Last week, Microsoft announced that they will develop their own tracking technology to replace third-party cookies, enabling tracking across desktop computers, tablets, smartphones running Windows OS, as well as Microsoft’s Xbox gaming console, any Internet Explorer browser and Bing search engine usage.
This announcement comes on the heels of a similar report from last month, which suggested that Google is developing an alternative tracking technology that would replace third-party cookies to measure across Android smart devices, as well as Chrome browser and Google search activity. A Google spokeswoman confirmed that report, and elaborated that they are exploring a number of options. And earlier this week, Google made news again in a report outlining their efforts to improve mobile tracking, referencing the company’s Screenwise panel announced last year that will compensate consumers for allowing Google to monitor and detail their mobile behavior.
Both Google and Microsoft’s tracking indicatives follow a rapid degradation of the third-party cookie, which has served as the keystone of digital advertising to-date. Three trends in the industry are driving the shift away from third-party cookies, and in the process encouraging—if not facilitating—how media giants capitalize on their mountain of consumer data:
- Increased cross-platform consumption of video content, which in turn elevates the importance of cross-platform measurement for a $205.51B TV industry, according to ZenithOptimedia—where cookies do not operate
- The evolution of smart devices with the accompanying growth of mobile consumption, which now according to eMarketer, makes up 17.3% of web usage, where cookies are largely ineffective
- Increased attention on consumer privacy—Annalect’s Q2 Online Consumer Privacy Study found that roughly half of Internet users are concerned or very concerned about their privacy—coupled with the Internet and advertising community’s inconsistent DNT or opt-out standard
What’s happening and what does this mean for marketers? In the summer of 2012, Annalect CEO Scott Hagedorn wrote about the increasing “vertical integration” of media companies for the Wharton Future of Advertising Program. In this article, Hagedorn predicts how large media companies will integrate their consumer technology into Vertical Advertising Stacks.
For those of you who attended this week’s 4A’s Data Summit, you heard Hagedorn reiterate the perspective that, counter to some people’s belief that data is putting more power in the hands of buyers, in fact, we are seeing a shift back towards power in the hands of sellers. Large media companies such as Google, Microsoft, and Apple, as well as Facebook and Amazon, stand to control a large percentage of consumer data—making it more difficult for marketers to:
- Measure and target advertising across these media ecosystems
- Protect their own data, while leveraging it to improve marketing effectiveness
- Avoid the days of ad networks—where data opacity allowed networks to game data and artificially increase media expense—replicating itself in a video-driven ecosystem
Data interoperability and systems integration will be the key to success, and thus is an increasingly important, yet challenging issue. There is a delicate push and pull between the necessity for open systems enabling cross-channel (and cross-device) targeting and measurement, with publisher desire for a closed ecosystem, data protection, and consumer concern around privacy. The marketer’s challenge is identifying a trusted solution that can access these disparate ecosystems in innovative ways.
If you would like to have a further conversation on these industry trends or to discuss data policy more broadly, please contact firstname.lastname@example.org.