Internet Cookies: Big Changes Are On The Way

The third-party cookie is under attack and may soon be a thing of the past. Microsoft recently confirmed that it was developing a new tracking technology to eclipse the cookie. The idea is to have a proprietary product that it controls across platforms allowing it, and other large players, to consolidate their power through newer tracking technologies.

That might sound like the natural progression of online marketing. After all, cookies have several challenges that critics use to argue for their demise. From a privacy stand-point, many privacy advocates see third-party cookies, the ones that marketers and advertisers use to follow individuals, as intrusive. And indeed, Microsoft and other players say they have protecting consumer privacy in mind with their new technology.

But more important from a marketing standpoint, cookies are remnants of technology designed to follow users across desktop browsers. They don’t transfer to mobile devices and platforms, let alone Xbox, PlayStations and connected television and the host of new ways consumers are accessing the Internet. An advertiser has no way of knowing, for example, if a sale came from an ad viewed on a cell phone or other device because of this limitation.

On the other side of the debate, advocates for cookies point out their benefits, including as an open source technology that has been a key element in “democratizing” the Web. The technology has allowed small publishers and bloggers to flourish, and has enabled marketers to anonymously and efficiently target consumers on the Internet.

Let me give you an example of how we use cookies for our clients’ campaigns to deliver the right kind of information to their potential customers. As part of a campaign, we often create lead-generating landing pages and microsites that contain useful information on an industry challenge for which a company has a range of solutions. A visitor might go to that site and search for white papers or other premium content on a specific challenge they are facing. By utilizing an anonymous cookie to that individual, we can serve up a series of banner ads that direct him or her to more information. If the person had gone to a page on pricing, a marketer can logically guess that this person is most likely a potential buyer and can deliver banners that are tailored to that stage of the buying process. Cookies enable this type of efficient and effective targeting to work.

As one observer recently wrote, “In clamoring for the demise of third-party cookies, privacy advocates may be urging the creation of a system that elevates proprietary tracking technology – technologies that may stifle competition and may be an even bigger privacy concern with personal data being concentrated in the hands of a few powerful corporations.”

We’re not quite that alarmist, but it is worth recognizing that third-party cookies are an important part of many of the targeted campaigns that Bluetext designs and implements for its clients. They allow companies to identify potential customers who have expressed an interest in their solutions through Web searches, and provide information and links tailored to those specific interests. This type of narrow-casting ad delivery makes targeting much more efficient, serves up information relevant rather than random to users, and provides needed revenue streams to web properties including news and information sites.

“In order to pay for a better and more expensive internet we need to continue to improve online advertising,” said Zach Coelius, CEO of automated ad buying company Triggit told AdAge. “There are only two ways we can do that: One is to make the ads more intrusive, bigger and in your face, or two, we can make them more targeted so that we no longer have so much waste with the wrong ads going to the wrong people.”

Why is this so important for marketers? First and foremost, it marks a potential trend by Microsoft and other large internet platform companies to control how individuals are tracked and followed across their browsing. That’s good for those large corporations, but not so beneficial for companies that will have to purchase or obtain that information from them. It reverses the path of “democratizing” the Internet that cookies allowed for in the first place.

So what do marketers need to do now that Microsoft is going to make it more difficult to identify and track potential customers through third-party cookies? Here are a few recommendations: