Don't Be Misled By The Open Web’s Identity Crisis

The Sell Sider” is a column written for the sell side of the digital media community.

Today’s column is written by Joshua Koran, head of innovation labs at Zeta Global.

Google decided in March to postpone upcoming changes to Chrome, the world’s most-used browser, in response to the COVID-19 crisis.

While Google has decided to move forward with other planned updates, Chrome more recently chose to postpone its SameSite cookie labeling to ensure that consumers have uninterrupted access to critical information during the pandemic.

However, this raises the question of when would be a good time to impact such access. One of Google’s proposed Chrome changes is the elimination of cross-domain IDs stored in third-party cookies, which would similarly affect consumers’ access to critical information.

This change is at the heart of a misleading debate about consumer privacy, data interoperability and the open web’s future.

What the ad-funded open web requires

Much of the open web is subsidized by digital advertising, and the best way for marketers to focus their digital ad spend – as well as measure the effectiveness of their media buys – is through the use of digital IDs. Specifically, this effectiveness requires a consistent ID that can be used across publisher and advertiser websites.

Without consistency in the use of digital IDs, marketers will struggle to measure and control the frequency of advertising exposure, leading to a reduction in their return on investment. And depressed ROI for marketers will mean lower fees –  and thus, lower revenues – for publishers.

Based on Google’s three-month study across the 500 largest publishers it monetizes, the loss of cross-domain IDs will lead to a 52% decline in publisher revenue on average for inventory, and a median decline of 64%, given smaller publishers are impacted more greatly by eliminating digital IDs. (See IAB Tech Lab’s Innovation Day 2019.) It is likely for this reason, the proposed changes do not impact the tracking or profiling within walled gardens.

Valuable but incomplete alternatives

Fortunately, the cookie is not the only technology marketers can use to measure and control their digital media spend or detect fraud across publisher domains. Some suggest cross-domain IDs can be replaced by things such as contextual targeting, panel-based measurement and separate login requirements across all the websites consumers visit on a daily basis.

Contextual targeting is valuable, but it doesn’t allow marketers to limit the frequency of ad exposure across publishers. Nor does it measure the subsequent value generated by said exposures.

Asking customers to log in on every site they visit seems like a way to improve the data that drives people-based marketing, but many consumers will balk at having to disclose their identity. Moreover, many brands will not risk interrupting the customer journey to enter an email, just so they can tie prior browsing exposure across domains to interactions on advertiser websites. (And don’t forget how cumbersome entering an email address will be for consumers browsing on mobile devices.)

Panel-based measurement would be enough for marketers, given their continued reliance on this method for offline media measurement, so long as this was the standard currency for all publishers. But there’s no guarantee it would be the standard, and the limited scale of opt-in panels can lead to the underrepresentation of important minority audiences.

Also, don’t forget the improved effectiveness of cross-domain IDs that gave advertisers unparallelled control and measurement over campaigns is credited with being one of the key reasons digital ad spend recently surpassed TV ad spend.

The proposed browser-based APIs may provide some cross-domain control and measurement, but they merely substitute the competitive ecosystem with their own cross-domain data collection and processing.

Ideally we will not let vertical integration be the deciding factor in whether the use of technology is beneficial or detrimental to consumers.

What we all can agree on

Despite the aforementioned debate, all ecosystem participants agree on a number of points:

  1. The internet has become a critical global utility that supports the free flow of communication, commerce, content and competition.
  2. Publishers need to be compensated for the content and services they provide.
  3. Ad-funding of these properties ensures everyone, regardless of their financial situation, has equal access, especially during times of crisis.
  4. Free-market economies rely on competition, and competition benefits from lower barriers to entry for industry newcomers. It’s startups and new arrivals that often produce the innovative solutions that improve our society. (This point is of particular importance; whatever technology is introduced to replace the third-party cookie should continue to foster free-market competition.)

Improving the open web

As the world looks to re-architect the ad-funded open web, it must find a suitable replacement prior to purging the cookie. Whatever that replacement ends up being, it ideally should:

  1. Provide a fast, frictionless customer experience.
  2. Improve transparency and control for consumers over the replacement cross-domain ID.
  3. Continue to foster the competition and innovation that currently fuels the open web.

If the cookie replacement technology can tick these three boxes, it will both succeed in enabling marketers to subsidize publishers and provide consumers with enhanced transparency around data collection. It will also give consumers greater control over whether and which online activities can be associated with their offline identity. I am confident once we can agree on these important success measures, then the selection of the appropriate technical replacement will be straightforward.

Those are goals both promoters of the open web and advocates of increased digital trust, including Google, should all be able to agree on.

Follow Zeta Global (@ZetaGlobal) and AdExchanger (@adexchanger) on Twitter.

3 Comments

  1. This is a superb condensation of this issue and I hope it gets noticed. We've seen publishers in particular who think they can be "whole" with contextual targeting. We've seen clients who think they can be made whole by requiring authentication (even without a paywall). I'm afraid they will be disappointed. Identity and monetization aren't going away because cookies are going away. We will need to deliver solutions that are open and "tick the right boxes".

    Reply
  2. Casper Ng

    Hi Joshua,

    Thank you for the excellent article that was succinctly written. While I completely agree with on ideal requirements for cookie replacement to support an ad-funded open web, do you think that a feasible solution is possible, especially with regards to points 2 and 3? The direction with data clean rooms like ADH and Privacy Sandbox necessarily require technology/players which can readily integrate with existing platforms/panel measurement vendors which limits that potential for startups.

    Reply
  3. Great article - I reposted it to my 3k followers on Linked-In and hope it is picked up in the CMA Digital Markets enquiry.

    Reply

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