LAST UPDATED: 5 March 2021<\/p>\n\n\n\n
For decades, the internet has been underpinned by the humble browser cookie\u2014a small data file installed by a web browser on a user\u2019s computer as they browse the internet. These seemingly innocuous little files have allowed the modern web to develop into what it is today by allowing publishers and site owners to track which products have been added to an online shopping cart, whether a visitor to their website is new or returning, how many times a user has seen an advertisement or to save their data for the next time they need to fill in a form.<\/p>\n\n\n\n
Before cookies, each page load on a website was effectively an isolated event, completely unrelated to any other activity by the user on the website. Cookies allowed websites to string events together to create functionality and utility.<\/p>\n\n\n\n
In the early nineties, websites were not particularly good at commerce. Unlike a brick & mortar store, websites had no mechanism for identifying whether the user was simply browsing, if they had returned to the site several times or even if they had shown interest in a product.<\/p>\n\n\n\n
First conceptualised in 1994 by then-Netscape<\/a> employee, Lou Montulli<\/a>, as a method to support virtual shopping carts, the cookie was rolled out on Internet Explorer in 1995 and almost immediately became a hot topic due to the potential privacy implications.<\/p>\n\n\n\n In the subsequent decades, the cookie has gone on to make the modern web as we know it possible. From ad serving to web analytics, e-commerce to website personalisation, virtually every web application makes use of cookies to varying degrees.<\/p>\n\n\n\n If you\u2019ve spent any time around ad tech conferences or on \u2018media Twitter\u2019 in the last few years, you will have almost certainly heard someone refer to “the death of the cookie”<\/em> at some point.<\/p>\n\n\n\n While it dominates the conversations in ad tech circles and the conference circuit today, you could argue that the death of the cookie began almost immediately after it\u2019s invention; by 1997, the browser cookie had already been the subject of two Federal Trade Commission hearings<\/a> in the U.S.<\/p>\n\n\n\n By 2000, the U.S had implemented strict rules on the use of cookies after it emerged that they the Drug Policy Office was using cookies to track people who interacted with their ads and, in 2002, the European Union had issued the Directive on Privacy & Electronic Communications<\/a> which required that websites gather a user\u2019s consent prior to installing cookies on their device.<\/p>\n\n\n\n Savvy publishers simply wrote into their cookie policies at the time that by accessing their sites, a user had effectively agreed to consent to cookies and the laws were ultimately tightened up with the GDPR laws introduced in 2018 to require that consent is \u2018explicit, freely given, specific and informed\u2019<\/a>. The U.S. followed soon after with the California Consumer Privacy Act of 2018 (CCPA)<\/a>, giving Californian citizens more control over what businesses are able to do with their personal information.<\/p>\n\n\n\n However, all of this legislation has proven somewhat toothless since the laws were written and the biggest sea change seems to have been self-imposed by the tech vendors, arguably those with the most to gain from a privacy-first approach. The impetus of this shift in focus has its roots in the narrative that modern internet users expect and demand privacy to be baked into the user experience. However, the cynical among us would note that without third-party cookies, Google, Facebook and Apple all have a competitive advantage in terms of being able to continue to carry out accurate attribution within their own \u201cwalled garden\u201d platforms and indeed, the UK government agreed as much in their study of the role of data in digital advertising<\/a>.<\/p>\n\n\n\n Nevertheless, in 2017\u2014as part of their release of iOS 11 and macOS 10.13\u2014Apple introduced the first iteration of its Intelligent Tracking Prevention (ITP) feature within the Safari browser in an effort to limit companies\u2019 abilities to track people around the web.<\/p>\n\n\n\n In June of 2019, Mozilla announced that new installations of their Firefox browser would have their Enhanced Tracking Protection<\/a> set on as default, blocking all \u201cknown third-party tracking cookies\u201d<\/p>\n\n\n\n While these certainly had an impact, Firefox and Safari collectively have around 21% market share<\/a>. The majority of internet users (61%) access the internet with Google Chrome. And in January 2020, Justin Schuh\u2014Director of Chrome Engineering\u2014released a blog post that outlined Google\u2019s future plans for third-party cookies<\/a>. In it, he described how Google would be phasing out support for third-party cookies \u2018within two years\u2019, effectively ushering in the death of the cookie.<\/p>\n\n\n\n In response, March 2020 saw Apple roll out the latest version of ITP<\/a> which\u2014similarly to Google\u2014now also blocked all third-party cookies<\/a> but did so a full 2-years earlier than Google\u2019s proposed release.<\/p>\n\n\n\n In a sign of the times, the IAB has sunsetted DigiTrust<\/a>, the non-profit platform it developed to allow SSPs, DSPs and publishers to share and sync cookies and improve match rates.<\/p>\n\n\n\n Broadly speaking, a \u2018persistent\u2019, \u2018unified\u2019 or \u2018shared\u2019 identity solutions were originally conceptualised as a mechanism for the open web to take on the walled gardens of Facebook and Google. However, they have rapidly evolved into the ad tech ecosystem\u2019s response to the prospect of a post-cookie web. Early iterations were still cookie-based and were designed to improve inefficiencies in existing match rates.<\/p>\n\n\n\n Most recently, it is an attempt by various private enterprises to standardise the tracking and targeting of users in a so-called \u2018privacy-first\u2019 approach and without the reliance on third party cookies.<\/p>\n\n\n\n Any publisher who has pulled a CPM-by-browser report recently will be able to tell you what impact the Safari ITP releases have had on their CPMs. The initial ITP 2.x updates saw publishers lose up to 40% of their revenue<\/a> on the open exchange against their users on Safari, while Rubicon reported their publishers lost as much as 60% of their Safari revenue<\/a>.<\/p>\n\n\n\n Google themselves performed a study on the top 500 global publishers to quantify the effect that disabling access to third party cookies would have on the programmatic advertising revenue of those publishers. The result demonstrated that the test publishers lost 52% of their programmatic revenue<\/a>. Although when the UK Competition & Markets Authority (CMA) procured the source data of this same experiment from Google to reanalyse themselves, they found a reduction in revenue of 70%.<\/p>\n\n\n\n From a marketer\u2019s perspective, navigating digital channels in a post-cookie world is equally challenging. Littledata found that e-commerce stores lost 8% of marketing attribution<\/a> for searches on Safari mobile.<\/p>\n\n\n\n There is no single answer to this question. Some identity solutions still rely on cookies although, for obvious reasons, these have a limited shelf life. Others rely on encrypted email addresses.<\/p>\n\n\n\n Outside of the privacy implications, there are several reasons why a unified ID can actually be a superior solution to cookies. Not least of which is the elimination of cookie syncing.<\/p>\n\n\n\n Under the current setup, when a user visits a website, multiple ad tech vendors (SSP, DSP, DMP) all have their own unique cookie ID for that user, which they have to synchronise with each other in real time; a process known as cookie syncing.<\/p>\n\n\n\n As there currently exists no standardised ID for each of these vendors to adhere to, the cookie syncing process can dramatically slow down the loading of the web page and have an adverse effect on the match rates. In this example from The Trade Desk, they have illustrated how an advertiser\u2019s target audience can be reduced by over 50% as a result of these cookie syncing inefficiencies.<\/p>\n\n\nTHE DEATH OF THE COOKIE<\/h2>\n\n\n\n
WHAT IS AN IDENTITY SOLUTION?<\/h2>\n\n\n\n
WHY ARE ID SOLUTIONS NEEDED?<\/h2>\n\n\n\n
HOW DOES ID SOLUTION WORK<\/h2>\n\n\n\n