In a future cookie-free advertising landscape, browsers and operating systems will become the gatekeepers of digital marketing. This has serious consequences – much more serious than most people are aware of so far.

Who will decide in the future what advertising we see in the digital universe and when – a few gatekeepers? Or do we want to keep market access more open in the democratic or market economy sense? We are currently facing important questions and setting the course. These conversations will probably have a major impact on digital marketing in the next two decades. And most of us may only have an inkling of what’s in store for them.

How did we actually get into the current situation? The short summary: Too much blingbling on the websites, too many trackers and a too high nerve factor of the buy-me-retargeting. Maybe we as an industry simply overdid it a bit. In response, users have installed adblockers and the legislator has reacted with the DSGVO. The politicians meant well but did it badly! Because now our European or German data protection is absurdly leading to the fact that we are promoting global data oligopolies. These massively restrict our scope for action and our economic opportunities. The fact that “A world without cookies is already a first good step”- as Jürgen Scharrer recently commented in Horizont – I personally consider to be a very naive view. The opposite could be the case: “Cookies out” means “GAFAs before”! The loss of cookies strengthens data oligopolies, maybe even a data monopoly.

On the way to a data oligopoly: Few drilling platforms with exclusive rights

If data is the new oil, then – if we are not careful – a few large US digital “oil companies” will own the sources in the future. With only a few rigs, but very exclusive production rights. I think many in Germany and Europe have not yet really understood the true dimension of this upheaval. Google, in particular, has been very clever strategically in this game.

In the first stage, the attention of regulators was focused solely on the “evil” third-party-cookie. Log-Ins, which contain much more extensive rights to data that can be perfectly linked together across devices, were left out.

Stage 2 presents a solution to a problem that only arose in stage 1: the current DSGVO reality with its content solutions is far too complex and lacking in transparency, both for users and companies. The perfect starting point for Google: Because now in the second step – as the saviour on the white horse – Google is approaching with its initiative of the “Privacy Sandbox”.

And from both a technical and organizational point of view, this is a very interesting approach: a central office that collects and manages all data. An end to the completely confusing sea of service providers who are involved in every opt-in process and who, in the end, can no longer be really controlled. And thanks to Google there is already a suitable infrastructure. The browser or the operating system for mobile use. We are told that the digital advertising world would become simple and controllable again.

But we shouldn’t fall too quickly into the convenience trap. If the market only uses the Google solution just because it is simple, faster and apparently easier, it could permanently block the free path to data. And with it, all opportunities in the future to set up and implement their own business models linked to more extensive data. 

The question of what comes after cookies is so fundamental because under the guise of data protection, a new technical infrastructure is to be created that will shift the usual balance of power in the World Wide Web even further to our disadvantage. In a third-part cookie-free Internet, browsers and operating systems become the central gatekeepers. This changes the nature of the web. In the future, few gatekeepers want to decide what kind of data is available to advertisers, agencies and publishers. And thus, also who can refinance themselves to what extent.

The Black Box decides which data we are allowed to work with

The browser becomes a black box. Everything that is important in terms of data and information for meaningful targeting is measured and generated behind closed doors. If one reads Google’s statements more closely, it seems to lead to a situation that we already know in principle from the video portal YouTube among others. Advertisers learn whether they reach their target groups. But in the future, they will no longer be able to track and verify the results themselves. Only YouTube collects the performance data as well. Control? Hardly possible. What was once an open system based on the division of labour, is now a centrally controlled Internet with a completely different character. In this system, one person in particular learns and optimizes: the gatekeeper. This makes it extremely difficult for us as media agencies to externally monitor performance and adapt existing strategies. Creative in-house developments are no longer worthwhile because the gatekeeper decides which set of data is made available.

Of course, you can accept this attractive offer from Google. One should only be well aware of the possible consequences. Because afterwards, nobody should claim they didn’t know.

The Internet is just the beginning, mobile follows and TV is coming soon

Online the weights have already shifted. That’s just the beginning, because in today’s digital ecosystem, everything is connected to everything else.

