While federal privacy rules are still being debated, some regulation could mandate that users opt in before companies could track surfing behavior with third-party cookies. The better companies can understand user behavior the better they can target their advertising. Without the targeting, wither online advertising? So when co-moderator Ross Sandler, senior analyst for RBC Capital Market, asked about the effect any cookie rule changes could have, I was eager to hear a response. Instead, one agency executive said they would get the data some other way.
(For a summary of the event, Agency Demand Platforms: Art vs. Science in a Real-Time World, co-sponsored byContextWeb/ADSDAQ and New York’s Ad Club, you can go here.)
I emailed Sandler for his reaction, and he wrote saying that the executives either don’t know what’s coming or just chose not to answer the question. In a June note from RBC, the company said “ad networks that are “aggressive” users of behavioral advertising via cookie-based targeting need to be concerned about the changes coming in Washington. We think behavioral advertising could represent up to 15%-20% of the US display marketplace.”
AdMeld CEO Michael Barrett, who also attended the event, said it’s not just about the cookies, it’s about all data collected from users that would need to be properly opted into. It would be difficult to get any data, not just cookie data, if draconian rules were implemented. (Below is a video interview)
Another executive who has worked on both sides said it would be death for ad networks and especially publishers. Cookies are integral to advertisers and ad networks generating maximum value for publishers and guessed earnings would go down by 50 percent. Cookies are the blood of the system. Cookies are like bar codes, without them you would have to do everything manually and that doesn’t scale. It would be a disaster, this executive said.
It’s difficult to know what the rules will eventually be, but nearly everyone I talked to said there doesn’t seem to be a sense of urgency or unity in educating federal regulators on the consequence of radically altering how users are tracked. There obviously will be some changes, but the depth of the restrictions are still in play. I will talking more indepth with others as this plays out.