Cookies and Tracking: Are We Part Of The Problem Or The Solution?

jordanmitchell“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jordan Mitchell, interim CEO at DigiTrust and vice president of product at Rubicon Project

We’ve all heard about the inevitable death of the cookie, but have we really found any viable solutions from within our industry to solve its problems?

Despite a handful of proprietary alternatives and attempts to eradicate tracking by privacy advocates, there has yet to be a mutually agreeable solution that satisfies everyone, including consumers and the publishers and third parties whose businesses rely on cookies to operate. In order to fuel the next wave of industry innovation, we need to come together, take responsibility for how our use of the cookie is impacting consumers and show leadership on a solution.

One potential fix is a universal identifier. The IAB and dozens of companies have taken early steps on this route, and I believe we should cooperatively build and deploy technologies that improve on the cookie model for stakeholders. But first it’s going to take agreement on all sides.

How We’re Part Of The Problem

I would argue that the root problem with the current cookie model isn’t the number of companies setting cookies – that number has grown, but merely at a linear rate. What is far more problematic is that the relative volume and frequency of third-party requests on Web pages has increased at an exponential rate. I believe that the biggest cause of this exponential increase is “pixel syncs,” and this is an opportunity we should focus on.

Unlike 10 years ago, it’s now common for websites or mobile apps to utilize hundreds of third parties in their digital supply chain to facilitate the delivery of personalized content, services and advertising to consumers. Each of those companies creates their own proprietary, yet anonymous, identifier for each consumer device and mobile app, to which data is attached.

Third parties increasingly synchronize their identifiers with each other as a requirement to working together on publishers’ and advertisers’ behalf. The current practice to sync those identifiers is to deploy pixels on Web pages – a pixel for each partner they work with, and each device or identifier they hold. Four parties working together results in 12 pixel syncs across the Web for each device. Eight parties working together results in 56 pixel syncs for each device. The combined growth in Internet-connected devices, third parties and third-party integrations within the digital supply chain is causing a perfect storm, resulting in an exponential increase in the number of pixels being fired on publishers’ pages.

This situation is not optimal for any stakeholder. Privacy-minded consumers worry about who has what data, where it is and how to control it when it’s progressively fragmented. Publishers are increasingly concerned with page load latency and data leakage. Technology platforms must shoulder growing infrastructure costs due to accumulation of massively redundant ID-syncing pixels. And as a result, advertisers are experiencing a rise in data loss and cookie churn, which affects scale and measurement. As a whole, the current model causes anxiety for the entire ecosystem.

Furthermore, we should expect continued growth in Internet-connected devices per consumer, with each potentially running multiple Internet-aware apps and supporting different methods for device identification. By 2020, the number of smartphones, tablets and PCs in use will reach about 7.3 billion units. Other connected devices, referred to as the Internet of things, will expand at an even faster rate, growing to 26 billion units by 2020, per Gartner. More devices mean more identifiers to sync, which means more third-party requests on Web pages unless we do something.

How We Can Be Part of the Solution

One possible solution to accommodate consumers’ privacy concerns and Internet experience, while leaving publishers and third parties’ current business models intact, is for the industry to collaborate around a common identifier methodology for all devices.

If we all agreed to use the same identifier for any given device, rather than everyone doing it differently, we would eliminate the need for pixel syncing and avoid billions of daily third-party pixels and cookies. Publishers would love to see their pages free of them, and third parties would prefer to turn off pixel syncs and eliminate the related infrastructure costs and resources. But above all, this level of collaboration would be a great first step to actually expand privacy options for consumers beyond opt-outs – imagine the ability for consumers to opt in to simple retargeting for up to three days, yet opt out of all other forms of behavioral targeting. This approach would be a win-win-win for consumers, publishers and third parties.

The IAB has already taken the critical first step, pulling together more than 60 companies within the “Future of the Cookie” working group to evaluate five distinct solution classes against a set of impressive guiding principles. They published their findings in the “Privacy and Tracking in a Post-Cookie World” white paper.

I believe as a next step, we need to cooperate within a nonprofit entity to build and deploy technologies that we all agree to use. Ideally, the right solution for the industry – one that properly fuels the next wave of digital innovation – will be openly accessible to and accepted by all industry participants as a standard, just as cookies were 20 years ago.

Agreeing to use the same methods for identifiers would be a feat that would require nearly unanimous acceptance by the publishers and third parties that rely on cookie technology for sustainable business models. It’s not a simple task, but if we’re ever going to move forward from the increasingly broken cookie model we’ve been using for the last 20 years, we need to come together as an industry, take responsibility for how our use of the cookie impacts the ecosystem, and show leadership on a solution that works better for everyone.

Follow Jordan Mitchell (@kickstand), Rubicon Project (@RubiconProject) and AdExchanger (@adexchanger) on Twitter.

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