If technology ideologues don’t start heeding the warnings of the businesses that pay for the Internet’s incredible diversity, consumers worldwide will soon be left holding a bill that they didn’t even know existed.
In late June, Mozilla—maker of the popular Firefox Web browser—announced that it would block the vast majority of third-party cookies for all of its users worldwide. It is a move that carries very little upside for consumers and threatens to destabilize the economic ecosystem on which the modern Internet, and the ad-supported content that is its hallmark, is built.
Cookies are the technology that creates persistence on the Internet. When a website remembers what’s in your virtual shopping cart, or what stories you’ve already read, it’s most likely using some sort of cookie.
For advertisers, cookies are critical to ensuring that Internet users see relevant ads when they browse the Web. A user who priced golf clubs at an online store, for instance, might get an ad for golf equipment or a golf vacation as opposed to a more random offering. Used transparently and responsibly, cookie-driven ads are beneficial to consumers and extremely valuable to content creators who can earn approximately twice as much as they would with random ads. That bump in revenue can be the difference between a sustainable online business and a failed one.
This is what Mozilla is seeking to stop. Under its plan, the cookies that support most interest-based online advertising would be blocked outright, with the notable exception of those maintained by the largest publishers. Many in the technology community are already saying “good riddance” to interest-based advertising, but what they aren’t saying is how they intend to pay for all the free content that such ads support.
If only the very largest companies have the ability to gather data about users to serve relevant ads and measure advertising effectiveness, competition will be dramatically limited, and everybody will lose, big and small.
Free is the model that works on the Internet. Other approaches, such as micropayments, have been tried and for the most part discarded, as users have made it clear that they don’t want to pay for content. In an April Zogby poll, nearly 70 percent of users said that free content was “extremely important” to the overall value of the Internet.
The entire history of the online advertising industry has been about evolving to meet that primary consumer demand. Today, the so-called “long tail” of Internet content thrives, in large part thanks to the existence of a powerful Internet advertising infrastructure that supports the widest possible range of content providers—from the largest consumer websites to some of the smallest niche blogs.
If the Internet advertising ecosystem is damaged, it is those publishers, and the readers who depend upon them, that will suffer. Paywalls will increasingly go up, and in many cases, the smallest content providers may simply lose the ability to sustain themselves and their sites. A group of 1,000 small Internet companies recently warned Mozilla of this specifically.
To be sure, Mozilla is itself an appealing story: a free software community that created one of the most popular Internet browsers on the planet. But with an estimated 20 percent of the global browser market, its days of being a plucky upstart are long past. When Mozilla makes decisions about which business models should or shouldn’t thrive, it ripples throughout the Internet. And, at this point, the Internet cannot afford for Mozilla to be oblivious to the unintended consequences those decisions cause.
Internet privacy doesn’t take place in a vacuum, but far too often the Internet privacy conversation does. Whether it is technologists changing fundamental understandings about how information flows online or legislators seeking to regulate that behavior from Washington, too many decisions are being made summarily, without the consultation of the broader Internet community. And since the people behind those decisions are seemingly driven by a less-than-balanced view on the issue of privacy, users’ legitimate economic interests are often left out of the conversation altogether.
What makes the Mozilla decision and efforts like a federal Do Not Track proposal doubly concerning is that they ignore the amazing progress on privacy, transparency and consumer choice that the Internet advertising community has already made through collaborative effort.
For more than two years, every Internet user in the United States—including every Mozilla user—has been able to opt out of data collection by clicking on the small blue icon that is served on more than a trillion Internet ads every month. The protections afforded by this program—which was developed in consultation with many content and technology providers—goes far beyond what Mozilla is implementing, and better yet, puts the choice in the hands of individual users, not a tiny group of technologists.
Mozilla is also involved in a forum called the World Web Consortium or “W3C”, again with a diverse cross-section of advocates, technologists and industry representatives, which is seeking to find a consensus solution that preserves the Internet’s economic model, while also enhancing user choice. That Mozilla has decided to end-run that process does not bode well for it, or for the future of ad-supported Internet content.
When the Internet business community raises these issues with Mozilla and the self-appointed technology arbiters who support the cookie-blocking program within, we’re accused of histrionics. Internet advertising will still exist, they say, just in a form more akin to what it was 10 years ago.
But sacrificing the innovative developments of the past decade will take real money—and overall advertising relevance and effectiveness—out of the system, money that is currently supporting an Internet experience that users demand. By the time the experience starts to change—either with the reduction of ad-supported content or the emergence of new pay-per-view Internet models—it may be too late to put it back the way consumers want it.
Today's advertising ecosystem defaults to serving the most relevant ads, generating better advertising results, publisher revenue and most importantly, giving consumers access to the broadest possible range of sites and services at little or no cost.
Mozilla has attempted to paint this effort as part of a grand experiment in strengthening consumer privacy, but the organization’s days of being an academic exercise are long past. Now it has the power to pick winners and losers on the Internet, and stick users with the bill for its choices.
Lou Mastria is the managing director of the Digital Advertising Alliance.