The Challenges of Cookie-Based Technology in Ad Tech

Web cookies dominate the digital marketing landscape. For the majority of online advertising, cookies are the basis for targeting ads, tracking exposure, understanding audience activity, and building audience segments.

Cookies are small packets of data created when a consumer visits a web page. Cookies are generated by the page itself and any embedded content on the page, such as ads. Ad cookies are accessible to the advertiser, providing critical insight into ad exposure and consumer browsing behavior.

If for whatever reason cookies could no longer be used to empower online advertising, over 90% of digital marketers today would find themselves facing serious operational difficulty. In a word: paralysis.

However, challenges have emerged that affect the reliability of cookies for targeting and measuring digital advertising. Considering that cookies are so fundamental to the digital ad ecosystem, threats to their viability are a serious concern. These include:

1. Cookie blocking: certain browsers (e.g., Mozilla and Safari) have disabled third-party     cookie support.

2. Cookie deletion: users or cyber security apps may delete the web cookies immediately     after online activity.

3. Multiple device use: when consumers use multiple devices to go online, cookie-based     insight into their activity becomes fragmented.

4. Multiple users on same device: cookies cannot distinguish between consumers who     use the same device (e.g., family desktop computer).

5. Mobile Internet visibility: mobile app activity does not generate cookies.

6. Distortion in web activity arising from bots: non-human web activity is responsible for     a generous portion of web cookies. This distorts insight into actual user behavior.

7. Problems with frequency capping: advertisers seek to limit the number of times they     serve an ad to any given consumer. Because cookies from multiple devices cannot be     linked back to a common user, consumers can be inadvertently overexposed to digital     ads, reducing campaign efficiency.

8. Problems with attribution: to accurately track online consumer activity from ad     exposure to conversion using cookies, the device and browser combination must be     the same across the entire journey. Activity that occurs on different devices or     browsers makes this a challenge.

9. Regulatory restrictions: heightened public awareness around online privacy has put     web cookies under legislative scrutiny. It may become more challenging to deploy     cookies at scale as regulations evolve.

10. Challenges reaching younger consumers: Millennials and Gen Z, market segments       with growing commercial influence, are particularly resistant to cookie-based ad       techniques due to their disproportionate use of multiple devices and mobile apps.

In our next post, we will review developments in cookie-less audience measurement tools for brands and agencies, and discuss the advantages of these new approaches.

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