Tag Archives: cookies

Cookies Will Become Brownies

Cookies seem to be dominating the conversation lately.   While I’d prefer talking about black + whites, chocolate chip, Mallomars, or Milano’s, our attention for the past year has been around the ecosystem surrounding first, second and third party cookies.   This post will not go into the technicalities around cookies but rather the idea of cookies in existence.

Cookies (of the computer context) were created for website session management.  They [cookies] were not originally constructed nor conceived as an advertising tool.  Once the initial 3rd party ad servers were built in the mid 1990s, they relied on these cookies to help track and measure a digital media campaign via leveraging data written to and contained in a cookie.

The majority of the $117.60 billion dollar* worldwide digital media ecosystem is beholden to the cookie.  It’s why the IAB has fought so hard to protect the third-party cookie, as every company who pays the IAB its annual dues are impacted by the potential threat to remove third-party cookies.  You cannot fault Randall for protecting his fiefdom and the organization that he has successfully grown.

In the above paragraph, you will notice I reference the specific type of cookie:  third-party.  All too often in our conversations, we do not reference the specific types of cookies we are talking about.  Much of the spotlight in today’s conversations is around third-party cookies.  These are cookies that are set by neither the consumer nor the website they are visiting but rather a third party in the equation.  Sometimes this third party cookie is set by a third party ad server such as DoubleClick DART, a data company such as CrossPixel, a re-targeting company such as Criteo, ad exchange such as AppNexus, supply side platform/private ad slot such as Rubicon, ad networks/DSPs like RocketFuel + MediaMath, social plug-ins like Facebook Beacon/Connect, and many other examples.  Reference the Lumascape for Display for many other companies who utilize 3rd party cookies.  As you can see, I drew this out on purpose because the impact of the threat to remove third party cookies has far reaching consequences.

I was sitting with an investor yesterday and she asked me straight out, “what happens if third party cookies go away?” I get this question often and I half jokingly say, “we’ll have cupcakes and brownies.”  I’m actually serious here.  She looked confused and laughed with me… but I provided some backup.

Digital advertising dollars are invested, traded, measured, and optimized on the idea of “quantification” of spend.  Validation of spend.  Measurement of spend.  Whatever other word you’d like to use.  This quantification, while not 100% accurate, is better than any other media channel we have… and is pretty much all based around a third party cookie.

My view: If the third party cookie goes away, the industry will create something to take its place so it can continue to measure.  A brownie or cupcake if you will.  Or Milano or Mallomar (if it were up to me).   

This is validated through many of the conversations that I’m having with young startups and larger technology/media companies.  Hearing terms like UDID, ADID, safehouse, clearinghouse, serverside, and others are being thrown out as ways to help identify, target, segment, scrub, or track display/mobile/tablet devices.  I’m sure there are dozens of ways in addition to the ones listed that are being built by different firms.

The impact of the removal of the third party cookie will have consequences to IPO candidates and currently public companies such as ValueClick, RocketFuel, Criteo, YuMe, Tremor, Marin, Facebook, Google, Yahoo!, AOL, Microsoft, Acxiom, and others.  Criteo and RocketFuel are probably most vulnerable as they are going thru their investor roadshow and this should be one of the first questions that investors ask.

Some cookie based thoughts:

I never really understood the Facebook acquisition of Atlas Solutions.  It dawned on me a month or two ago why it was special and unique:  If Atlas has the ability to deliver an ad server solution in the client domain space, then it can feed the Facebook audience segmentation data through and deliver voluminous audiences through their ad server without having to sync third party cookies.  This gives a leg-up to folks using the Atlas Solutions ad server.

There are companies such as TrueEffect that have popped up that are delivering first party ad serving and media measurement.   This is important similarly to Facebook/Atlas example above.  Other third party ad servers have the ability to serve in the first party but a special agreement has to be formed.

Google and Mozilla are going to be players in this ecosystem beyond what we can imagine today.  Chrome and [Mozilla] Firefox see the majority of the Internet’s traffic and have quite a bit of data that is very valuable to many different stakeholders, inclusive of the consumer themselves.  Recognizing value in that data is something that has not been fully done yet for the consumer and it’s an opportunity for the marketplace.

Companies in the content marketing space have side skirted the conversation around third party cookies but they too are directly affected.  If agencies and/or brands are measuring their content marketing campaigns thru folks like Buzzfeed, Outbrain, Nativo, etc by placing a 1×1 pixel or click tracker, they are essentially measuring the same as a display campaign.  Understanding the impact of third party cookies to the content marketing space is important because measurement directly affects the growth of the space.

