Why It’s Difficult to Do Away with Cookies

In today’s digital age, cookies play a critical role in the functioning of the internet, particularly in online advertising. These small pieces of data stored on users’ browsers have become indispensable for various stakeholders, from advertisers to government agencies. Understanding the complexities and dependencies surrounding cookies helps to explain why eliminating them is such a challenging proposition. Despite four years of threats, tests, research, and experiments, culminating in the deprecation of cookies on some browsers since January 2024, Google has finally decided to discontinue its quest to be the ‘cookie monster.’ Using cookies for tracking, personalizing, analyzing, monitoring, measuring, and controlling digital advertising across multiple media is simply too pervasive and effective to be discontinued or replaced.

Personalization of Ads

Cookies are the primary tools used by advertisers to deliver personalized ads to users. Advertisers use first- and third-party cookies to collect consumer data, create user profiles, and serve ads to potential customers based on these profiles. Cookies allow advertisers to serve relevant and useful messages tailored to individual users based on their interests. Without cookies, the ability to deliver such personalized content would be significantly hampered, leading to less effective advertising and potentially a less engaging user experience. Most studies, including my recently completed case study on consumers’ perceptions of personalized advertising, confirm that personalized ads attract more attention, generate higher click-through rates, increase purchase intention, and improve the user experience. However, these same ads evoke feelings of being tracked, stalked, surveilled, and manipulated. Ultimately, consumers express significant concerns over advertisers’ collection, sharing, and use of their information, leading to substantial backlash and resistance to the ads.

Government Surveillance and Data Tracking

Beyond commercial use, cookies are also instrumental for government agencies. The Government relies on third parties and data brokers who use cookies to track users and implement various surveillance strategies. This tracking capability enables governments to monitor online activities, contributing to national security and law enforcement efforts. The reliance on cookies for these purposes means that removing them could impact government operations and the ability to track and prevent online and offline illicit activities. The Government relies extensively on the advertising industry to share collected data about people’s locations, purchase behaviors, interests, search histories, and other data collected through first- and third-party cookies. For example, the US Government is currently scouring through the browsing habits of the shooter who attempted the assassination of former President Trump to determine his motive. In his book “Means of Control,” Byron Tau refers to the advertising ecosystem as the most extensive data collection system ever conceived and characterizes the data collected as “Ad Intelligence.” There is no substitute for this data. How will the Government investigate these crimes without the means to track and surveil citizens?

Digital Advertising Ecosystem

The entire digital advertising ecosystem hinges on the use of cookies. Advertisers, publishers, and ad tech companies rely on cookies to serve ads, track their performance, and optimize campaigns. Cookies enable detailed analytics that help advertisers measure the effectiveness of their ads, understand user engagement, and make data-driven decisions to improve future ad performance. Without cookies, these insights would be harder to obtain, potentially reducing the overall efficiency and profitability of digital advertising. Additionally, publishers and other intermediaries profit from personalized ads for interested users. Personalized ads receive more clicks than generic ads. Therefore, personalized ads generate more traffic for the advertiser and more revenue for the publisher and other network partners.

Challenges and Alternatives

Despite growing concerns over privacy and the push for more stringent regulations, finding viable alternatives to cookies remains a significant challenge. Some proposed solutions, like first-party data and contextual advertising, offer partial replacements but lack the comprehensive tracking and targeting capabilities that cookies provide.

Moreover, implementing these alternatives requires significant changes in digital advertising infrastructure. This transition involves substantial investment in new technologies and methodologies, which many businesses might find burdensome. The industry’s dependency on cookies is so entrenched that moving away from them would disrupt established practices and revenue models.

The Bottom Line

While the desire to phase out cookies is driven by legitimate privacy concerns, the reality is that the current digital advertising and data tracking ecosystem heavily relies on them. Ad personalization, government surveillance, and the overall functionality of the digital advertising ecosystem are all deeply intertwined with cookies. Finding a balance between personalization and the privacy concerns of various stakeholders remains a complex and ongoing challenge. Until viable alternatives are widely adopted and proven effective, cookies will likely remain a vital component of the online landscape.

Digital advertisers may breathe a sigh of relief, but this is not the time to rest on our laurels. Whether or not advertising platforms phase out cookies, consumers are still concerned about their privacy. They are taking actions such as lobbying for regulations and using ad blockers and VPNs to deny advertisers the ability to collect their data to personalize ads. These actions cost the industry billions of dollars in wasted ads and lawsuits. First-party cookies remain the best strategy to personalize ads, build loyalty, and create a competitive advantage in your marketing. Additionally, marketers will need to become more transparent about their data management practices, respect consumers’ choices when they opt out of data collection on our web properties, implement frequency caps on ads to minimize the feeling of being stalked, diversify their ads to minimize ad irritation, and build trust with consumers to prevent them from blocking or ignoring your ads.

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