Tech Giants Plan to Track Data, Eliminate Need for Cookies

In the past, cookies — tiny pieces of code used by marketers to track online activity — were essential to advertising companies collecting user information. However, Google, Microsoft and Apple have recently announced that they plan to develop new ways to control this valuable data without the use of cookies. This change could shift the balance of power in the global digital advertising realm, and cause stress to some ad technology companies.

“The Silicon Valley trio, which produce browsers, email services and operating systems used by billions across many devices, are positioned to potentially learn far more about people’s activities than cookies ever could. Today, a diverse ecosystem of companies places cookies on websites to track people through browsers; now the giants see an opportunity to get into tracking themselves,” explains The Wall Street Journal.

“There is a Battle Royal brewing,” says Scott Meyer, chief executive of Evidon Inc., a company that helps businesses track cookies on their websites. “Whoever controls access to all that data can charge rent for it — and has a tremendous advantage going forward.”

The technological landscape is changing, and mobile devices are more popular than ever. Cookies cannot be utilized to track activity on smartphones and tablets, and advertising companies yearn for that information. The major Web companies may have solutions.

“Microsoft announced in a blog post that the company will give marketers the ability to track and advertise to people who use apps on its Windows 8 and 8.1 operating system on tablets and PCs. The company will do this by assigning each user a number — a unique identifier — that monitors them across all of their apps,” reports WSJ.

Microsoft could then sell this data to advertisers or use it to show demographic trends, such as game players under 40 who check sports apps. Apple is also allowing advertisers to track users on mobile devices with a unique ID.

Google also wants to track users with an ID, but the company’s system would be more far-reaching. “Google’s system could tie together data about users across all the company’s products — Gmail, the Chrome browser and Android phones.”

Facebook’s new ad service also avoids use of cookies by doing its own tracking. “When a person visits a website selling shoes on a work PC, a piece of Facebook code placed on that site — Facebook’s own cookie — recognizes that the person has logged into Facebook using that browser before. The shoe seller can then send the person an ad for the shoe on Facebook’s mobile app — even if that person never registered with the shoe seller,” explains WSJ.

“Wherever your audiences are, if they are offline in the real world, on your website, or on your mobile app, you can reach them on Facebook,” says Scott Shapiro, a product marketing manager at Facebook.

Discarding the use of cookies may prove beneficial, for cookies involve serious limitations. They can store rich information about users on Web browers, but they cannot communicate with each other, making it difficult to distinguish between users. These inaccuracies have come to be known as “cookie loss.”

“As a result, at least 20 percent of the data is inaccurate,” says Michael Schoen, executive VP for product at advertising firm Mediabrands.

“The amount of bad data is growing because more consumers are deleting cookies or enabling ‘do not track’ features on their browsers,” states WSJ.

Unique IDs would definitely provide more accurate information than cookies. However, there is concern that the efforts of these tech giants will lead to a more invasive advertising culture. Nonetheless, the tracking of user info is not specific to Google, Apple, and Microsoft, for other industries such as banking and the government use such methodology to sell credit cards or promote campaigns, respectively.

Despite this shifting landscape, it is not probable that the cookie will totally disappear. “It’s not trivial to replace a piece of underlying technology on which the entire Web depends,” says Zach Coelius, CEO of Triggit Inc., an online advertising company that purchases ads from Facebook, Google and other sites.