First party cookies are not going away, at least in the short term.

That is all, thank you for reading.  You should react in the comments (below) or via twitter.  You can tweet me at @dherman76 and I look forward to responding/chatting.  The cookie conversation is serious and important to this whole industry and I probably missed 50% of all the conversations happening.  The above is not meant to be all encompassing but an addition to the already started conversation that is taking place on sites like AdExchanger or MediaPost or list-serv’s like Harvard’s Project VRM list.

* eMarketer August 2013

** Note, I used many examples of companies in this post.  The only company to my knowledge that I have privately invested in is CrossPixel though might be a shareholder of other publicly traded companies in this post.   There are many companies in the entire industry and I cannot fit each company into each post I write.  If I left your company out, I apologize.  If I miscategorized your company, I apologize as well and get in touch so we can chat about it.

Cookies, The President, and Ad Tech

There is lots of chatter in the government and the digital advertising industry around privacy and cookies.  You can do a simple Google search and get all the details about self regulation vs. government reform.  I even created a Slideshare document on this back in October 2010.

I wanted to write this post to document something:  if the government steps in to intervene in the privacy and cookie war in the digital advertising industry, lets look at what President Obama used to help win his re-election.

Obama has at least 30 providers of marketing & advertising technology working for him.  Romney as of 12:19PM ET today (11/7/12) has 18 trackers.  This Obama screengrab was taken at 11:55pm ET last night on his official homepage.  Ghostery provided the insight on the right of the screenshot and we can see many cookie-enabled technologies.

Next time you hear about the government coming down hard on cookies & privacy, remember this post.

(This post is not supposed to be a political ding in favor of one party over the other.  I’m one of the least vocally political people in the USA.  It is supposed to provide insight into cookie use for political candidates, in this case, the President Obama.)

 

Google's Cookie Jar

Online, cookies scare people.  Offline, cookies put smiles on faces (and holes in people’s teeth).   Could they be any more diametrically opposed?

Here is MSFT‘s definition of a cookie:

Cookies are text files that a Web server can store on a user’s hard disk. Cookies allow a Web site to store information (sites visited or credentials for accessing the site) on a user’s machine and later retrieve it. The pieces of information are stored as name-value pairs. Cookies are designed to be readable only by the Web site that created them. A name-value pair is simply a named piece of data. It is not a program, and it cannot “do” anything. A Web site can retrieve only the information that it has placed on your machine. It cannot retrieve information from other cookie files or any other information from your machine. For more information on how to handle cookies in Internet Explorer, read the Microsoft.com Cookie FAQ.

Google today announced that they were going to put a cookie on any browser who visits a site in the Adsense Network.  The first reaction to hearing this for many people is probably negative.  However, this could be a very good thing and could advance online advertising a step further in the right direction.

By Google dropping a cookie on browsers, they know the frequency at which you have visited their “network.”  One issue that many advertisers have (and consumers certainly know about it because they voice their frustrations) is setting a global frequency cap across an entire media plan constituted of different sites.  It’s difficult, just ask any media planner.  Doable – yes, but not perfect.

Since the Google Adsense network is vast, having a way to track global frequency for advertising across is very helpful and sexy to advertisers.  If you’re not part of the advertising world, you may be asking why “frequency” is important.

First, frequency is the amount of time a person is exposed to a particular ad in a set period of time.  There is a point where the law of diminishing returns kicks in and running too many ads to a particular user may actually work negative against the brand.  If you’ve surfed the internet and have seen the same ad over and over and over again and you’re wondering why… they are probably having problems with setting frequency or managing the yield curve.  There are other reasons why but they are not for this little ramble.

Additionally, there are two conversion metrics that both DART (DoubleClick) and Atlas (Microsoft) use for measurement:  click-through and view-through.  Click Thru (CTR) is what we know of when a user clicks an ad and goes to the website that it’s affiliated with.  A View-Through is another form of conversion that accounts for when a user is exposed to an ad but does not click it, but later, ends up at that advertisers site (within a certain amount of time).  Google is looking to better measure this, especially as conversion attribution is becoming a hot topic in today’s advertising landscape.

The Cookie Jar that Google is building may sound scary but it’s in the best interest of all of us.  If companies can serve much more targeted ads, then they actually can become useful instead of the “punch the monkey” that we seem to get quite often.

Cookies & Milk

As collecting, aggregating, synthesizing, and analyzing data is becoming a very important part of advertising (today on the web, tomorrow across all channels), understanding cookies is a must.   Avinash Kaushik, the Analytics Evangelist at Google has written a fairly comprehensive review of cookies.  You should probably read it.