The Cookie Conundrum

Arcane Blog Post

The Cookie Conundrum

The Cookie Conundrum

What’s been dubbed as “Google’s latest chess move” was revealed this week when they announced that they will not be replacing third-party cookies with another personalized identifier. Their solution moving forward will be tracking on a cohort level with Federated Learning of Cohorts (FLoC).

Since Google’s initial announcement to sunset cookies a year ago, publishers, advertisers, and alternative ad-tech partners scrambled to find solutions to ensure the survival and enrichment of the Open Internet.

The FLoC solution seems to be strategically positioned with the onslaught of legislation and political involvement to stem gross missteps on consumer privacy by Big Tech. In short, consumers have spoken. And they’re not happy about the way their data is utilized by Walled Gardens.

92% of Canadians express some level of concern with their data privacy and 37% express high levels of concern. But what most users don’t understand is the quid pro quo nature of the Internet. It’s an unspoken contract: consumers are willing to provide a certain level of personalized data in exchange for free content. The flip side? Subscriptions.

It’s simple: if you don’t want ads, you have to pay.

This move by Google is strategic for addressing imminent legislation, but also because the revenue they make from their Owned & Operated properties is far more than what they make from the Open Internet.

But Google’s FLoC, while being an innovative and useful idea, still posits a problem. It won’t be able to pay off the value exchange of the Internet in the same way that cookies did or how some of the propositions from other tech partners will. And maybe they don’t care. Their strategic priorities are to build their O&O properties and further solidify and heighten their walled gardens.

And data scrutiny has been echoed not only by consumers, but by other tech giants too. Apple has been vocal in condemning organization’s whose business models are predicated on vast troves of personalized data. In a recent speech in Brussels marking International Data Privacy Day, Apple CEO Tim Cook went on the offensive, taking direct aim at Facebook without ever mentioning the company by name:

“Technology does not need vast troves of personal data stitched together across dozens of websites and apps in order to succeed. Advertising existed and thrived for decades without it, and we’re here today because the path of least resistance is rarely the path of wisdom. If a business is built on misleading users on data exploitation, on choices that are no choices at all, then it does not deserve our praise. It deserves reform. A social dilemma cannot be allowed to become a social catastrophe.”

We’re at a critical nexus in time when we must evaluate the advertising model as a whole and align ourselves with the values and philosophies that we believe are best for our industry. Do we value the Open Internet? Do we value fact-checked journalism during a time of rampant miscommunication, polarization and fake news? Are we willing to invest in a new and agnostic solution?

One thing is for sure: change is coming. Though we don’t have any silver bullet solution yet, it’s important for brands to take control over their data strategies to ensure they’re making the most out of their media dollars. Let’s explore Google’s solution, but let’s also explore challenger solutions like Unified ID 2.0. Just like anything else – we need to test and learn in this new environment before making any blanket recommendations. Now’s the time to work together and solution the best way forward, one in which each partner in the ecosystem benefits.

Want to learn more about Arcane? Get in touch

Jeff Hemphill