The largest browser, for example (Chrome), belongs to the globally dominant advertising network Google. And Google also provides the dominant mobile operating system – Android. From this perspective, the oligopoly of browsers mentioned at the beginning quickly becomes a duopoly of operating systems with a rather small player (Apple with iOS) and an overpowering player (Google, for example, has a 76 percent market share in Germany with Android). And it will by no means remain with desktop, laptop and smartphone. This expansion of operating systems will have consequences for advertising on all screens, especially television. As a result Google, a company with a market share of around 80 percent in the western world, would dominate the two largest advertising media worldwide because it controls its revenue processes.

The discussion about cookies, browsers and operating systems is therefore not only an issue for the Internet in the narrower sense, but ultimately affects our entire media and advertising landscape. It is also a cultural debate. Perhaps even the most fundamental one we are currently conducting. It is about refinancing the content that is the basis of our democratic society. Do we regard the Internet as a public space, with the possibility of participation by many citizens and companies? Or is it becoming a purely economic infrastructure dominated by one or a few US corporations?

It is high time that we in Germany and Europe intensify this debate. We Germans, in particular, sometimes tend to lose ourselves in debates about the industry that are too small-scale. It is time to think bigger together and develop serious alternatives!

A new decade is always a good time to rethink old habits and draw up new plans for the next ten years. Or so you’d think if you took time to read the – presumably intentionally? – unassuming, but nonetheless still very much evident posts published by Google over recent days and weeks.

Because what these messages describe, albeit in a very convoluted and in some cases quite innocuous way, is nothing less than the end of an era, and indeed the end of a technical tool that has had a significant impact on the operation of the internet as we know it: the cookie.

Anyone who works or has found their calling in the digital world and has been in this game for more than three months should theoretically be aware of what cookies can and can’t do. They should also have a rough idea of what purpose cookies serve on the internet – and what stops working when cookies are removed.

Just a few months ago, Firefox gave us a little taster – let’s call it the blast wave before the barrage of fire, if you’ll forgive us for expressing it in such warlike terms – of just what a world without cookies could look like. This preview suggested – in an equally quiet and unassuming manner – that cookies belong to the dark side and continue to be a thorn in the side of users wishing to maintain their privacy. As a result, cookies are blocked in the browser’s default settings from v.69 onwards. This is remarkable for two specific reasons:

  1. Firefox has a market share of 25%, in Germany at least.  In other words, this is hardly a tiny niche concern, but a quarter of German users, who, more or less by default, have lost the right to decide whether they agree to have the internet refinanced by targeted advertising – or not. I’m not disputing the fact that, had these users been asked the same question, they may very well have answered along the same lines – i.e. “Thanks, but no thanks”. However, the consequences of the no-cookie policy will unfortunately lead to more advertising, not less, and this advertising will very probably be much more intrusive – something I fear that very few users, and possibly even Firefox developers, will be aware of. It isn’t always easy to drill down to the truth of the matter.
  2. Nevertheless, when we look again, something far more interesting and at the same time quite revolutionary comes to light: the browser is promoting itself to the role of a regulatory interface, with the power to make future decisions on the types of data that advertisers, publishers and agencies can publish – or not.

Just take a few minutes to let that sink in. In other words, imagine if the government were suddenly no longer responsible for deciding whether you need a visa to travel to another country and what you need to do to get the visa. Instead, these powers would be transferred to the airline you’re flying with. In one fell swoop, the browser is morphing from a platform offering access to the web, to the role of a customs officer deciding what information can be provided to whom and in what form!

You might well say that’s not a problem because surely the user can use another browser if they aren’t happy and, in any event, isn’t the browser doing a really good job because it’s stopping me being spied on?

But is that actually the case?
Which brings me right back to where I started: last week, Google targeted certain business circles to announce its vision of the future of Chrome and whether it intends to continue using cookies the same way or to stop using them. This time, we’re not just talking about 25% of the German market, but a rather more substantial 45%. Which in turn means that if Chrome makes a major change, the market itself will be bound to follow.

