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How First-Party Cookies Might Fix Targeting:

Advertisers have been looking for solutions to replace the lost tracking and conversion data from the deprecation of third-party cookies. One approach that has gained attention is the use of first-party cookies and shared identifiers built by ad networks and consortiums. 

The idea has two pieces:

  1. Participants in consortiums can effectively pool their first party data.
  2. If these consortiums can gather enough shared first-party cookies, they will have near-universal identifiers that can replace the functions of third-party cookies.

There are several reasons why this approach may not be as effective as marketers would like.

Problem 1: Low Coverage:

First, the coverage of shared first-party cookies is currently low and is expected to remain so in the future. When it comes to using shared first-party cookies as a replacement for the lost tracking and conversion data from the deprecation of third-party cookies, the coverage of these cookies is a crucial factor. If the coverage of these cookies is low, it means that not all users will have the same identifier, making it difficult for advertisers to track and target them effectively.

One of the main reasons for the low coverage of shared first-party cookies is that they are only collected from users who have visited the websites of the ad networks and consortiums that are building these identifiers. This means that users who have not visited these websites will not have a shared first-party cookie, and thus will not be included in the coverage.

Additionally, even among users who have visited these websites, not all of them will have enabled cookies or will have cleared their cookies, resulting in a lack of coverage.

Furthermore, as privacy concerns continue to rise, more and more users will opt out of cookies, or use browsers and devices that block them, which will further decrease the coverage of shared first-party cookies, which could break site functionality and discourage sites from participating once they experience a degraded user experience. .

In summary, the coverage of shared first-party cookies is currently low and is expected to remain low in the future due to the limited number of websites collecting them, the number of users who clear their cookies, and the increasing number of users who opt out of cookies. This low coverage makes it difficult for advertisers to effectively track and target users, making the universal identifier not valuable if they aren’t universal.

Problem 2: The Market is Fragmented:

Second, the universal identifier market is large and fragmented, which means that a large number of identifiers must be used to increase coverage. When the market is fragmented, it means that there are multiple players trying to create and use their own universal identifiers. Each of these players is trying to gain scale by getting enough users to adopt their identifier, but because there are so many players, none of them are able to achieve the scale needed to build an effective solution. This results in a situation where no one wins because no one gets enough scale to build an effective solution.

This is problematic for advertisers because it means they would have to use multiple identifiers to increase coverage, which can be a costly and time-consuming process. Additionally, using multiple identifiers increases the complexity of the tracking and targeting process, making it more difficult for advertisers to effectively reach their target audience.

Problem 3: Apple Won’t Allow Loopholes:

Third, if a few identifiers do achieve scale, they will likely face repercussions from Apple, which is explicitly against “cross-site tracking,” as well as regulatory attention at both the state and national levels. The use of identifiers that are opaque to consumers violates the principles that prompted Apple and others to take a hardline stance against third-party cookies. It is unlikely that they will allow a loophole large enough to circumvent their efforts.

Apple’s reasoning for the deprecation of the UDID and third-party cookies is based on the principle of user privacy and control. The UDID, which is a unique identifier for each device, was used by advertisers to track users across different websites and apps, which raised concerns about the privacy of users’ data. Similarly, third-party cookies were used to track users across different websites, which also raised privacy concerns. 

In response to these concerns, Apple has taken a hardline stance against cross-site tracking and has developed new technologies like the Intelligent Tracking Prevention (ITP) feature in Safari, which blocks third-party cookies and limits the ability of advertisers to track users. The roll out of App Tracking Transparency (ATT) has restricted tracking access for most users because most users opt out. 

Efforts to replace legacy identifiers with something new, such as shared first-party cookies and universal identifiers, are likely to encounter resistance from Apple and privacy regulators because they still involve tracking users across different websites and apps, which violates the principles of user privacy and control.

Apple and privacy regulators could take several steps to address these concerns. One approach could be to develop new technologies that allow for more transparent and user-controlled tracking, such as allowing users to opt-in to sharing their data for tracking purposes. Another approach could be to develop new standards for data privacy that all ad networks and consortiums must adhere to.

Advertisers should look beyond identifiers:

Instead of focusing on first-party cookies and shared identifiers, the market would be better served by solutions that understand user intent in a privacy-friendly way. These solutions can work without the need for private consumer data, or they can give consumers clear mechanisms to control the use of their data in targeting.

Inuvo’s IntentKey AI for example, is a technology that aims to understand consumer intent by crawling the web and building an intent graph of all the content that consumers view. The intent graph is a comprehensive map of consumer behavior and interests, which is created by analyzing the content that users interact with online.

By understanding consumer intent, Inuvo’s IntentKey AI can help businesses and marketers focus on targeting the intent rather than the user. This allows for more effective and efficient advertising and marketing campaigns, as it ensures that the right message is being delivered to the right audience at the right time.

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