Tracking Users in the Post PC Digital Era

The End of ROI? The death of third-party cookies is underway. Changes in technology, legislation, and growing consumer awareness are making third-party cookies – the ubiquitous lynchpin of digital advertising – less reliable than ever.  At the same time, leading companies such Microsoft and Facebook have announced initiatives that limit data access to parties outside their ecosystems or force advertisers to use their platforms.

The decline of third-party cookies has been foreshadowed for a long time, spurred by privacy concerns and browsers increasingly blocking them by default. But, nothing to date has threatened them as much as consumer adoption of a multi-device digital lifestyle.  Third party cookies don’t really work across devices like tablets and smartphones, except in very specific and limited cases.  As use of these devices surpasses use of the PC  the data generated by – and the audiences identified by – third party cookies becomes less reliable and less comprehensive. So, if we have built an industry based on relatively wide-open and liberal access to third party cookie data, and this data goes away, what comes next? Unfortunately, the news is not all good for advertisers or their agencies.

Meet the New Boss, Same as the Old Boss

In the new, multi-device world, there are really only a few companies that have the ability to marry a consumer with all of their device usage, build a rich and targetable profile for advertisers, and provide opportunities to reach them on all of these devices in a way that offers scale. These companies are Google, Apple, Facebook, and Microsoft. Some might also include Amazon and Twitter in the mix, although they have a bit more work to do than the aforementioned companies. These names may sound familiar to you if you have been involved in digital marketing for any amount of time.

Instead of having a cookie file resident on the client PC to track what sites you’ve visited, these companies will log your activity on their own servers as you are logged in to their various services through your PC, smartphone, tablet, and in some cases smart TV.  And, consumers will readily welcome this exchange or risk losing the underlying services that they value so much. Want Gmail? Agree to be tracked. Want Facebook? Agree to be tracked. Want Apple’s great suite of products and services? You get the idea.

To Log in or not to Log in – That Is the Question

So will users willingly give up their data by logging in, providing these few companies with real data, including their real identity, home address, email, phone number, location, and other information, locking out others in the process? The answer so far seems to be quite possibly yes, with users opting to use these services across devices in greater and greater numbers and these companies already owning a disproportionate share of the online ad spend.

It’s a simple equation of value exchange, the crux of all successful digital encounters: users offer their information in exchange for the free usage of an online service (Gmail, Facebook) and they agree to be served advertising based on their usage habits as a result. Trusted companies such as Google and Apple have the ability to link people across different devices, in different places, with different content and bring together the whole picture for advertisers. This will be critical to understanding ROI as more and more users split their time between devices.

But what about companies purporting to create “profiles” of users based on anonymous information? Surely this is an opportunity to wrestle some of the future advertising spend away from these behemoths? Perhaps, but in general the level of accuracy and data quality will be far superior from a Google or Facebook than data derived from wifi access points or other third party systems. People provide real data – and lots of it – to these companies and anyone that knows anything about data modeling knows that accurate and voluminous data makes for highly predictive models. These companies will just be smarter about what we want, when we want it, and what works for advertisers. Google, Facebook, Apple, and Microsoft have the systems that will allow a multi-device profile to be built. They have the scale to reach thousands if not millions of users. And, they have the services that will get users to agree to providing an ongoing stream of personal data that third party cookie based data aggregators can only dream about.

Smart advertisers are beginning to look at the opportunities afforded by these companies and are working to understand how this will reshape their approach to digital advertising in the years ahead as consumers continue to embrace a multi-device world.  We at Beeby Clark+Meyler believe there are significant opportunities to get a jump on how to do this well – before the cookie crumbles.