And this change is the crux of the matter:
Google currently needs so-called ‘third-party cookies’, otherwise known as pseudonymised identifiers, which not only represent an extremely relevant business model for Google – the Google Display Network – but also keep the entire online advertising world, as we know it, in business. This is why they are saying they will still support cookies for the next two years, whatever happens.
BUT – and this is a very big BUT: Google is working in parallel to provide an alternative to the cookie – the so-called Privacy Sandbox. Until they show their hand, one thing is clear: their aim is to establish the browser as the ‘privacy police’ with the ability to decide what information about the user, or the website the user has visited, can be passed on to others or used for targeted marketing (targeting).

This is further evidence that Google is shoring up its silo mentality, allowing Chrome to become a separate compartment in the Android-Google world, which also assumes that advertisers and users who allow Google to access their data will benefit accordingly. Those who don’t comply will be penalised, either by fewer targeting opportunities for the hapless advertiser, or more and less appealing advertising for the errant user.

Admittedly, you could say that Google is just a supplier and the market will retain the option to create an alternative system alongside the Google vision. However, this initiative also has the support of the World Wide Web Consortium (W3C), as well as data protection authorities, who are clearly set on creating a whole new standard for the world wide web without cookies, not just a Chrome-based solution.
But is this kind of technical rehash of the fundamental aspects of internet advertising either right or reasonable?
Should we be honest and channel the German Chancellor when she said that we probably have no alternative if the industry wishes to continue to expand under the terms of the GDPR, gaining increased user acceptance as it does so?

And what does this mean for the industry?

  1. The third-party cookie will be no more
    And this could happen quicker than we’d ever thought possible. We all need to seek out alternatives, because there’s no doubt that, without cookies, we’re all going to be subjected to more, ever poorer quality advertising. In an effort to prevent this turn of events, we also need to reinvent ourselves: identify new targeting opportunities, other ways of addressing our target market, other efficiency criteria in the assessment process. In some areas, we’ll more or less have to start from scratch.
  2. The browser’s role as gatekeeper is nigh
    Like it or not, the browser will see its role in the technology chain ‘upgraded’ – and that’s putting it diplomatically. This will lead to a sequence of events that we need to monitor extremely carefully: to what extent can browsers, which currently purport to be neutral, still claim to be neutral in the future? Or is it more likely that they will become a hidden, but absolutely essential cog, or economic level, in the overall ecosystem?
  3. The competition authorities need to take a closer look
    Of course, going crying to the authorities always sounds a bit lame, like appealing to the referee in a particularly fraught match. But it really makes sense in this situation: let’s take an in-depth look at what would happen if a company like Google, which already dominates the market in certain areas, suddenly decided to use the browser mechanism to regulate data flows to its own advantage? Especially if this was ultimately with a view to granting better access to this data to people working behind the scenes with other parts of the group. It’s hardly a waste of time to give this scenario more than a cursory glance!
  4. More cooperation and less of the silo mentality
    All our business models require us to establish a process with which all market participants can engage, and which are not defined by a limited number of key players in informal groupings. The IAB’s Transparency and Consent Framework (TCF) is a truly outstanding example of this kind of approach, a framework solution built by the industry by cooperating with the major ‘silos’ represented by the publishing and advertising industries.

Is this reason enough to take a pessimistic view?

No, but it is a good enough reason for us all to get involved, be it in associations, interest groups, in our own companies – working alongside our customers and our own competitors in the marketplace.
We must find a way to ensure future business models that no longer allow individual players to turn into monopolies, while at the same time allowing users to surf the web with their privacy intact. We don’t want a return to the dark days of the late 90s, when the online world was most certainly not a very pleasant place to be…

As an agency, this is something we will need to come to terms with, as will all advertisers and technology suppliers, whether it means rediscovering virtually extinct targeting opportunities such as contextual targeting, or by working more closely with first-party owners like individual publishers and publishing houses, or whether it’s by placing more emphasis on the use of content integration and cooperation.

One thing’s for sure: online advertising is not going to disappear any time soon. It’s far too relevant a channel to slip by the wayside – and usage has become much too widespread in recent years. Advertisers cannot (and will not) relinquish the opportunity to address specific target groups now they have it in their grasp. However, it remains to be seen whether they can be addressed with the same quality and in the same quantities in the future. My view? I don’t think this will ever be possible, but the users have made their decision so now they have to live with their consequences.

Let’s embrace the new decade – and everything it holds!