Apple, Google effectively kill the cookie, but what does it really mean?

Anyone who has spent any amount of time online in recent years will be familiar with cookies, but now they look set to become a thing of the past as Apple and Google are effectively “killing” the advertising cookie. But what exactly does this mean?

Cookies are a way of letting a website remember you. These text files are filled with small pieces of data to identify your computer when you use a computer network. There are different types of cookies, but the ones Google and Apple are focusing on are advertising cookies, which are designed to collect information about people on their device so they can be shown ads that are based on relevant topics that are likely to interest them. The website operator generally gives advertisers permission to place these cookies on the website so they can collect and share information with other advertisers and measure the performance of different advertisements. Many of these cookies follow users as they visit other websites as well.

Now, Google and Apple are making separate moves that will effectively kill the advertising cookie. Apple recently started requiring the apps that run on its devices to get permission from consumers before tracking their activity across other apps and websites, and they have also banned the use of unauthorized third-party cookies on their Safari web browser and apps.

Any time an app on an iOS device wants to track for advertising, it will have to prompt users to opt into it in what Apple is calling App Tracking Transparency, or ATT. Many businesses are concerned that people will not opt into being tracked, which will make their ad campaigns less effective, with one game developer referring to the move as an “atomic bomb.” Apple Software Chief Craig Federighi told European regulators that he believes the industry is going to adapt to the move, however.

Some privacy groups have commended the move, with the Electronic Frontier Foundation calling it a “step in the right direction.” However, Facebook has been vocal in its opposition as its core business depends on targeting ads and having access to people using Apple devices. They have accused Apple of making things difficult for their digital ad rivals while working on their own marketing business in the background.

Google’s cookie “alternative”

Google is taking a different approach, inventing a cookie alternative that will allow marketers to continue targeting desired groups of consumers, but it will no longer be done using an individual user’s web history. This will theoretically make it harder for ad tracking to be meshed with information gathered by data brokers, which is something that has been used to let marketers target consumers based on their gender, race and age. And while both companies have said the moves are aimed at enhancing privacy, Google has said it is trying to find a balance between protecting privacy and allowing web publishing that relies on ads to survive.

Essentially, Google’s Chrome browser will stop allowing third-party cookies that target advertisements based on individual behavior. They’ve termed their replacement approach Federal Learning of Cohorts, or FLoC, and it will group web surfers together around specific interests, such as celebrity gossip fans or people who read financial news. Advertisers can then market to these groups, but each individual’s identity and web habits will be effectively hidden within the crowd. According to Google, marketers were able to convert their messages to sales in tests of the new approach at a rate that comes close to the current method.

This move isn’t as well-received as Apple’s, with the Electronic Frontier Foundation warning that although it may avoid the privacy risks posed by third-party cookies, it is going to create new risks in their place. Ad tech companies competing with Google are also not happy, accusing FLoC of extending Google’s power; the tech giant already benefits from first-party data gained from logged-in Gmail accounts and other properties like YouTube, giving it a major advantage over other advertisers.

Although getting rid of advertising cookies in some form may sound positive on the surface, regulators around the world are concerned about the types of privacy concerns these new approaches might pose, as well as antitrust issues. If there’s anything the past has taught us, it’s that Google can’t really be trusted with people’s personal information or in its business practices at large, so it’s not surprising that many are wary of such a major change.

Sources for this article include:

Bloomberg.com

Wired.com