As the digital economy was forming in the mid-1990s, marketers saw an opportunity to democratize e-commerce. Internet cookies were initially invented more than 20 years ago as a way for websites to anonymously keep track of a visitor's activities and user preferences. This innovative solution meant brands didn't need to ask consumers for the same information over and over, simplifying the experience by autosaving login credentials and allowing sites to implement shopping carts and other conveniences. These features became a major factor in the digital revolution. Then marketers improvised, and advertising technology turned the cookie into what it is today.
Cookies have long served as the backbone of the free internet, allowing publishers, platforms, and brands to better understand how to reach and engage consumers while providing complimentary access to services and information. Enabling the fair value exchange of the internet, cookies helped spur tremendous innovation and growth.
Cookies made it easier for sites to commercialize advertising opportunities and they became a critical mechanism for more sophisticated aspects of digital marketing, including ad and website personalization and analytics.
While the cookie still serves the industry, its functionality has not evolved in step with how consumers live their multidevice, multisession lives. It's clear that cookies may have gotten the digital advertising industry to where it is today, but cookies by themselves can't take the industry any farther. To keep up and stay relevant, marketers and advertisers need more than this one source of data.
Cookies As Part of a Whole
Cookies remain vitally important to marketers, but using them as a single source of identity is an imperfect solution for several reasons. The flexibility of cookies means they can be transient or persistent, but even when they're persistent, they have an expiration date. What's more, many consumers frequently delete their cookie histories or block cookies through browser configurations and ad blockers. Web browsers also reject the majority of tracking cookies, resulting in cookie loss, as eMarketer reports. Lastly, the digital giants in control can decide to change browser functionality or policy, which has the potential to create massive ripples in the cookie-based ecosystem.
Consumer behavior has also evolved to a point beyond the cookie's ability to fully measure user activity.
A dozen years ago, consumers had a single entry point to the internet: a browser on a desktop computer. Now, consumers access the internet from a variety of sources — such as connected TVs and mobile apps — many of which operate in "cookieless" environments that use their own customer IDs.
In the era of people-based marketing, the industry cannot rely on a single identifier. The consumer journey has become too complex and advertisers need options to maintain addressability across touchpoints.
Making the Sum Greater Than Its Parts
Advertisers and marketers alike require an omnichannel and people-based approach to user identity that ensures consistent representation of individuals across platforms, channels, and devices.
The industry has a choice: either marketers reduce their dependence on single variables such as cookies and develop people-based solutions that encompass all forms of identity, or they continue to waste ad spend, missing out on critical opportunities to reach the right audiences in the right places. This includes new and emerging identifiers on TVs and smartphones, which, according to Nielsen, is where U.S. adults spend the most media time.
Ultimately, this will enable businesses to maintain addressability and deliver exceptional experiences throughout the entire customer journey — even as identifier types change or channels shift in importance.
Industry leaders and participants should work together to promote an open ecosystem that ensures a level playing field for all. They should also advocate for greater transparency and control for businesses and consumers by espousing the following four principles:
- Promote a healthy and competitive ecosystem. Every participant in the industry has embedded, stable processes and technology on which they've come to rely. As a result, large industry platforms and others should minimize disruption, ensure that current tools can still be used effectively, and preserve innovation and a competitive ecosystem.
- Provide consumers with visibility and control over how their data is used. Every consumer wants to understand how their data is being collected and used. That's why browsers should give the consumer unprecedented control and choice while honoring the relationship and permissions that advertisers have established with their audiences.
- Do not use browser controls to disintermediate platforms and partners from the consumer. Every participant in the ecosystem wants to be able to connect with consumers through their platform of choice. Browsers should enable this — while respecting consumer privacy. The browser is the access point to the consumer and, like all utilities, should provide equal access to all participants. It should not disintermediate or dictate the relationship or controls a brand has established with the consumer. If consumers don't want personalized ads or don't want to be associated with a data point, they should be free to work with those companies to opt out or update their preferences. The consumer should always have the final say.
- Allow technology choice and independent measurement. Brands should be free to choose the tools and platforms they work with to deliver experiences to their customers — and the ecosystem should support data portability and independent measurement.
As the industry is compelled to think outside of the cookie jar, marketers have an opportunity to create a stronger ecosystem that lifts all boats. In order for the benefits of data to reach everyone, it must be democratized for the good of all, not just the privileged few.
Scott Howe is the CEO of LiveRamp, a partner in the ANA Thought Leadership Program.