GOOGLE'S DIET NO MORE COOKIES COMM 365/103 Daniel Bilches Medinas 11157120.

GOOGLE'S DIETNO MORE COOKIES

COMM 365/103

Daniel Bilches Medinas

11157120

What are Cookies

• When a user accesses a website, the server stores a small file with the browser of the user’s computer, so that next time the user visits the website, it will recognize the user. This small file is called Cookie

• Cookies remember stateful information and record browsing activity; thus allowing servers to tailor pages to user’s profile. In other words, Cookies enable precise targeting

• Cookies can be controversial. Besides the primary cookies, cookies from the website being visited, there are third party cookies. The third-party cookies are controversial because their sole purpose is to track browsing activity, profile users and sell information to marketing companies

Internet Advertisement Industry - Growth

• Despite the slowing rate, Internet advertisement grows significantly faster than traditional media

• Advertisement dollars are migrating from traditional media (newspaper, radio, TV) to the Internet at a fast rate. This means that, every year, the Internet attracts a bigger share of each dollar spent on advertisement

Internet Advertisement Industry - Narrowing the Gap

• Expenditure with TV advertisement will continue to be higher than expenditure with Internet advertisement in the near future

• The gap between the total dollar amount spent in TV ads and Internet ads is shrinking fast

• Among the reasons behind the shift from TV towards Internet ads, are better targeting and performance tracking (i.e. ROI) capabilities of Internet advertisement

Internet Advertisement Industry - Top Players

• Highly concentrated industry, that is, the top players get most of the revenue

Internet Advertisement Industry - Mobile Trend

Internet Advertisement Industry - Mobile Trend

• There seems to be a trend within a trend. As advertisement dollars migrate from traditional media to Internet based media, Internet based ads migrates from desktop research based ads to mobile devices

• In 2017, mobile advertisement is expected to attract almost 50% of Internet advertisement revenue

Internet Advertisement Industry -Revenue Shift due to Mobile

• There is a trend in which the revenue stream of Internet Ad is migrating from Research Ad towards Display Ad

Google’s adID - What and Why

Definition:• Anonymous identifier for advertising (adID) is Google’s new concept

to gather information about consumers interest and behaviors. It’s purpose is to replace the controversial third-party cookies used to track browsing activity for marketing purpose

Advantage over Cookies:• adID will have stronger privacy protections by including encryption• It will consolidate information; eliminating confusion arising from the

use of several third-party cookies. At the present moment, advertisers do not know if they are tracking the same user or not

• Users will be able to adjust their browser settings to limit or block ad tracking and even exclude companies on Google's list of approved advertisers (advertisers will need to adhere to a term of user privacy)

• User will have the choice to create a secondary adID for “private” browsing sessions

• adID will be automatically reset by the browser every year • Differently from Cookies, adID will compile the tracking of different

devices into one single profile

Google’s adID - The Catch Behind It

• In my opinion, if Google’s endeavor is successful, the company would gain control over the info-gathering structure that forms the foundation of digital advertisement (either research or display). Especially due to two specific reasons:

1. adID will enable Google to track users across any device (laptop/smartphone/ tablet) and compile all data

2. Google will have access to data that is unmatched by any other company. Currently, Chrome is the most used web browser in the world and four out of five smartphones use Google’s Android operating system. The company will have enormous amount of data resulting from tracking those that use its products

• Google has identified that Mobile Advertisement will dominate Internet Advertisement and that, in the near future, Display Ad not Research Ad will capture most of the revenue in the Internet Advertisement Industry. Thus the company knows not only the benefits, but also the need to create a mechanism that will track browsing behavior across different devices and consolidate all data, so that it won’t exclusive rely on research ads as a source of income

• The are great risks involved with the creation of adID:1. Consolidating sensitive info in one place will attract attention, that is, adID will be a

target of countless hackers attempts to steal sensitive information2. Government agencies, such as NSA, are likely to attempt to monitor the data

collected by adID3. Perhaps, Google will attempt to connect adID profile to user’s real ID by using

information form Gmail and Google Plus

Google’s adID - The Catch Behind It contd.

• As of advertising companies, at first glance, it seems they would be benefited by having access to more accurate and consolidated data source. However, Google will exert great dominance over Advertisers by requesting them to abide to a privacy agreement and by being the sole company to control world’s biggest database of web browsing behavior

• Google’s competitors (i.e. Facebook, Twitter, Apple) will have incentives to to mimic adID and avoid Google from further expand its market dominance

• Bottom line, even if Google succeeds in creating adID, other companied will copy the idea and, eventually, adID will only be a new “recipe” for the same problem. Besides, the proposed benefits to users are not compelling enough to justify handing Google this amount of sensitive information. I am skeptical about blindly trusting Google, because it is necessary to remember that Google’s successful business model was built through gathering and using information, not enabling users to limit data collection

References

• eMarketer – Ad Spending Mid-2013 Forecast and Comparative Estimates

• IAB Internet Advertising Revenue Report 2012 Results• http://www.go-gulf.com/blog/online-ad-spending/• http://www.digitaltrends.com/opinion/what-is-google-

adid-and-how-will-it-replace-browser-cookies/• http://www.zdnet.com/googles-anonymous-ad-

tracker-adid-could-replace-third-party-cookies-7000020833/

• http://www.adexchanger.com/data-driven-thinking/what-the-google-adid-means-for-ad-tech/

• http://en.wikipedia.org/wiki/HTTP_cookie