The Impact Of No More Third-Party Cookie Targeting In Firefox

“The Internet is great because it allows ideas and content to flow freely. You can hop from your custom radio station, to your bottomless Gmail account, to a friend’s Twitter feed, to a foreign newspaper, to a game of Scrabble with your mom. We’ve come to rely on these services and expect to access them for free, without paywalls or contracts.

Display ads make this possible. They are the lifeblood of the Internet. The only form of display with a reliable return on investment for advertisers is audience-based targeting. And that’s the reason just about every product or service brand now uses these techniques.

The internet economy has matured to depend so heavily on this type of advertising, parties on either side must not act unilaterally with crude changes, or else privacy could devolve into a cat-and-mouse game. Browsers will add obstructions, advertisers will find new workarounds, and with no standards, ultimately the users will be the ones left behind. While early AdChoices and Do Not Track are not perfect, they are coordinated steps towards a thriving internet in which users have more transparency and control.”

“The implications of these changes are bad for business, bad for the Internet, and bad for users.  The first result will be that websites and publishers will see an immediate reduction in their revenues, as non-personalised ad targeting commands only a small fraction of the CPMs that targetable impressions are able to command. The changes will also have a direct, detrimental impact on ecommerce businesses, many of whom rely on cookie-based performance marketing to bolster their sales.

This seems a strange move at a time when the industry has taken great strides to collectively self-regulate with a focus on giving consumers choice. This removes that choice when consumers have consistently indicated that they would prefer fewer, more-relevant ads.”

“Privacy in general online is a slow roll but it is inextricably being driven by consumer sentiment and heavy lobbying in DC to eliminate the use of 3rd party data. For some ad tech players it’s obvious eliminating 3rd party data will kill their business.

For consumers the effects will be negligible. Over the past decade 3rd party data has done little to make advertising more relevant. This is the root of the entire issue. If consumers experienced benefits from this data use and thus advertisers, there would be no issue with its use.

For publishers it will drive CPMs higher. Considering the largest publishers on the web are Google, Facebook and Yahoo that should be a good thing for the digital ecosystem. Publisher 1st party data is better data for advertisers anyway. Performance will improve for advertisers and in the end the irony will be that more ad dollars will flow to digital because of eliminating 3^rd party data (and moving towards 1st party data) than came to digital from having it.”

“Like many in the industry, including the IAB, we would prefer this move was not occurring, but at the same time, don’t expect revenue impact from it.

The decision to include this functionality activated by default will lessen the consumer experience by removing relevancy (and not just in advertising), remove their choice (because many won’t know this is occurring) and set a precedence that fails to balance the needs of the consumer and the marketing industry. For small publishers, the decision is worse; such organizations will loose the ability to generate revenue from advertising, and may therefore disappear.

While this move alone won’t have huge ramifications, we could see new behaviors occurring in the future, such as publishers not allowing visitors access to their content with certain browser types. After all, as an individual on Facebook you are not the consumer, you are the product, and you cease to have value, Facebook may cease to let you in.”

“Mozilla’s default third party cookie setting will cause the percent of users opted out of tracking to jump from 1% to about 20%, which will be significant for the first time.  Programmatic media buyers with accurate targeting needs will avoid Firefox inventory.  The general inventory reduction will have an impact on prices.  Loss of an entire audience segment will have an unknown but potentially bigger impact.

In the short term, Firefox 10 users will have a less relevant and more annoying ad experience.  Without tracking from impression to conversion, the majority of display campaigns on Firefox will likely be low cost CPC campaigns such as tooth whitening products, supplemental diet pills, etc. This is a terrible outcome for the industry, which has been evolving beyond the click and will be forced to step backward.

Longer term, the publishing and ad industries will change business models and technology. The lower advertising value of a Firefox user will accelerate the trend towards pay walls. Advertisers will find work-arounds such as browser envelope profiling (see https://panopticlick.eff.org/), Flash cookie persistency, or yet to be engineered alternatives. These work-arounds will reduce transparency to consumers compared to the existing, self-regulated methods of the IAB and NAI.”