November 11, 2013

The Cookie Crumbles. Now What?

The Cookie Crumbles. Now What?

By Rob Norman, Chief Digital Officer, GroupM Global

 November 11, 2013 

A free and content rich internet requires the revenue provided by advertising. There is almost no other funding mechanism for many publishers and subscriptions automatically restrict access. Advertising needs to be effective and effectiveness is dependent in part on the application of data and the use of cookies to select the right inventory from a limitless sea of impressions. From the perspective of the advertiser the value of the cookie is clear. It efficiently, if imperfectly, translates consumers browsing behavior into interests and intent thereby increasing the precision of targeting.


Advertisers have never wanted or needed personally identifiable information; we harvest only anonymous attributes that can be aggregated into substantial audiences. 


The consumer does not necessarily understand or appreciate the covert contract funds the content which interests them. Instead the privacy and data usage debate is inflamed by Prism and the NSA's monitoring of German Chancellor Angela Merkel's phone calls that are unconnected with the internet economy yet acts as a lightning rod for privacy hawks.


The communications industry has a communication problem; specifically how to educate the consumer about the advantages and risks of sharing data and the use of cookies and their successors in respect of online marketing.



As we stand today it seems that the days of tracking browsing behavior and the collection and application of cookie data are numbered. The cookie is increasingly criticized for being too invasive. Privacy advocates want to limit the data as much as possible. Washington and Brussels want to legislate because that's what legislators do. 



The purpose of legislation is to protect consumers from actual harm. It is impossible to protect them from imagined harm. The test of harm is that 'Injury must be substantial, not outweighed by benefits', so it is difficult to blame advertising for anything worse than making people feel a little creepy on occasion given that the free internet is the benefit. 



The buy-side of our industry (advertisers and their agencies) maintain that self-regulation is the best path forward. The AdChoices icon program introduced in 2011 is served on more than one trillion advertising impressions per month in the US and Canada and is starting to take hold in Europe.


There is compelling evidence that the initiative is working: millions of people click on the icon, and millions drill down (the AdChoices site gets 40 million visits a month) — and more than a million users have opted out from data collection. Users are taking advantage of the transparency and choice offered by the program.


Similarly, some 100 million people have used Acxiom's and one million have either amended their data or opted out. There is a massive difference between a default setting of opt-in with the choice of opt-out and the inverse of that choice.



A sub-set of the sell side of the industry is increasingly collecting data at the USER ID level as it allows for measurement and attribution across devices and for targeted advertising as well the real consumer benefit of contiguous across device experiences.


This sub-set is dominated by the internet giants who are providers of services and aggregators, rather than originators, of content. The services point is key to understanding this issue. The terms of service of many of the internet giants include the acceptance of data collection policies including the right to targeting as a condition of using utilities as varied as G Mail and iTunes.


Few people signed up for iTunes with the hope of receiving better targeted advertising. This is an overt contract but one buried deep in terms and conditions that are more easily accepted than read, and some view this is less privacy friendly than the cookie. This 'first party' data set is known as unified IDs.


For advertisers who require visibility of the whole internet a mechanism will be required to unify these unified IDs if the efficiency of advertising, the appropriate cross-channel allocation of dollars and the funding of free content is to be maintained.


As the regulators consider their next step they might conjoin a discussion of the unbundling of privacy policies with the future of the cookie, the collection of location data and the application of device IDs for mobile, where, in the app ecosystem, the cookie is not applicable. If they do so they will properly debate the interests of the consumer, all publishers and the advertisers in pursuit of a balanced outcome.


In the end consumer data belongs to the consumer. Advertisers and publishers need permission to use it responsibly; the consumer has a right to deny us and / or demand transparency. Users should know what data we are collecting, and when and why. It should be their choice, not a condition of service or a default setting at the browser or device level.


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