Recently, third-party cookies, the technology advertisers use to track consumer behavior across the Internet, have come under scrutiny by consumer advocacy groups, industry influences and government bodies. One of the most notable movements, The Do-Not-Track (DNT) initiative, aims to give consumers the power to control third- party tracking via a new universally accepted technical specification for declaring and managing data relationships between consumers and Web sites.

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THIRD-PARTY COOKIES UNDER
SCRUTINY: WHAT MARKETERS
SHOULD KNOW AND DO
INTRODUCTION
Third-party cookies, the technology advertisers use to track consumer behavior across the Internet, have been
the foundation of targeted advertising in the digital world. Cookie tracking technology allows both brands and
publishers to precisely define their consumer audiences, learn more about them by measuring behavior, and
locate their audiences on the Internet for messaging in the right context. But recently, this bedrock of the Internet
advertising ecosystem is under scrutiny by consumer advocacy groups (most noticeably the Do Not Track
Initiative), industry influencers and government bodies. Consequently, brands should consider what shape their
marketing efforts might take if the end of the “Cookie Age” comes to pass. It’s too early to predict whether third-
party cookies will go away completely. Core Audience, the industry’s first data management platform (DMP) built
for brands, sees a shift away from a reliance on third-party cookies as an inevitable, and likely positive, change. As
a result, brands must plan now to manage first-party data, or information you own about your audience on your
own digital properties.
CURRENT SITUATION
The Do-Not-Track (DNT) initiative, while slow moving, aims to give consumers the power to control third- party
tracking via a new universally accepted technical specification for declaring and managing data relationships
between consumers and Web sites. DNT is enabled by default in the latest released version of Internet Explorer,
which controls more than 50 percent of the worldwide desktop browser market. But the DNT specification is not
complete, and as such, is not honored by most advertisers yet.
Third-party cookies have been dealt a blow in a few other major ways. The impact of Apple’s stance on third-party
cookies (Safari blocks third-party cookies by default) has been growing exponentially given the shift of consumers
to mobile devices, where Apple’s products are dominant. And Mozilla, whose Firefox browser holds just under 20
percent of the worldwide desktop market, has announced that an upcoming release of its browser will contain
Written by: Peter Randazzo,
President and Chief Technology Officer, Core Audience

2. Between DNT, browser technologies and the shift to mobile, it seems inevitable that we will see a more restrictive
and policed world for the ubiquitous third-party cookie. For now, until DNT is ratified, more than 60 percent of
worldwide desktop browsers will remain third-party permissive (even after the proposed Firefox change near the
end of 2013). Consequently, any marketer who relies heavily on the availability and abundance of third-party data
will need to plot a new course — but can do so with careful consideration.
OUR PERSPECTIVE
Core Audience believes that any effort that results in data use clarity and consumer empowerment is worth
consideration, and support. While third-party data – when used transparently and wisely – can provide great value,
all too often that data is obtained in ways that are hidden from consumers, and then used in ways that are even
more difficult to see. Consumers will continue to insist on knowing more and to be in control of data gleaned from
their behavior.
Shifting away from third-party cookies is not without its challenges. For example, marketing agencies use third-
party cookies and data to support paid media campaigns in pursuit of clients’ goals. Third-party data is particularly
useful in filling data gaps within targeted environments, such as ad exchanges, where split-second decisions are
possible. In addition, third-party cookies are used by nearly all of the advertising industry to track and attribute
events to the measurement of performance for campaigns.
The power and value of third-party data is still strong, but as third-party cookies become less the norm, that value
may be challenged. Inversely, the power and value of first-party data will increase due to the expected scarcity
of information that is applicable to consumers. As a result, advertisers should begin to develop a strategy to
control, protect and leverage first-party data. Scale and quality should be closely managed through efforts such
as domain consolidation, value-driven tracking initiatives, and the acquisition of software platforms (such as data
management platforms) to supercharge their online efforts through first-party behavioral profiling and look-alike
modeling. Programmatic media buying firms – such as trading desks, which succeed through the exclusive use
of third-party data providers – will be at a significant disadvantage relative to those that are tightly connected
to owners of large amounts of first-party data, such as publishers and media companies. Premium inventory on
large publishers and content providers (which have unique relationships with consumers) will likely increase in
value and transparency. Advertisers will be able to target their audiences through this inventory, but only through
channels where first-party data is available.
As for tracking itself, the walls between first- and third-party relationships provide clear rules of behavior for brands
seeking to tie impressions and events together. Click-based, in-channel tracking and reporting will be functional,
though somewhat less precise overall. Cross channel, transactional attribution approaches that build their models
by stitching together detailed events and conversions from multiple partners and properties will be compromised
without trustable tracking. Fingerprinting technologies can fix that problem, but their industry-accepted use, in
a new third-party cookie control mechanism enabled by default. This mechanism is being co-developed with
Stanford University as a part of the institution’s Cookie Clearinghouse (CCH) initiative.

3. light of the spirit of the privacy groundswell underway, are questionable. Less transactional-based attribution
approaches (like media mix and agent-based modeling) should remain unaffected.
SUMMARY
Core Audience sees the shift away from the reliance on third-party cookies in the Internet marketing ecosystem
as an inevitable, eventual and likely positive outcome. In conjunction with their trusted partners, brands should
take the time to get informed and begin to plan strategies for using first-party data. Connected marketing – where
you are forming a close relationship with your audience – is best achieved through a combination of people and
technologies and of art and science. As the technological ecosystem shifts, the strategies designed by smart
marketers will shift along with it. This reality applies today and into the future.
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