Advertising Technology

Cookies: A Matter of Consumer Privacy or Mass Confusion?

The-Makegood.com_Julia_Casale_ColumnI recently attended the first NAI Member’s Summit—and for anyone unfamiliar with the NAI (Network Advertising Initiative) it is a non-profit organization that represents the interests of a coalition of third-party advertising technology companies committed to the self-regulation of their online interest-based advertising practices; it is also one of the associations that make up the DAA.

Founded in 2000, I would say that the inaugural member’s summit was a milestone event for both the NAI and its member companies; it was also long overdue. The day’s discussion dug deep into everything from the arms race unfolding between ad technology and web browser companies to thoughts on life (for third parties) beyond cookies.

Throughout it all, one theme came up again and again: the crucial yet grossly unaddressed need to educate consumers on what third party cookies do and why it matters. This glaring communications failure has allowed consumer misperception to flourish and in the process has directly contributed to the third party cookie’s precarious future. It is this very ignorance that is used to lobby our lawmakers, many of whom are uninformed themselves.

While we ironically all work in the “advertising” industry, articulating the socioeconomic value of the third party cookie in terms that anyone can immediately understand and relate to has somehow eluded us.

Public criticism of the third party cookie has led many ad tech firms to resort to a defensive position in communications and otherwise remain tight-lipped about their practices concerning data collection and use, isolating any disclosures to the fine print of their web privacy policies. This obscurity only serves to further propagate the negative stigma associated with cookies.

We live in an age where consumers are in the driver’s seat of their experiences and expect to be active participants in the marketing dialogue. Lack of transparency is profoundly at odds with this reality. Our approach needs to respect the consumer if it is to be successful. Transparency about data collection, control, and choice mechanisms including DNT is nowhere near the place it should be. By and large we are keeping consumers in the dark.

It is human nature to fear what we don’t know or understand. Without effective proactive communication about what data is collected, what the actual mechanism is, and what is done with it, the mind is left to wander…“if somehow, some company knows that I looked at (fill in the blank), what else do they know? My email password? My credit card number? My address?” What the general public needs to know is that the cookie cannot contain any of this information by its very design. The only time a cookie can be tied back to personal information is when such information is freely given by the user – and stored in a first party context. How it is used at that point is a matter of first party policy.

The cookie is probably the most elegantly private way to make the Internet work for both marketer and publisher, while keeping control directly within the consumer’s grasp. Many of the summit delegates agreed that if consumers actually understood what third party cookies did, it’s likely that they wouldn’t care.

As a whole, our industry has been ineffective at translating how online advertising improves our lives in meaningful ways through tangible examples. The third party cookie is the backbone of a multi-billion dollar industry. There are mid-to-small sized publishers whose very business models rely on the revenue generated by third party placed advertising. With so much supply and fragmentation, interest based advertising has been an effective way to capture value and sustain the free web. Considering what is at stake it’s amazing that we are in this position today.

While we are slowly witnessing the beginnings of improved trust measures thanks in large part to self-regulatory efforts being spearheaded by the DAA, a tipping point in consumer perception has yet to be reached.

Industries outside of the ad tech space have both faced and successfully overcome similar challenges. For example, the American Plastics Council, who in the face of plummeting market share and rising environmental activism launched a ‘Plastics Make It Possible’ campaign to stop the decline in consumer attitudes towards plastics and overhaul the industry’s image. In the end, equity was restored by focusing communication on the positive emotional reasons for supporting plastics, making it possible for the plastics industry to redefine the debate.

Does ad tech need to take a similar approach? A consumer privacy campaign of that magnitude would require not only the right brand positioning, but enough funding and cross-industry support to reach the masses at scale. Brands, agencies, ad tech firms, and publishers all have a stake in consumers’ perception of digital advertising technologies; we should be combining our collective funds, and generously donating premium media, and strategic communication and creative services to harness the wealth of expertise within our community to incite positive change.

If we are committed to transparency and a higher bar, what are we doing to convey this? Trust is reinforced when we communicate openly, proactively and in simple terms.

As technology evolves to address new requirements and a changing ecosystem including areas in which the cookie itself may be inherently limited—privacy issues and the matter of consumer transparency and choice will prevail. Cookies have been our friend for a long time, but new technologies will inevitably rise up to replace it.

The big problem for consumers is that new technologies will not be as elegantly simple, transparent or secure. There will be no universal standard. There will be no inherent level of user control, which will put the industry and consumers back at least 15 years. The challenge once again becomes consumer education—a necessity to demonstrating value and building trust.

This is an opportunity to raise the bar about how we approach privacy; an opportunity to do a better job at communicating the value of data to consumers. Ultimately if we can shift the issue of privacy from law-based to a matter of corporate governance and embrace as an industry shared values of promoting privacy rather than getting hung up on the difference between tracking in a first party vs. third party context, we will all stand to benefit.

Julia is a contributor to The Makegood and Chief Marketing Officer at Casale Media.

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