This is the second segment of a two-part column. You can find the first segment here: “Limits on Behavioral Ads Could Bring Higher CPMs for Publishers“
There is an interesting twist to the way Safari currently blocks and now Firefox proposes to block third-party cookies. In an attempt to not “break the Internet” by blocking all third-party cookies, the browsers will allow third parties to set cookies on you if you had previously visited their site.
Think of it this way: If a user visits Cars.com, Cars.com can now set a cookie on the user and can now track and serve ads to that user based on their Cars.com site visit. Because of this change, larger publishers or specific endemic publishers will be at an advantage because they can essentially become online behavioral targeting companies once a user has visited their site.
So, as limits arise on behavioral ads, endemic sites (or sites with actionable user data) can essentially become ad networks. They can sell their data to data brokers, which then sells that data to other companies targeting users who are interested in purchasing cars, say. If endemic sites can’t sell their data, then the opportunity exists for the company itself to develop a platform to sell audience extension. Essentially, a marketer wanting to reach car buyers will place a buy with the endemic site to buy ads on the site — and also to buy ads on other websites via an exchange to users who had previously visited that endemic site.
This isn’t anything new: many publishers including Forbes and eBay are already selling audience extension products. The difference is that, in the absence of behavioral exchanges, these types of services will become the only way for marketers to target users based on the websites they visit — and the technology that does the tracking will have to live under the publisher’s domain.
Because of this loophole the browsers leave, once a user visits a website that also engages in online behavioral advertising, it’s back to normal for that company. While most of the advertising technology companies tracking users are sites that the user would never visit, there are some exceptions. Google, Facebook and Yahoo have a very large reach and also engage in online behavioral advertising to some extent. While these large portals currently serve ads from a different domain than the one the user visits (e.g. Google uses doubleclick.net for some of their ad serving) they could put their ad technology under the same domain (e.g. ads.google.com) and the browser would not block any tracking after the user visits their site.
For a company like Google this is a huge win, considering how many people visit Google.com and the company’s current dominance in the online advertising space. For a company like AOL, or even newspaper publishing groups who have huge reach, it’s slightly more problematic because all of their sites operate under different domains.
A Big But
Before I go any further, I should point out that while Safari already has this feature in place, it has been widely ignored by ad tech companies and publishers because only a small subset of users use Safari. But if Firefox get in on the third-party-cookie-blocking game, that will affect about 30% of the Internet audience. That’s not a size that can be ignored, but there’s also no guarantee that this feature will actually make it into the next Firefox build.
It’s also essential to point out that advertisers and advertising technology companies have claimed that when a browser defaults a user’s preferences to blocking third-party cookies, that isn’t the same as a user opting out. This leaves the door open to some advertisers using cookieless tracking technology to continue to track users. We are seeing this happen on mobile, where all iPhone users who use the built-in Safari browser have third party cookies turned off by default. Because iPhones account for such a large percentage of mobile traffic, companies have cropped up that still allow tracking despite the rejection of third-party cookies.
I think publishers have a lot to win by regaining control of the relationship between marketer and consumer that has shifted in the online world to a variety of advertising technology and data companies. Publishers should begin to think about how to take advantage of the shift that may be coming from third-party data to first-party data.
Matt Sokoloff is a 2012-2013 Reynolds Journalism Institute fellow working on a project to help local independent websites and bloggers gain additional revenue opportunities. His background is in building digital products for media organizations. Read more about his current work here and respond in the comments or to firstname.lastname@example.org or @MattSokoloff on Twitter.