It’s the end of the world as we know it!

Everyone has heard the scuttlebutt about third-party cookies. Most folks in our industry are in favor of cookies since virtually all the monetization strategies publishers and advertisers leverage rely on them to make the connection with the consumer. If you have been to a conference in the last few years you have heard panels on topics from privacy to behavioral targeting, consumer recommendations to opt-out bantering back and forth about cookies and how to protect the consumer. Sadly it has all been talk and no action. All the while, a dark cloud (the FTC) has been looming over our industry highlighting the need for better self-regulation. The large portals and media companies along with the IAB have been organizing to project an image for the folks in Washington, D.C. to prove that in fact we are making progress as an industry to ensure consumers are protected. However, the companies that should be involved in this discussion tend to be small, unknown technology companies that take full advantage of third-party cookies and are building the systems enabling the data transactions. These companies are also the ones profiting from the data capture or privacy invasion disintermediating the publisher revenue stream. I like to call these companies ‘the rotten eggs’.

Here is a list of categories the rotten eggs fit into from my perspective (in no particular order):
- Agency ad servers
- Targeting companies (behavioral, remarketing, etc)
- Rich media companies
- Ad optimizers
- Affiliate marketing companies
- Ad networks
- Data exchanges
- Site analytics and research

Now not every single company across every category is a rotten egg of course and I purposely didn’t include the obvious spyware/malware categories. In fact, most of the companies are trying to do good for one party or another within the ecosystem but the problem is that in every case the consumer has no idea who these companies are or why they have access to their information. These companies are by definition at arm’s length from the consumer, and in most cases completely invisible, making it very difficult for the consumer. There are a few companies that try to message to the consumer and educate them about cookies, targeting and the benefits to them. The IAB launched a program last year with a large number of their members contributing ad inventory. The challenge is that they contributed remnant inventory to the cause that consumers have been trained to avoid rendering the program worthless.

Something just happened that may shake up the industry. Last week the European Union passed a law that will REQUIRE consumer consent in order to use third party cookies for the purpose of collecting and sharing information across domains and delivering relevant targeted advertising within the next 18 months. Therefore any organization serving an ad or collecting data via the standard pixel on a page will need to present the consumer with a pop-up or some other message unit to gain consent. This will disrupt the normal Web experience for the consumer and cause some real challenges for companies to generate revenue. Publishers will carry the brunt of this burden causing a backlash from their consumers and likely a downward spiral of their revenue.