Google recently announced that they were looking into the option of discontinuing the use of third-party cookies for tracking browsing habits.  In their place, Google is considering creating its own system, which uses an anonymous identifier for each individual.  Supporters of this change say that it would improve consumer privacy, but those against the plan say it could cause significant problems with the advertising and publishing industries.

Why The Internet Loves Cookies

Cookies have been an important part of how the Internet works from almost the beginning, and they are especially critical for the digital advertisement business.  Digital ads generate over one hundred billion dollars per year, and many websites rely exclusively on these ads to generate revenue.  When a website loads advertisements, they rely on cookies to decide what ads should be shown.

This is why if, for example, you have been searching for information about which hotel to stay in when you visit Florida, most website ads will be all about vacations, Florida, flights and similar things.  The ad networks read your cookies, and display very targeted advertisements to you.  This is good for you, the browser, because you will be given the opportunity to follow the ad to a site which will presumably provide you with information or products you’re looking for.  It is also good for the advertisers, because they are getting very targeted traffic.  Finally, it is good for the sites displaying the ads because more people will click them, resulting in increased revenue.

There are a couple of concerns with cookies, and how they are used by advertising companies, however.  First, third-party cookies are often placed on computers when someone visits a page with a dedicated advertisement.  This means when an ad loads on a page, it might be placing their cookie on the computer as well as the normal cookie from the page that loaded.  The second, and perhaps more significant, issue is that cookies don’t typically work well on mobile devices.

Google’s Dangerous Solution

Google’s solution is to create an alternative to the cookie which will track the browsing activity of users directly.  They would provide access to this AdID to other advertising networks so they could get the same information, as long as they agreed to meet some basic standards.  While this sounds great at first, it does have a significant risk which many people are overlooking.  What happens if Google decides to restrict which sites or networks are allowed access to the ID?

Many small publishers would no longer be able to provide ad networks with the necessary information, which would mean advertisements displayed on their sites would be far less targeted.  This would not only mean fewer people would be clicking on the advertisements, but also that the companies buying the ads would not be willing to pay as much.

As the revenue drops for these smaller publishers who often rely primarily on advertising revenue, it may not be worth it to maintain the website any longer.  They could also switch to other revenue options like subscriptions or affiliate sales, but those are often unwelcomed by visitors in some markets.  The bottom line could be many excellent websites being lost.

Benefits of Google’s Proposed Solution

While the hypothetical problems Google’s proposed solution could cause are quite significant, the news isn’t all bad.  There are quite a few benefits Google would bring to the table as well.  First, it would address a major concern with privacy many people have.  The cookies aren’t necessarily anonymous, which is a big issue for many people.  If Google sticks with the anonymous feature of their solution, it would undoubtedly relieve the concerns of many people.

Another benefit will come to the publishers of web content.  Since the new solution would not relay on third party cookies, it would allow publishers to gather much more information about the people who are visiting their pages.  Without being able to identify any personal information, they could gather very specific information about the types of people visiting, which will allow them to understand what information they are looking for.

They would also be able to see the value of the users coming to their sites, and possibly demand higher payment for the advertisements they are displaying.  It would also allow ad networks to get a more accurate picture of the people browsing, so they could further target the ads being displayed.  This, of course, increases the value of each ad so the ad networks can charge more.  This benefits both the ad providers and the site owners as well.

Overall, this solution still has some issues to be worked out, but it seems to be a step in the right direction.  A final solution may be to have this Google back solution owned and managed by a large group of individuals and companies to help ensure no single entity (like Google) would have the power to influence other companies by threatening to cut off their access to the new system.

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