“Accept cookies” is a box that we all tick pretty much every time we visit a website, just to make the annoying popup go away. Most people probably do so without reading the cookies policies or taking the option to ‘manage cookies’ that some sites offer. Every time you go to a website, you leave a ‘cookie’ which are snippets of code that websites use to track your activity in large part to make your web experience more convenient. It remembers your preferences and your information such as your address for things like forms, which makes the user experience that bit easier as you don’t have to keep re-entering the information.

It’s also the technology that enables things like ‘re-marketing’ which happens when you search for something and then an advertisement for that very item crops up on the next site you visit - could be on a social media platform or a news site. Also, when we click ‘accept cookies’ that data is often resold for things like telemarketing and junk mail which is a privacy issue. Incidentally, there are also some security issues because this information is being stored on your device so if your device is ever stolen or hacked that information can be used for shopping or banking. Cyber security experts recommend regularly clearing cookies on your phone or computer.

The question of privacy online, along with the capture and sale of data, is a hot topic right now with changes in the offing both from the technology companies but also Governments and regulators as they look to clamp down on abuses such as those seen in the recent Cambridge Analytica scandal.

Questions around the use of personal data in advertising especially, have been steadily building up a head of steam. Going into 2020 the advertising industry seemed to be on the brink of a major reckoning on practices, use of data, methods of measurement and the blocking of third-party cookies on browsers and devices. From the release of Apple’s’ Intelligent Tracking Prevention’ for Safari, to the stringent new guidance on consent published by the ICO, to the EU Court of Justice ruling that pre-checked consent boxes for the use of cookies were not valid and the announcement from Google that Chrome would begin blocking third-party cookies by default in 2022.

Then the pandemic struck. And, as with most industries, a lot of issues were put on the back burner as the focus was purely on survival. However, now that a little more certainty is on the horizon with the vaccine roll out and we’ve all spent the best part of a year adapting to the situation, advertisers and marketers are once again turning their attention to the future and what a ‘post-cookie’ world will mean for the industry.

Google’s announcement that Chrome, the world’s most popular web browser, is to block third-party cookies will rewrite the rules of online advertising and make it far harder to track the web activity of users. However, what seems like a big win for privacy may well be an attempt by Google’s to tighten its grip on the advertising industry and web as a whole.

“Critics and regulators argue the move risks putting smaller advertising firms out of business and could harm websites that rely on adverts to make money. For most people, the change will be invisible but, behind the scenes, Google is planning to put Chrome in control of some of the advertising process. To do this it plans to use browser-based machine learning to log your browsing history and lump people into groups alongside others with similar interests.”

Matt Burgess, Deputy Digital Editor, Wired magazine.

Such a major change will impact lots of businesses, from brands advertising products and services online to the ad tech networks and news organisations that propel those ads across the web. Arguably some change and control is necessary as the online advertising industry is comprised of billions of data points about all of our lives that are automatically traded every second of every day.

“They’re going to get rid of the infrastructure that allows individualised tracking and profiling on the web, they’re going to replace it with something that still allows targeted advertising – just doing it a different way. Third-party cookies were awful. They were the most privacy-invasive technology in the world for a while.”

Bennett Cyphers, Technologist, Electronic Frontier Foundation (civil liberties group).

Google’s plan is to switch from third party cookies to an AI system. This new system is called FLoC, which stands for ‘Federated Learning of Cohorts’ if you really want to know, and it takes your browsing history and puts you into groups based on your interests. Advertisers will then be able to put ads in front of people based on the group they’re in. This will mean that, for example, if you like Manchester United then you’ll be in a group with other similarly-mistaken fans. It works in a similar way to how Netflix’s algorithm which works out what you might like to watch based on your viewing history which is similar, but not identical to, plenty of others.

It’s worth noting that this change will only affect third party cookies, which track your history and display ads based on this by sending the data they collect to any third party site to do with as they will. First-party cookies, by comparison, send data back to the owners of the domain you’re visiting at the time. First-party data collection is dominated by Google and Facebook as both companies have powerful tools to collect user information through their own services and the software they provide to others. Google products – from Gmail to Google Maps – are used by more than a billion people each month and Facebook’s tracking tech is on more than eight million websites. So, whilst Google appears to be taking the moral high ground by putting an end to third-party cookies, it’s a move that will actually serve to further entrench Google and Facebook’s ad technology.

Running alongside this is an almighty spat between Facebook and Apple which again points to control and revenues rather than consumer protection. You may have seen the various barbed comments form their respective CEOs and the full-page ads Facebook took out back in December 2020, claiming that Apple was a threat to both small businesses and the open internet as we know it. Zuckerberg also complained that Apple was engaging in anti-competitive practices. His issue is around Apple’s plans for changes in iOS 14.5 which will require developers to request permission from users before they can collect data or track them while they use their apps. This follows Apples previous requirement for developers to disclose what information they collect with the introduction of ‘privacy nutrition labels’ in the iOS App Store.

It would be easy to conclude that this fight is about privacy or tracking, but Apple isn’t going to stop developers from tracking users. Apple isn’t against targeted advertising and if you want to share everything you do online with Facebook, Apple won’t stop you. Apple is just going to require developers to be transparent about what data they want to collect and how they want to use it. They are making developers ask for your permission first. That’s what the real fight is over - transparency. And, it’s why Facebook is so worried.

Facebook’s problem is that it knows that, if given a choice, many people will choose not to allow tracking. A recent survey showed that almost half of all users are likely to opt-out of tracking. Facebook doesn’t want you to think about tracking, and certainly doesn’t want you to have a choice. Tracking doesn’t just affect what ads users see, tracking also allows advertisers to identify which customers came to their site and if they made a purchase based on an ad. This is important because it allows advertisers to track conversions and justify the money they spent on the ad campaign. So, if Facebook can’t track users, advertisers won’t be able to match a purchase with the ad the user clicked on which makes Facebook’s advertising platform much less valuable and might lead advertisers to move their spend to another platform, such as Google Ads. It could just mean that by opting out of tracking nothing really changes for users except advertisers can no longer track conversions. And, ultimately, if first-party data becomes the main way of serving targeted adverts, then the big technology platforms could be the ones that benefit the most.

Paul Bannister of Ad management company argues that such changes will likely mean that more advertising money is spent on platforms such as Facebook, TikTok and YouTube, where targeting within a closed ecosystem will be easier:

“It could be that Google’s ad tech division is at equality with other ad tech companies. The problem is that blocking third-party cookies widens the gap between walled gardens and what they can do versus the open web. It has centralised control of the data with a smaller and smaller group of very large companies, and they are far more likely to misuse the data and harm people in the process.”

Paul Bannister, Co-founder, CafeMedia.

Eliminating third-party cookies will remove some of the ads we see as users and it will push advertisers to rely on logins and user accounts to collect their own first-party data, which is inevitably harder to obtain. Or rely on Google’s and Facebook’s first-party cookies to collect that data for them, no doubt for a fee!