling to a marketer like me. As I understand the plan, the basic data about a consumer visiting, knowing their preferences, and some basic demographic information will not be affected by these changes, for users coming on to my website. However, I will no longer receive granular data to develop a targeting strategy or run pop-up ads specific to a user. As per the survey from GetApp stats

· 41% of marketers believe their biggest challenge will be their inability to track the right data.

· 44% of marketers predict a need to increase their spending by 5% to 25% in order to reach the same goals as 2021.

· 23% of marketing experts plan on investing in email marketing software due to Google’s new policy.

All this means I will need to come up with ways to engage on a first-party basis with my prospective customer. I will need to tell the consumer how I would use their data and create trust such that they continue to have a first-party relationship with my website. I will have to rethink audience segmentation as the data from Google will be cohort-based. I will have to improve personalization for consumers whom I know and who have shared their emails with my site.

There is also concern that this move from Google while disadvantaging marketers, ad-tech companies, and other organizations that serve the online ad market, strengthens Google's positions in this space and directs those marketing dollars increasingly to them given their dominance on the web.

The balancing act

As someone who lives the dual lives of a consumer and marketer, I am a believer in having the right protections as it pertains to consumer data, and limit profiteering from it. That includes my ability to be prescriptive about what data I share and with whom. I would like the brands to earn my trust and connect with me and am likely to share more with those who do. I also think that the big tech platforms need to establish a level of self-governance, or risk government regulations, globally, swinging the pendulum to an extreme. But big tech should not use this as an opportunity to engage in potentially monopolistic behavior and enable alternative mechanisms so the ad ecosystem and brands have a reasonable mechanism to engage with their consumers by understanding their needs and preferences. Given the critical mass of AI innovation present within these tech firms, I am confident that the ecosystem will eventually find that balance.