Google is looking at a way to replace the web's foundational technology for targeting display advertising -- third-party cookies -- with a system of its own that could solve some big challenges facing advertisers and drastically expand its grasp on the industry.
WHY IS THIS HAPPENING?
First-party cookies come directly from the sites you visit, but third-party cookies are placed by other companies that collect information on you, and are endangered. The privacy-minded do-not-track movement now causing so much consternation for advertisers is predicated on making it harder for companies to use third-party cookies to follow consumers around the web. Traditional cookies are also pretty much useless for mobile advertising.
WHAT IS GOOGLE DOING?
Google is holding internal deliberations about creating an alternative to third-party cookies. It would likely try to develop a better system, one that would, for example, work across desktop computers, tablets and smartphones. That cross-screen capability would enable advertisers to more accurately target smartphone users with ads based on laptop web browsing. Google would also probably give consumers more control over their information, attempting to defuse the privacy concerns driving do-not-track.
WHAT DOES IT MEAN?
Marketers could lose some of their insight into audiences, while Google could gain a much better perspective than it has today. If Group M's automated ad-buying unit Xaxis, for example, used Google's cookie replacement to target users for WPP clients, Google could get a window into those targets, the sites they're found on and the prices advertisers are willing to pay to reach them.
Transparency about how Google uses that new window would be essential if marketers are to trust the system. But anyone adopting Google's system would have to bend to whatever terms Google sets in how that technology and the information it surfaces can be used. In this scenario, Google rises from being the biggest card player at the table to owning the casino -- with advertisers using its chips.