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

cookieMozilla’s move to stop third-party cookie tracking in the latest version of its Firefox browser – echoing Apple’s Safari browser attributes – has attracted wide attention across the advertising industry.   And no wonder – Mozilla’s Firefox has about a 23% share among consumers in the browser market.

AdExchanger reached out to a selection of executives in the industry and asked the following question:

With Mozilla shutting off third party cookie targeting, what will be the impact on online ad buyers?

Click below or scroll down for more:

Aaron Bell, CEO, AdRoll

“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.”

Sam Barnett, CEO, Struq

“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.”

Jonathan Mendez, CEO, YieldBot

“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 3rd party data (and moving towards 1st party data) than came to digital from having it.”

Dax Hamman, CRO/CSO, Chango

“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.”

Eric Bosco, COO, ChoiceStream

“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, 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.”

More AdExchanger “Industry Reactions”…

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  1. Even though this is a slight negative for our business (one of the things our platform allows is for advertisers to manage retargeting ads on Facebook, similar to AdRoll but in their own FB ads accounts – and this relies on our own real-time 3rd-party retargeting pixels), I love this move for Mozilla/Firefox. Firefox is where AdBlock Plus started out and where it became the #1 plugin (even though still a very techy non-mainstream audience). If third-party cookies really do add a lot of value for advertisers and publishers (and tech vendors), then we should all make the case about why, and prove it.

    The market for internet browsers is pretty ruthless; the market will provide fast feedback and it could certainly stand some additional consumer-oriented innovation. As an industry we need to do better.

  2. Would have been nice to get some VARIED opinions here… and not ONLY views from people who are against the move.

  3. Rob, I will accept that challenge! The reason no one is saying anything because they are scared to…

    My response is the same one I gave to Randall’s IAB announcement which is this:

    1. “So if it’s the user choice; why should the default choice be yes for ads?”

    I have yet to get a response from any one?

    2. I see all the talks of inconvenience to the user but let’s be upfront and honest. For a very long time, online display advertising has been considered a have to deal with nuance, by the user. No one likes getting banner ads saying “Weight Loss While Eating Twinkies” or flashing banner stating the “Greatness of Colon Cleanse” and this list could go on for a very long time. But yet we get them with all these great technologies that say they are to provide an awesome online advertising experience. SO it is evident this great technology – its not working!

    3. As far as having to log in each time to use a favorite site that has my info, my credit cards, etc, maybe not a bad idea to have to do that each time…

    Most importantly is this question:

    Why should the user accept advertising?

    No one has answered this question either…

  4. Alejandro Correa

    What do we (marketers) really lose with cookies? Behavioral targeting which, aside from retargeting, is mostly an expensive/inefficient way to buy ads on sub-par content? Attribution, which most are still measuring on the last click, and which, in many cases, is only vaguely, if at all, connected to true value to the advertiser?

    I hope that the industry takes this as an opportunity to rethink why we serve billions of impressions every day. Is it to cookie-bomb as many browsers out there so that we may take credit for as many sales as possible? Is it to call someone an “SMB CEO” because they signed up for free business cards?

    If our industry’s business model really is based on whether mozilla feels like adhering to what is, a priori, a reasonable web-based security protocol (i.e. not letting third party sites the user has never visited place trackers on their browser memory) then I would say it was built on tenous ground to begin with.

    I guess this is shaping up to be a rant, but I must say I am annoyed by the vitriol coming from the pro-cookie camp. I don’t know if off-line buying channels do it any better, but it would be very refreshing to see our industry move back to user-focused advertising on great content.

  5. @MaximumLLoyd let’s be more honest regarding #2. ALL advertising is a nuisance to consumers. Don’t you DVR certain shows so you can fast forward through the commercials? Don’t you hate having to skip 20+ pages of ads in certain magazines to get to the content you paid for?

    Keep in mind that you are paying for both the magazine (on newstand or subscription) and the TV shows (monthly subscription) and STILL getting those ads. Online content is by and large free, except for those pesky, incorrigible display ads.

    In this context, aren’t online ads the better deal for consumers?

  6. No disrespect to AdExchange – a great industry site – but our pro-cookie voices are wasted here. We should make our points on Facebook, via LinkedIn, on bumper stickers, at city hall, state capitols, etc.

    How about a million-cookie march on D.C.?

  7. Max Sanders

    If this trend continues, many vendors who rely on this third-party data need to decide how they want to react.

    They can plan into the future and re-think the relationship between users, third-parties and their business model. Or they can go back to their dev team and think about ways to bypass third-party cookie restrictions.

    Unfortunately I think most will go for the latter, which will only perpetuate the low-rent reputation of the advertising industry.