There is a lot of speculation happening based on several adtech developments and heightened privacy concerns that say cookies are on their way out as a staple for tracking users’ web activity.
According survey of US brand-side digital marketing executives by Viant, more than 60% of respondents believe they will no longer need to rely on cookies for the majority of their digital marketing within the next two years.
For more than two decades cookies have had a monopoly on user tracking. That reign hasn’t been without hurdles, detractors and debates. Still, cookies were largely embraced as an imperfect but necessary tracking method. But now as all the leading browsers and regulators in Europe crack down on consumers’ privacy concerns, the extinction of cookies may be near.
Ad Blocking and Browsers
Among the leading reasons are privacy concerns. That has sparked movement by consumers to install ad blockers. A survey published by Interactive Advertising Bureau in 2016 found 26 percent of web users had installed ad-blockers on their computers. And 15 percent had ad-blockers on their smartphones.
Last year, Apple’s Safari browser made tracking users more difficult by deleting third-party cookies after 24 hours. Safari is responsible for less than 20% of internet traffic on desktop/laptop and mobile, according to Net Market Share, And Google has recently added ad blocking to its Chrome browser, which is the most popular browser and is used for 56 percent of all accessed pages, according to Statcounter.
To deal with privacy concerns the European Union is about to implement strict new laws. The EU’s General Data Protection Regulation (GDPR), which goes into effect in May, states that people’s personal data can only be used if individuals give companies permission. The browser must inform users of its cookie use. This includes both privacy setting options and risks. And it must have a feature that requires browser users to select a cookie setting before continuing.
One of the most impacted areas for online marketers will be attribution, which determines which marketing channel gets credit for a sale. Attribution is also influential in determining marketing budgets. Many companies still rely on “last touch attribution,” which assigns credit for the sale to the last cookie at the time of purchase. Still, even with sophisticated data matching, it is difficult to connect all the different customer screen touch points.
eMarketer estimates that more than six in 10 US companies will use multichannel attribution in 2018, and Econsultancy estimates 37% of in-house marketers worldwide used marketing attribution in 2017, very few marketers are using more advanced attribution practices. A May 2017 survey conducted by the DMA and marketing research firm Demand Metric found just 13% of US marketers reported using advanced attribution for marketing.
Cookies are an imperfect solution for attribution. However, marketers will eventually need to implement other tracking methods to determine which marketing channels create the best ROI.
If cookies are not delivering the effectiveness advertisers need and may fade away, what will replace them? It seems the focus for alternative tracking methods has shifted to mobile tracking. This change takes place with the rapid growth of mobile device use.
- Client/Device Identifier – Advertisers can track mobile users by capturing the device’s unique identifier, which is either set or made available by the operating system to mobile apps. Google’s Advertising ID and Apple’s Identifier for Advertisers (IDFA) are two examples of this. A similar method is collecting the device’s Open Device Identification Number (ODIN) from the device’s WiFi MAC address.
- Universal Login Tracking – Universal logins allow users to log in to different sites and apps with an existing set of credentials, instead of creating a new username and password for that particular site or app.
- Device Fingerprint – It uses an algorithm to identify the user based on the standard attributes passed on by the user’s device (including device type, operating system, IP address, user-agent, and fonts).
- Statistical ID – This method uses algorithms that operate off a user’s device, using information provided by the device and its gateway to access the Internet. The Statistical ID method is a probability-based solution.
- HTML5 Cookie Tracking – This tracking method is similar using cookies in the desktop environment. The user’s device stores the HTML5 cookie. However, the browser must be open to set or retrieve the file. Because of the disruption in user experience, Apple has already started rejecting apps that include this method of tracking.
During this period of change, there’s likely to be more solutions that appear. It’s unclear exactly what will emerge as the standard for marketers. Until then expect more discussion around tracking and privacy.