Advertisers Reinvent the Cookie to Better Track Streaming TV

Reaching viewers on streaming media is now a double-edged sword: advertisers want better metrics and the ability to target their messages even as the issue of privacy has also come to the fore. What’s becoming clearer is that any tools to provide metrics will need to obtain viewers’ consent. Until now, advertising has depended on tracking cookies and retargeting to follow people from website to website, which sparked the rise of ad blockers. Now, new privacy regulations in Europe and California are forcing a change.

The Wall Street Journal also notes “efforts by Apple and Alphabet’s Google to weaken some tools on which advertisers, publishers and ad-technology companies have come to rely.” As General Motors Company assistant manager of audience buying strategy David Spencer states, “the industry as a whole cannot take the privacy of consumers for granted and make the same mistakes that were made on the Internet decades ago.”

More people are watching streaming programing on smart TVs and many of them don’t realize that that their choices are being analyzed with automated content recognition (ACR) technology, which “works whether viewers are streaming programming, watching with a traditional pay-TV source such as cable or even using rabbit-ear antennas.”

“The average consumer does not understand that a smart TV can track what they do,” said Innovid chief technology officer Tal Chalozin. “At some point, there will be a regulatory intervention or some effort to bring back control to ensure a user identity does not get passed back to parties unless they say so.” 

In fact, in 2017, Vizio settled such a lawsuit with the Federal Trade Commission, in part by agreeing to “obtain express consent for collecting data.” Vizio VP of platform services Travis Hockersmith reports that, “this is done through the company’s data operation Inscape, which licenses that data to measurement companies, TV networks, ad agencies and ad-tech vendors that Vizio has vetted.”

Opt-out is now the default setting on Vizio TVs, but more than 16 million owners representing 90 percent of all users have opted in.

Alphonso chief product officer Raghu Kodige explained why users will opt in to tracking. “The focus has to shift to providing services that truly benefit consumers,” he said. “And if they decide the benefits they’re getting does not merit a structure where data is being collected, they should be able to limit it.”

One potential solution comes from ad tech company Trade Desk, which is developing a “user-identity framework called Unified ID 2.0 that aims to harness encrypted email addresses from publishers that have logged-in users,” a system that could be used by connected-TV app makers. But, notes WSJ, “if the popularity of streaming TV brings new scrutiny of ad practices and perhaps new regulation, executives say there will be winners and losers,” especially regarding the vendors that are in the middle of a supply chain and “don’t have direct access to users from whom they could obtain consent and get direct data.”

Coalition for Innovative Media Measurement chief executive Jane Clarke said that, “those that have some form of ownership over the data will be in the driver’s seat.”