The Third-Party Cookie Divide Is Debilitating the Industry
The digital advertising industry is unnecessarily dividing itself, dangerously so since Mozilla announced its intention to block third-party cookies by default in an upcoming version of Firefox.
Third-party cookies are not all bad or all good. The companies behind these controversial tools are established members of the digital-advertising supply chain that provide an array of services, and their relationships with other industry participants should not be defined or determined with one broad stroke. All-or-nothing proclamations and actions on this matter represent a dangerous over-simplification that's creating conflict and putting the industry at risk.
This face-off must be replaced with thoughtful and productive discussion recognizing the subtleties of the marketplace, the individual interests of businesses, and the true north that all parties invested in this discord and its resolution share: the desire to deliver value to consumers that is dependent upon trust, comfort and control over their privacy.
It is fully understandable how we got here. The Internet is built on third parties. Unlike the newspaper business, in which publishers historically owned everything from their printing presses to their delivery trucks -- occasionally the forests from which they made their paper -- the Internet is a sometimes seamless, sometimes rusty chain of unconnected companies and activities that deliver a world of content to consumers who want it.
Many years ago, publishers chose to make certain parts of their inventory available to ad networks -- the original third parties. As this relationship evolved from one of remnant inventory sales to a much more sophisticated alliance with buyers and sellers, some publishers and marketers have taken a greater interest in preserving the value of a first-party relationship. Often this pursuit comes to life through the development of their own proprietary technologies and private exchanges, in an effort to gain scale, and capabilities like re-targeting and other techniques for enhancing consumer engagement. They are eager to be less reliant on outside companies, to be able to directly supply more of what marketers want and to gain as much value as possible from their audiences.
On the other hand, companies placing third-party cookies often take the view that they provide a variety of valuable technology services, which serve to strengthen the ecosystem. They see the wealth of data that they help make actionable evolving the marketplace toward advertising's Holy Grail - right place, right time, right consumer messaging. They perceive the services they provide -- frequency capping, better targeting and data protection, for example -- making interactive advertising more valuable to marketers, publishers and consumers. If the marketplace faces a limit on third-party cookies, they expect growth to diminish.
This division between the desire of publishers for more control over their customer relationships and third parties attempting to generate value across a diverse ecosystem has created a tension, which has been enflamed by the advancements of browser-based, default third-party cookie blocking and do-not-track mechanisms. We, the digital-advertising industry, are now at a point where we must take a step away from these positions, lower our defenses, and engage in a more productive dialogue, otherwise risk a fractured, polarized, weaker industry.
Unity is required to develop operating standards, define best practices, influentially lobby and effectively self-regulate. Without recognition and protection of our common ground, we will continue to drift apart and lose the ability to speak with one voice. A good dose of reality may be enough to begin to bring us back together.
First, relationships between first- and third-party companies are complicated. Some publishers rely on third parties and don't have the interest in managing this themselves, while others would prefer to self-manage.
Second, looking beyond the traditional web, we need to consider the proliferation of interactive platforms and devices, and the implications of this debate on smartphones, tablets, smart TVs, smart cars, etc. It's exhausting to sort through this issue related to one platform, only to then start over for another.
If we've learned anything from the development of the digital-media marketplace, it's that choice wins. Marketers, publishers and users expect to have the freedom to form their own interactive relationships, and it is this freedom that will enable the development of the tools that will achieve the best balance between first- and third-party relationships. From another angle, users cherish digital media for the opportunity they provide for self-directed exploration and the creation of personalized experiences. Favorable industry sea changes have not occurred through unilateral controls and enforcement. They have stemmed from popular demand, consensus, the appetites of buyers and shared interests.
It is time for all parties invested in this debate to engage in a broadened discussion focused not on all or nothing, but how to best satisfy the needs of our individual businesses and our users. Only by identifying what would make consumers happiest and most comfortable will we be able to continue to fuel the growth of the entire digital media economy.