Are 3rd Party Cookies An Endangered Species?

by | May 23, 2013 | Articles, Interactive Marketing, PPC

photo-1431605695381-f4a9c3cdd150May 23, 2013: Many are asking whether 3rd-party cookies, and the entire micro-industry built around them – are an endangered species. This issue is hot now because of the DNT (Do Not Track) issue, which has been raging quietly for the past several years. DNT refers to the ability of web users to opt out of having 3rd party cookies planted in their browsers by publisher websites.

The latest salvo in this conflict came from Microsoft, which created controversy when it decided that Internet Explorer 10 would have DNT activated by default. This created an outcry from advertisers who fear that this will disrupt 3rd party-based advertising.  3rd Party data is used in the most profitable part of the online ad business because it provides the ability to precisely segment an audience – even down to the individual level when it is tied in with purchase data. If 3rd party data dries up – an entire micro eco-system within the online ecosystem could vanish tomorrow.

None of this would be happening without pressure by the FTC, which has demanded that browser publishers include DNT options within their browsers (However, both Mozilla and Google are regarded as dragging their feet on the issue).Some believe that the conflict is overblown. Jonathan Meyer, at Stanford Law School’s Center For Internet and Society, feels that DNT is no threat to ad supported businesses. Meyer notes that behavioral advertising only accounts for 7% of the US online advertising market. Meyer suggests that solutions such as interest targeted advertising and requirements by advertisers to allow 3rd party advertising are legitimate alternatives.

Here’s how I see it: the entire DNT debate in as far as it concerns the user is a side issue. Only 20% of users delete cookies from their systems, and this is usually in the interests of speed, not due to privacy concerns. 90% of Firefox users have not toggled the setting. Most users don’t regard cookies as a privacy issue, especially if the data collected is personally anonymous.Instead, this has more to do with the relationship between the major search engines and the 3rd party advertisers.  Advertising is Google’s bread and butter (Google’s publisher revenue has always represented a significant part of its cash flow), Google doesn’t want to lose access to the data, and it makes sense that Microsoft would seize the pressure from Washington to open up a new attack on a front that’s always been vulnerable*.Why did Mozilla do what it did? Mozilla is a non-profit organization, one presumes they want to maintain good relations with advertisers who may be donors or technology partners that can help them keep their platform viable.

So that’s it: DNT is part of the dance between the 3rd party advertisers and the search engines, and the inconsistent, contradictory positions taken by the browser creators is more of a reflection of financial relationships between the advertisers and the ad networks than anything else.* Due to its single sign on platform, anyone signed into any google app counts as being signed into Google. This counts as a default agreement to track a user’s browsing history. Presuming that Firefox and IE also can do this, then DNT hurts the 3rd party advertisers more than the search engines, since advertisers must now rely on non-3rd party methods to reach their prospects for anyone who turns on DNT.

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