Third-Party Cookies Under Scrutiny - What Marketers Should Know and Do - Core Audience

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Recently, third-party cookies, the technology advertisers use to track consumer behavior across the Internet, have come under scrutiny by consumer advocacy groups, industry influences and government bodies. One of the most notable movements, The Do-Not-Track (DNT) initiative, aims to give consumers the power to control third- party tracking via a new universally accepted technical specification for declaring and managing data relationships between consumers and Web sites.

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Third-Party Cookies Under Scrutiny - What Marketers Should Know and Do - Core Audience

  1. 1. info@coreaudience.com 877.733.2745 coreaudience.com twitter.com/core_audience facebook.com/coreaudience THIRD-PARTY COOKIES UNDER SCRUTINY: WHAT MARKETERS SHOULD KNOW AND DO INTRODUCTION Third-party cookies, the technology advertisers use to track consumer behavior across the Internet, have been the foundation of targeted advertising in the digital world. Cookie tracking technology allows both brands and publishers to precisely define their consumer audiences, learn more about them by measuring behavior, and locate their audiences on the Internet for messaging in the right context. But recently, this bedrock of the Internet advertising ecosystem is under scrutiny by consumer advocacy groups (most noticeably the Do Not Track Initiative), industry influencers and government bodies. Consequently, brands should consider what shape their marketing efforts might take if the end of the “Cookie Age” comes to pass. It’s too early to predict whether third- party cookies will go away completely. Core Audience, the industry’s first data management platform (DMP) built for brands, sees a shift away from a reliance on third-party cookies as an inevitable, and likely positive, change. As a result, brands must plan now to manage first-party data, or information you own about your audience on your own digital properties. CURRENT SITUATION The Do-Not-Track (DNT) initiative, while slow moving, aims to give consumers the power to control third- party tracking via a new universally accepted technical specification for declaring and managing data relationships between consumers and Web sites. DNT is enabled by default in the latest released version of Internet Explorer, which controls more than 50 percent of the worldwide desktop browser market. But the DNT specification is not complete, and as such, is not honored by most advertisers yet. Third-party cookies have been dealt a blow in a few other major ways. The impact of Apple’s stance on third-party cookies (Safari blocks third-party cookies by default) has been growing exponentially given the shift of consumers to mobile devices, where Apple’s products are dominant. And Mozilla, whose Firefox browser holds just under 20 percent of the worldwide desktop market, has announced that an upcoming release of its browser will contain Written by: Peter Randazzo, President and Chief Technology Officer, Core Audience
  2. 2. Between DNT, browser technologies and the shift to mobile, it seems inevitable that we will see a more restrictive and policed world for the ubiquitous third-party cookie. For now, until DNT is ratified, more than 60 percent of worldwide desktop browsers will remain third-party permissive (even after the proposed Firefox change near the end of 2013). Consequently, any marketer who relies heavily on the availability and abundance of third-party data will need to plot a new course — but can do so with careful consideration. OUR PERSPECTIVE Core Audience believes that any effort that results in data use clarity and consumer empowerment is worth consideration, and support. While third-party data – when used transparently and wisely – can provide great value, all too often that data is obtained in ways that are hidden from consumers, and then used in ways that are even more difficult to see. Consumers will continue to insist on knowing more and to be in control of data gleaned from their behavior. Shifting away from third-party cookies is not without its challenges. For example, marketing agencies use third- party cookies and data to support paid media campaigns in pursuit of clients’ goals. Third-party data is particularly useful in filling data gaps within targeted environments, such as ad exchanges, where split-second decisions are possible. In addition, third-party cookies are used by nearly all of the advertising industry to track and attribute events to the measurement of performance for campaigns. The power and value of third-party data is still strong, but as third-party cookies become less the norm, that value may be challenged. Inversely, the power and value of first-party data will increase due to the expected scarcity of information that is applicable to consumers. As a result, advertisers should begin to develop a strategy to control, protect and leverage first-party data. Scale and quality should be closely managed through efforts such as domain consolidation, value-driven tracking initiatives, and the acquisition of software platforms (such as data management platforms) to supercharge their online efforts through first-party behavioral profiling and look-alike modeling. Programmatic media buying firms – such as trading desks, which succeed through the exclusive use of third-party data providers – will be at a significant disadvantage relative to those that are tightly connected to owners of large amounts of first-party data, such as publishers and media companies. Premium inventory on large publishers and content providers (which have unique relationships with consumers) will likely increase in value and transparency. Advertisers will be able to target their audiences through this inventory, but only through channels where first-party data is available. As for tracking itself, the walls between first- and third-party relationships provide clear rules of behavior for brands seeking to tie impressions and events together. Click-based, in-channel tracking and reporting will be functional, though somewhat less precise overall. Cross channel, transactional attribution approaches that build their models by stitching together detailed events and conversions from multiple partners and properties will be compromised without trustable tracking. Fingerprinting technologies can fix that problem, but their industry-accepted use, in a new third-party cookie control mechanism enabled by default. This mechanism is being co-developed with Stanford University as a part of the institution’s Cookie Clearinghouse (CCH) initiative.
  3. 3. light of the spirit of the privacy groundswell underway, are questionable. Less transactional-based attribution approaches (like media mix and agent-based modeling) should remain unaffected. SUMMARY Core Audience sees the shift away from the reliance on third-party cookies in the Internet marketing ecosystem as an inevitable, eventual and likely positive outcome. In conjunction with their trusted partners, brands should take the time to get informed and begin to plan strategies for using first-party data. Connected marketing – where you are forming a close relationship with your audience – is best achieved through a combination of people and technologies and of art and science. As the technological ecosystem shifts, the strategies designed by smart marketers will shift along with it. This reality applies today and into the future. STAY CONNECTED Find out more at http://coreaudience.com Call us toll-free at 877.733.2745 Follow us on twitter @core_audience Become a fan at facebook.com/coreaudience

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