“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 Carla Holtze, CEO and co-founder at Parrable.
I spent some time over the holidays with an old friend who used to work in the music business back the 1970s and ’80s. Back in their heyday, the record companies were able to fudge – and perhaps manipulate – the counting methodology used to determine sales figures. It eventually got to the point where those numbers were difficult for anyone – including those same record companies – to trust.
He said that it started out as little bit of a game where “some” companies would “skim” a bit off the top to increase their bottom lines. But eventually, “some” became “many” and “skim” morphed into “manipulate.” Over time, almost nobody – even the insiders – really knew how many units were being sold. Sales across entire musical genres, such as alternative, hip-hop and grunge, were initially underreported, which left the growing market for those underserved genres to be covered by others.
By now, you’ve probably figured out where I’m going with this. It has become more and more clear that digital advertising needs independent counting mechanisms that are not reliant upon those provided by the walled gardens. While I believe that most in the digital advertising industry embrace this concept in theory, adoption of alternative attribution methods has been slow for a number of reasons.
The Boiling Frog Analogy
Nobody really started to panic about the demise of the cookie until Mozilla began threatening to follow Apple’s lead and block third-party cookies by default. That type of move would have delivered a massive negative shock to the digital media marketplace.
But in general, many of the things that impair today’s counting mechanisms have tended to be much more gradual. Cookie deletion rates have increased at a relatively slow but steady rate over the past 10 years. And such issues tend to be offset by growth of digital ad spend. Also, these types of issues are much easier to sweep under the rug so long as the growth curve is trending upward.
Theoretical Vs. Concrete
Moreover, most of the comparisons between non-HTTP cookie tracking methods and traditional cookie methodologies have been conceptual and theoretical, which can be anesthetizing. By way of analogy, it’s one thing to say that climate change is a harmful thing in the abstract, but the issue really comes to life when you can visualize the impact of sea level rise.
Admitting that the counting methodology you use is broken is great for industry thought pieces; it’s quite another thing to quantify how skewed numbers lead to poor decision-making. In my view, most of the digital media industry takes the issues created by HTTP cookies for granted – it’s become sort of a cost of doing business. Perhaps that’s because not enough of us have looked at the numbers and assessed the direct impact.
I have seen the delta between various counting methods and am hopeful that others will begin to publish them soon. The numbers are pretty astounding.
We’re All Fighting Over Cookies, While The Real Battle May Be With Walled Gardens
Yes, the cookie certainly has its limits. But a much more important issue is that cookies as a fundamental counting mechanism are becoming a smaller portion of the digital media mix. We all recognize that as mobile app advertising has increased, the use of cookies has decreased.
But that’s only part of the story. With the advent of people-based marketing, the cookie is being replaced by a combination of personally identifiable information and privately owned tracking identifiers.
In that light, Google’s recent decision to remove all third-party pixels from YouTube is even more troubling than Apple’s decision to depreciate IDFAs. At least Apple can rationalize its decision in the name of privacy, although it is unclear whether Apple retains the ability to track users who have opted out. When you remove the ability for others to independently count, rate the efficacy of and draw insights from their media spend, companies ultimately devalue their own media.
On that note, I was pleased to read that Facebook is in talks with the Media Ratings Council regarding auditing all or part of Facebook’s ads. But that only covers part of the story. I don’t want to look down on the effort, as it’s clearly a step in the right direction. However, it doesn’t really address the larger issue around drawing user-level insights from media buys on Facebook – or any of the walled gardens, really.
Want to know at a user level how a Facebook campaign influenced and was influenced by the TV ad campaign that ran last month? Good luck.
Advertiser Acceptance (aka Acquiescence)
The promise of digital advertising was to be able to count effectively so that advertisers can do a more effective job during the next campaign. Almost 20 years in, that promise remains unfulfilled.
Advertisers and their agencies control the purse strings that drive everything. Those same advertisers could and should be putting pressure on everyone to offer more effective counting methodologies.
It’s almost as if the advertiser currently has a disproportionately low level of power and influence over its media spend. Sooner or later, advertisers are going to start demanding that level of accountability as a prerequisite to media spend. And when that happens, they’ll start to get the counting mechanisms they deserve.
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