Should Marketers Fear the Cookie Apocalypse?

Marketers have until June to get over cookies, a digital advertising executive said earlier this week.

Speaking on a panel at the Programmatic I/O conference in San Francisco, Brian O’Kelley, chief executive of AppNexus, said he thinks that do-not-track or privacy settings enabled in the latest versions of most browsers will destroy the ability to retarget consumers. “If browsers block cookies, a significant amount of money will go away,” he said. That’s not only for the ad exchanges and platforms like AppNexus; O’Kelley thinks publishers would take a hit, as well. For example, he estimates that over half of Yahoo’s premium impressions contain audience targeting characteristics.

In fact, the ability to track users across websites is a lot of what creates premium advertising, responded Victor Milligan, chief marketing officer of mobile ad network Nexage. The question, he said, is whether the industry can create another standard to replace the cookie. As an example, Milligan pointed to OpenRTB, an effort to create open industry standards for communication between buyers and sellers in real-time bidding marketplaces.

“If we’re going to create a vibrant, open environment, we have to get marketers and other parts of the industry together,” he said.

Since the invention of cookies and the internet, consumers have said they didn’t want to be tracked, even as they happily clicked on online retailers’ recommendations. The tipping point might have been retargeting, the eerie way the pair of shoes you looked at on Zappos follows you around the web.

“Retargeting might perform well, but it’s creepy,” O’Kelley said.

There’s also resistance from publishers, he said. If ad exchanges and real-time bidding platforms can’t use consumer data aggregated from visits to multiple websites, the largest publishers will have sole access to troves of data on consumer behavior on their own sites. O’Kelley said, “I wonder if we’ll see major sites telling [site visitors], ‘this site works best in Chrome,’ because that browser company paid them or monetized better. It’s exciting if you’re Google.”

Advertisers have already tried and failed to stop the anti-tracking wave.

But Jonathon Shaevitz, chief executive of Legolas, told ClickZ that agencies still have the most leverage. “All it would take would be for an agency to say, ‘We’re not paying for any impressions that come through Mozilla,'” he says. While it’s true that agencies often engage in impression arbitrage, buying cheap impressions via exchanges, overlaying them with proprietary data, and then selling them to clients at a higher cost, he points out that without being able to buy cookie identities in the first place, all their fancy analytics would be useless.

Later in the conference, Scott Knoll, chief executive of Integral Ad Sciences, a company that provides services to help brands understand the quality of media in which their ads might appear, said that cookies have been over-emphasized, anyway. He said, “By focusing on cookies, we’ve made the biddable audience really small. You’re bidding up a small percentage of inventory really high and ignoring a large part of the inventory, because it doesn’t have the specific cookie you’re looking at.”

Knoll didn’t have an alternative to offer, but he said the industry would be better served with a solution that provided some kind of data on every impression. He concluded, “Three things affect outcome of your campaign: the message, finding the right person, and finding that person in the right place at the right time. The industry has been focused primarily on audience, but you need all three.”

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