Tim Whitley has cookies on his mind, and not just because the Girl Scouts’ sales season is winding down.
Whitley, CEO and founder of Team SI, the digital side of Mangan Holcomb Partners/Team SI of Little Rock, is thinking of the kinds of cookies websites put on your hard drive to track your preferences. “Google Chrome is starting to phase out cookies, or at least third-party cookies,” Whitley said, describing what might seem esoteric but could actually be a sea change in digital advertising.
Google owns the web browser Chrome, which announced in January that it plans to “phase out support for third-party cookies” within two years.
“Third-party cookies,” those not placed by the website you’re viewing but rather placed by other companies looking to track your internet use, “give a lot of different companies the intelligence on your car shopping, for instance,” Whitley said. “But we at Team SI have been planning for cookies to go away since 2012.”
Whitley, a devoted traveler, gave an example. “I get ads all the time to go to India or Germany, because I’m constantly on American Express Travel or Travelocity. So I get served these ads, but that’s the old-school modeling with cookies. When cookies are phased out, it has the potential to be detrimental to the ecosystem of digital advertising as we know it.”
Why? Because Google Chrome holds 69% of the web browser market on desktops and 40% on phone screens, and it will be blocking third-party cookies altogether by 2022. Google said the effort is meant to “enhance privacy” for web users and to “support publishers.”
The shift also offers a revenue opportunity for Google, which still knows the web habits of Chrome users and will be in a position to monetize that data.
“The reality is that no one really knows exactly what will replace advertising through third-party cookies,” said Aly Smith, digital marketing manager for Flex360, Arkansas Business Publishing Group’s digital marketing agency. “The digital ad space is constantly changing, and a good agency is always adapting to these changes. Third-party cookies are old technology and we’re finding ways to move on and not only survive, but thrive without them.”
Smith said first-party cookies from companies like Amazon, Google and Facebook “provide much more valuable and accurate targeting data.” Because Google is still developing its own new ad technology, outsiders can’t be certain, but Smith predicted “stronger targeting and ad effectiveness.”
Team SI has been preparing for several years, Whitley said.
“We started focusing on a person’s ID, rather than tracking with cookies,” Whitley said, noting that consumers are assigned a number and not tracked by name. “I can’t pull up your personal ID and say this is Kyle. But what’s going to take over is your personal ID basically, because you’re not just on your smartphone. You’re on your TV, and it’s on the internet; you’re on other devices. So that’s where a lot of information is being collected.”
Other data comes from public records, including property documents. Whitley pointed to a large home across the Arkansas River from Team SI’s Riverdale headquarters. “That’s about 4 acres, something we can know through public records. And I can deliver an ad to those people because I know the size of the spread, an ad for some kind of equipment they could use on land that size.”
Whitley traced Google’s current initiative to a European law, the General Data Protection Regulation, that guaranteed more internet privacy rights in Europe starting two years ago.
A somewhat weaker American version followed, the California Consumer Privacy Act. “Since we have clients in California, we have to be compliant with the CCPA for their sake,” Whitley said. “That’s what Google is getting ahead of. There is a train effect: When one state does something, others are going to follow.”
Whitley’s motto has long been that data is the currency of the internet. “That’s not changing. If Landers Auto wants to take first-party data on their service customers and do direct-mail marketing to them, that’s 100% legal.”
He added that the financial winners in the new paradigm will be tech companies, including Google itself, “and then publishers, for example, ArkansasBusiness.com. Publishers with A-plus websites, those publishing original, ongoing, relevant information, are going to see revenues actually increase in two years because of this. Without third-party cookies [driving programmatic ads], that ad real estate is going to be worth more because the targeting will be better.”
Sign up for Daily E-news
