Google’s Latest Role: The Cookie Monster

Ad tech firms are on alert

Google is going after all the cookies, and the rest of the data-hungry world is worried that only crumbs will be left.

The search king is among a core group of Internet companies that see an opening as the Web evolves beyond cookie-based data tracking.

While the death of cookies—those sticky computer codes that compile data on consumers as they browse online—has been greatly exaggerated, many in the ad industry say their utility is in question.

Privacy concerns aside, cookies have limitations. They get erased, they largely don’t work in mobile, and they can be ineffective targeting ads. Think of being continually retargeted with ads for shoes you’ve already bought.

Google is developing proprietary solutions such as universal IDs, which can connect a user across devices, ad tech industry sources said. Essentially, a universal ID is a technological alternative to cookies that would collect data on users and track them as they travel from tablet to desktop to smartphone—a trick cookies can’t match. 

That said, the prospect of potentially even more data under Google’s control sends chills across the industry. “Dependence on Google alone for user IDs would not only give Google monopoly power in display, mobile and video in addition to search, it would also give it total control of advertiser data,” said Michael Greene, director of research and marketing strategy at AudienceScience.

Google has said it is still in the early stages developing alternatives to cookies, and that there’s no need to panic since users will likely be able to opt out. “Technological enhancements can improve users' security while ensuring the Web remains economically viable,” Google said in its only public statement on the subject. “We and others have a number of concepts in this area, but they're all at very early stages.”

And it’s not just Google. Facebook, Twitter, Yahoo or any Internet company with a silo of consumer data could build its own user ID, increasing the complexity of online advertising (Microsoft already has one). The industry fears a world in which marketing requires connecting a trail of discordant IDs to target consumers jumping from Google to Facebook to their iPhones.

No cookies would make life particularly hard for agency trading desks like Xaxis, which compiles its own user profiles reliant on third-party data. Any new identifiers would come from first-party data generated by the likes of Google and Facebook and might be off limits.

According to an internal Xaxis report, the agency is preparing for a cookieless Internet. Xaxis and others are also working on their own, non-Silicon Valley solution: the proposed statistical ID, which could be just the industrywide standard that balances the power scales. Theoretically, a statistical ID would recognize users by device and other anonymous attributes, and ads would target this compilation of characteristics instead of cookies.

“The advertisers in concert with publishers need to take a much more proactive role in terms of getting this situation solved,” one ad tech insider said. “They can’t leave it to Google.”