Planning For The Future While Your Hair Is On Fire

"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 Alan Chapell, president at Chapell & Associates.

There’s been lots to take in over the past month. During those moments when you’re not focusing on the safety of loved ones, you may be running around trying to mitigate against the economic downturn.

As a result, perhaps the recent Chrome cookie announcement has moved a bit closer to the back of your brain. That makes sense, particularly if you’re struggling to ensure that your company will be around two years from now to address the challenges posed by the elimination of the third-party cookie.

But I’d argue that right now is the best time to start thinking about the long-term challenges we face as an industry. During this time of chaos, decisions are being made and paths forged that will drastically alter the digital media landscape.

Chrome and the deprecation of third-party cookies

In January, Google announced the deprecation of third-party cookies within Chrome. It also announced that Chrome would join other browsers and industry stakeholders in a working group run by the W3C, a standards organization.

A few disclosures: I have some prior experience with the W3C going back to 2011 when the W3C created the “Tracking Protection Working Group” to create a browser-based Do Not Track standard. Back then, the browsers were looking to regulate tracking and at least on some level wanted the credibility of a multi-stakeholder process. There were a number of things that ultimately doomed this effort

My experience in the W3C working group was one of the more difficult situations of my career. To say that things were tense within that group would be an understatement. The tone and tenor from many participants – sadly, myself included – devolved into the realm of the inappropriate as no side had much time to or interest in hearing the other out.

But now there’s a big difference. The browser companies don’t necessarily need the rest of the digital advertising industry to come up with a standard. This time, the browsers may simply impose one.

While that may make for a more expedient outcome, I’m less certain that it will enable a process where different constituencies are heard. If you’re an advertiser and have some concerns about the current state of advertising via walled gardens, now is probably a good time to get involved.

Browsers as walled gardens?

Here’s what I understand is being contemplated in the W3C working group. They are just getting started so I’m sure that all of this is subject to change.

The browsers will create cohorts of users that are large enough so that it would be nearly impossible for anyone to identify any of the users in the cohort. My back-of-the-envelope guesstimate is that we’ll see cohorts of 500 to 2,000 users depending on the campaign. The basic idea is that ads get served into each cohort as a group, and that no entity within the ad chain will be able to break up a cohort. That may create some challenges for attribution (among other things), but let’s leave that to the side for now.

Regardless of the approach this working group adopts, the bigger question is whether any of the browsers will provide enough transparency into how all of this works in practice. Once these browser sandbox rules are in place, who gets to audit whether they are working as represented? Or do the browsers just become another set of walled gardens where everyone just needs to trust them?

If you're comfortable believing whatever results get spit out at the end of your campaign so long as it makes you look good, then maybe that's not such a big deal. But if you’re an advertiser that is trying to draw insights into your customers, this approach may leave you wanting. And if you're an ad tech platform looking to build an algorithm designed to compete in earnest under this new system, it's difficult to see how you don't view the whole process at best skeptically and at worst as a rigged game.

Allow me to crystallize what I suspect many of you are thinking: The goal of this initiative is to create an advertising system with a formula built into the browser sandbox that creates cohorts of thousands of users, but only the browsers understand how these cohorts are created.

One of those browsers has a competitive ad tech stack with 100 times my revenue; and another one has at times openly declared war on the ad industry. But I'm supposed to trust that whatever comes out of this initiative is going to be fair and consistent enough for me to build an actual business on top of it? And that none of the browsers with competitive ad stacks will have an unfair advantage? OK.

To their credit, the people I’ve spoken with at Google say that they absolutely want the input of other stakeholders. They state that they are committed to building an open and transparent process. For now, our only choice is to take them at their word. But if I were you, I’d be following this W3C working group very closely.

Follow Alan Chapell (@chapell68) and AdExchanger (@adexchanger) on Twitter.

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