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Are Cookies Going Stale?

DMNews

January 2014

The deprecation of cookies as the ubiquitous standard by which companies track online consumers has created a fervor in the display advertising industry. In February of last year Mozilla, the developer of Web browser Firefox, announced plans to automatically block third-party cookies. Although the company has since wavered on its decision, the status of cookies as an online tracking mechanism continues to cause anxiety.

But cookie blocking doesn't just affect advertisers; the change will also impact online marketers. With cookies out, new standards will arise.

“With Mozilla's action, it became clear that a few companies can alter the way an industry works,” says Omar Tawakol, CEO of data solutions company BlueKai. “We needed something more stable, so we started developing technologies for cookie-less advertising.”

Google is rumored to be developing AdID as a replacement, and marketing trade organizations are also working to develop better—and consumer-accepted—methods of tracking. But what does this mean for the marketing industry?

Certainly there's concern about Google's possible lead in developing a standard. “Should that universal ID be controlled by one of the major players?” asks Rob Gatto, president of data solutions provider Aggregate Knowledge. “There are some concerns having one tech giant own it.”

Of course, this presumes that a single company's standard becomes the default. The fact of the matter is that cookies are antiquated, designed for a time when households shared a family computer. In a multichannel world, cookies are inadequate in that they fail to track users across multiple screens. “Cookie information in and of itself is incomplete information,” says Scott Howe, president and CEO at Acxiom. “It blurs distinctions across devices and channels and households, because it doesn't get down to the individual level.” This makes it difficult for online marketers to have effective, personalized conversations with their customers.

While Howe echoes Gatto's point that it's potentially worrisome if a single company like Google dominates tracking standards, he doesn't see that happening. Instead he predicts “a wave of consolidation from hundreds of thousands of cookies to a smaller set of megacookies” owned by major e-tailers and publishers like Amazon, Yahoo, and eBay.

Marketers' dilemma

Despite the limitations of cookies, marketers still heavily rely on them. James Koons, chief privacy officer at email marketing services provider Listrak, for instance, worries that the move away from cookies is going to limit the effectiveness of many tools. “To set yourself apart in that commoditized world of email, you offer different things that plug into it,” he says. “Things like post-purchase metrics or buyer lifecycle marketing. So having a recommendation engine without the third-party cookie tracking will stunt the growth of innovations like that."

But brand marketers are fully aware that the inability to cookie browsers could impact their online business, and have started to integrate solutions to maintain the ability to personalize the online shopping experience. Cosmetics company Lancôme, for instance, encourages social log-in. “Today we use personalization because the cookie-management landscape is changing so much and many browsers are neglecting cookies,” says Alessandro Rossi, VP of interactive and e-business marketing at the cosmetics giant. “What we do is have an easy log-in, like a social plugin, so [customers] can log in just by pressing a button, and we can personalize the experience. We're still on cookies, but we're starting to shift the strategy.”

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