3. Safari Blocks Third-Party Cookies by Default 3 Enabling 3rd Party Cookies in iPad/iPhone/iTouch Accept only 1st Party Cookies Accept 1st& 3rd Party Cookies
7. Or is Apple Influencing the Future of Mobile Advertising? 7
Editor's Notes
David Sztela talked about the death of search, how it would be replaced by touch and voice enabled devices. I thought it would be useful to chase that thread to ground, and spend some time getting inside the head of apple, and trying to understand where they are taking taking mobile.Its fair to say that apple’s moves shape the mobile industry. They have over 50 million iPhone users today, and sold over 9 million devices in the last quarter. This is last year’s slide on their tablet device – the ipad – a device that they have sold almost 20 million of since launch. And at some level you have to wonder how satisfying it must be to be able to say, with a straight face, that you have “flummoxed” your competitors.And apples success has forced marketers to respond. It used to be that you walked into work and checked your website to make sure it was up, and the key landing pages were working. Now, you have to do that on your phone too in order to check to make sure no one accidentally put a flash banner on one of your pages.But apples impact on the industry goes well beyond flash.
One of the biggest shifts we have seen is almost invisible to users, but nonetheless important to advertisers. I’m talking of course, about our friend the cookie. There are lots of companies that are doing a lot of talking about protecting user privacy – forming standards for opting-out of third party cookies, working with politicians to shape legislation of third party cookies. Apple, on the other hand, simply made a choice for the consumer. So this is the iphone interface for enabling or disabling third party cookies, and as you can see, the option to receive cookies only from “visited” sites is the default option.In fact, they make it by far the more appealing option. After all, who would want a cookie from a site that they don’t visit? Contrast to Google – “allow local data to be set”Microsoft – low, medium, medium high, high, and very high.Instead of talking about the problem of third party cookies, Apple just decided to block them outright.
And that has big implications for advertisers. We took a look at the data, by dropping a 1st and 3rd party cookie across a number of clients and sampling the dataAnd the results were surprising.First off, it was shocking to see just how often third party cookies get blocked.Second, the blocking for Safari and iOS users was off the charts.
-Perceived a conversion rate 56% lower than windows.-Actual conversion rate 23% higher than windows.-While most paid search and analytics systems today operate off of a 1st party cookie, there are plenty of systems that track display, that, for a variety of reasons have to use a 3rd party cookie for metrics like impression attribution. And this places marketers in a challenging position. One where they may not be able to serve ads properly, or measure the results effectively.
So, why would Apple do this, if it paints their OS as one which underperforms for advertisers? Are they simply taking a stand on privacy? At some basic level, I think they are. And the reality is that third party cookies are soon to be an endangered species. If you look at the upcoming European Privacy Directive, its increasingly clear that, while politicians may not know what a third party cookie is, they recognize that it is an easy target to go after in the quest to “do something” about consumer privacy. Within the next 3-5 years, its likely that 3rd party cookies will become increasingly blocked to the point where they become simply ineffective.But Apple also may be making a bigger statement here. The ability to drop a 3rd party cookie, provides 3rd party ad networks the ability to monetize on your platform. Google, for example, doesn’t allow advertisers to cookie the search impression. Just as Facebook, doesn’t allow advertisers to cookie a “like.” iAds may be in its infancy, but Apples move to block cookies could also be a signal of how they plan to build their ad network. And when they do, one has to wonder what it will look like.
And I think we have already seen a hint of what that future will look like. For those of you who have been following the news, you know thatiPhones have been transmitting cell phone tower data to Apple. This has been widely overplayed by the media, since Apple isn’t actually tracking people’s whereabouts. But building a database of cell locations allows apple to build a variety of value added location based applications. One of which will ultimately be an ad network. The world where your phone recognizes that you are have walked by the same shoe store 5 times without transacting and offers you a promotion to buy shoes may not be as far off as we think. And when that day arrives, advertisers will need to think differently about their investments in marketing infrastructure. Specifically, cookies and behaviors may no longer be enough to target users with. Advertisers will need to think in terms of context – just as they do today with the Google display network – only location will become an ever more critical component of understanding context. And Apple isn’t alone in this Google’s Android is no different. So, as you prepare for the new world of mobile, take inventory of the assets you have for targeting users today and ask yourself if you are ready. As David said, the year of mobile was 2010. The future is now.
