Mike Addonizio, director of platform solutions at Digilant, considers the age of the cookie as it draws to a close, and asks: what’s next for digital marketers?
For the digital advertising industry, cookies are still the dominant data currency of today. Much of programmatic media-buying technology, and the way we deliver billions of digital ads, depends on this magical string of characters that helps identify consumers online. But as becomes clear when you examine these practices a little closer, it’s time to replace the cookie and move to people-based advertising.
Many would say that a cookie is a digital identifier for a consumer that an advertiser can target. While this is true, it can be misleading. A cookie is actually an identifier for a browser on a device. Each device can have multiple browsers and each consumer can have multiple devices – so a cookie does act as an identifier for a consumer, but it is most likely one of many cookies that represent them.
In the early days of digital advertising, it was quickly recognised that profiles could be built around cookies by tracking what users do across multiple websites. For example, if you browse between a travel blog, TripAdvisor and Expedia, it can be inferred that you are in the market for a holiday. In order to monetise their audiences, websites started sharing data with third-party resellers, who wrapped that behaviour up into segments and sold bundles of similar cookies to multiple advertisers.
Today, however, the global average number of devices per customer is approaching four, meaning that, at a minimum, the average person is represented by at least four cookies. Given that each device can have multiple browsers, and therefore multiple cookies, this number will likely be much higher. On your iPhone, for example, a website opened in the default Safari browser will be attributed to a different cookie to a site accessed through the Facebook or Reddit apps.
What’s more, cookies are increasingly short-lived. When someone clears their cookies, they are essentially changing their digital advertising identifier for that browser, and all previously collected behaviour is lost. And when someone uses private browsing (such as Chrome’s Incognito mode), they create a new cookie each time they reopen the browser. So, an advertiser may want to target a specific cookie, but it’s entirely possible that they will never see it again.
With the explosion in devices, the surge in ad blockers and the learned habit of clearing cookies, the age of the cookie is coming to an end.
From cookies to individuals
The goal of digital advertising has always been to use knowledge about consumer behaviour to communicate the right message to the right person at the right time. The more data an advertiser has on users, the more effectively this goal can be realised.
In the days when most consumers had one desktop device and no ad blockers, a cookie represented the lion’s share of that person’s online behaviour. But we have now hit a tipping point, where the value of a cookie is diminishing. In order to replicate the successes of the past, behaviour across browsers and devices must somehow be tied back to the consumer themselves.
This is referred to as ‘people-based’ advertising – where targeting occurs at the level of the consumer, not their cookies. In order for people-based advertising to work, there needs to be a shift from cookies to an identifier.
Many have considered email addresses as an alternative option. If an email address is tied to cookies, it is possible to tie behaviour across multiple devices and browsers back to an individual. Furthermore, an email address translates to other channels, such as social, search and (of course) email. However, the reality is that many consumers have multiple email addresses – a personal account, a work account and one that’s used for junk mail – and they don’t last forever. While email is a great starting point, it won’t create the defragmented consumer profile required for optimal ad targeting.
So, what about mobile phone numbers? Most consumers only have a single number and, since mobile providers allow for a phone number to be transferred from one provider to another, users rarely change their number. This makes it a non-fleeting, unique identifier that represents a consumer. If all digital behaviour could be tied to a mobile phone number, advertisers would be able to build a full profile of their consumers.
It’s no surprise that ecosystems like Facebook and Google now often require a phone number to sign up for an account or to verify a consumer’s identity. As this practice becomes commonplace for smaller apps, publishers and websites, mobile phone numbers could become the identifier of the future.
For programmatic advertising, this unique identifier could one day replace the cookie. Assuming that this all happens in a privacy-compliant way, the mobile phone number could span ecosystems, devices and browsers, and help advertisers achieve that core goal, of delivering the right message to the right person at the right time.