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Advertisters scared as internet giants look to cut cookies out of their diets

A programmer writes computer code.

Cookies are big business. I’m not talking about Oreos. I’m talking about those trackers that advertiser use to keep tabs of you online. Those cookies have helped fuel a multi-billion dollar online advertising industry.

But recently, there’ve been indications that tech giants want to get rid of the cookie and this has some online advertisers scared, said David Rodnitzky, the CEO of 3Q Digital. It’s an online marketing agency in Silicon Valley.

If you see an ad on Google, if you see an add on Facebook, we might have put it there,” he explains at his office, which sits in a office park just off the 101 in San Mateo.

3Q Digital places those ads for clients like the American Red Cross and the fitness tech company FitBit. To do that, they use data from cookies. Those are the little bits of computer code that are left on your browser after you visit a website.  Rodnitzky pulls out his laptop and shows me how it works.

So let’s say we go to Ebay.com,” he said tapping on his computer. On his browser, Rodinzky has a special tool. It shows you all the advertising companies that place cookies on your browser when you visit Ebay.

“They’re using one from AppNexus,” he says reading off the results. “They’re using one from a company called Chingo. These are all separate companies.”

And there are hundreds of them, they’re called “third-party ad servers.” Some of companies pay websites like Ebay for permission to track you. Others collect the data to help websites, say,  like The New York Times, serve up relevant ads.

It’s vital information for advertisers to figure out where to advertise,” Rodnitzky said.

But giants like Facebook, Google, Apple, and Microsoft want to get rid of those third-party cookies and collect the data themselves, using different technology. Chris Hoofnagle is a privacy expert at UC Berkeley’s Boalt School of Law.

This really has the industry scared because of the hundreds of companies currently using cookies to track people are going to be nudged out,” he said.

There are a couple big forces driving this trend. Cookies don’t work well on mobile, which is becoming more important for advertisers. And then there are privacy concerns. Some fear that third-party-ad-servers -- many of them fly-by-night shops -- can’t be trusted to protect our data.

What’s happening is the privacy risk is changing from 100s of trackers to just a handful of them,” Hoofnagle said.

The word is that tech giants just might start tracking our devices. Hoofnagle says right now, consumers can set their browsers to block cookies. But if your device is being tracked?

People will not be able to block collection,” he said. “So you  have to trust that they’ll use it responsibly.”

The advertising industry has trust issues too. Marc Groman heads up the Network Advertising Initiative, a trade group for third-party ad servers.

We could end up with an Internet truly dominated by a handful of companies who really control the advertising dollars,” he said.

 

About the author

Queena Kim covers technology for Marketplace. She lives in the Bay Area.
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