Lately there’s been a lot of confusion around how data is used online and if that relates to consumer privacy. In fact, per a Fluent study in July, 59% of consumers are concerned about the way companies use their information. Large players like Apple and Google are continually making updates to limit personal identifiers in the name of protecting consumer privacy. But do consumers understand what they are being asked to agree to? Do they understand the pros and cons of the updates being made in the name of consumer privacy?
With the ad world increasingly focused on what Google is doing with third-party cookies, I started thinking about how the average person may not understand how important these changes are for them. Given my time at companies that rely on advertising identifiers to achieve success, I have a unique perspective on the topic.
Is online identity good or bad?
My 11-year-old twins and I watch a lot of TV, and because most of the shows we watch are through apps, they have gotten used to viewing ads that are relevant. When we adopted cats two years ago and started ordering from Chewy, my children were excited to see the addition of pet food and cat litter ads. We also get a lot of insurance ads, as one of my projects is working for a major insurance company. This also makes them particularly aware when an ad is not relevant, and when one comes up that doesn’t quite make sense, they comment on it.
Just the other day, we were watching on a non-smart TV and an ad played for diapers, causing my children to remark that someone didn’t read our household correctly. This led to a family debate about whether online identifiers are good or bad. My son took the position that identifiers are bad because he doesn’t want anyone to know who he is or what he does. I pointed out, however, that when they are playing video games and see ads, we don’t have to pay out of pocket each time they want to play. My daughter chimed in that recently she had seen an inappropriate anime ad on her device, which bothered her. But they both agreed that they loved seeing upcoming video game release ads because it helped them decide what they wanted for their birthday. We came to the conclusion that personalization has their benefits: they’re providing them with more relevant content ads and often weeding out inappropriate ads, while providing us with free or reduced-cost online content.
A basic breakdown: identity on the internet
The conversation with my kids made me realize that many adults don’t really understand the use and benefits of identifiers in advertising. We have all seen headlines about identities being stolen, which further increases the fear of privacy risks and concerns around consumer data, but these concerns can be unwarranted when it comes to online advertising. Stolen information occurs when companies have Personally Identifiable Information (PII). PII includes variables specific to a particular person, such as name, street address, Social Security number, or credit card information. The biggest misconception among consumers is that, in the ad world, most of our data is based on PII, when in reality, identifiable information is not at all utilized with regards to the data powering identity and online advertising.
Some of this confusion may stem from the increasing number of opt-in consent prompts for advertising identifiers, known as consent management platforms, which have shown up with increasing frequency on websites over the past few years. Opt-in consent means that a visitor agrees to let a website follow their activities on their website. This provides the site with data associated with a marker called a cookie, which captures activity performed on a website without revealing any personal information. If you select “no” or ignore the consent question, your data is not collected by the website. What consumers may not understand is that by making this selection, they aren’t saying “no” to advertising, but rather to customizing content to a site visitor–also called personalization. Brands fund the internet through advertising, so without this personalization, you are left with less personalized ads and sometimes really awful clickbait ads. In other words, accepting the consent to track does not reveal one’s personal information and rejecting the tracking does not turn off advertising.
Since advertising is predominantly powered by the non-PII information from cookies, let’s take a moment to understand cookies:
- Cookies are markers placed on an ad that identify information about a user’s profile, including non-PII information such as geography, language, device used, and time of day. Cookies help connect different activities on the internet, which aid in serving ads that are meaningful to the viewer. Have you ever searched for an item on a website and found that same item comes up as an ad on a separate website to remind you to purchase it? This is only possible with cookies. This type of ad is called a retargeting ad.
Next, to understand advertising identifiers, we must first understand the difference between first-party and third-party cookies:
- First-party cookies are markers placed on a website by the website itself. They allow websites to understand customers who are visiting that site. Each website has a different cookie it drops, so first-party cookies cannot be connected across the web in isolation. These cookies are not affected by Google’s announcement of eliminating third-party cookies.
- Third-party cookies are cookies that are placed on a website by a party other than the website itself. These cookies can have the same identifier dropped across multiple sites and allow the opportunity to understand consumer behavior, such as sites viewed before purchase. This behavior is used by advertisers to show content that’s of interest to the audience. For example, my daughter’s favorite TV show is America’s Got Talent; she responded with excitement when shown an ad for Ritz crackers, featuring one of the judges from that show, Sofia Vergara.
Opting-in to online identifiers
Surfing the web together one day, my son received an opt-in consent popup. I saw him go to reject it and stopped him. His reasoning was a phrase I often hear: “I’m afraid they’re going to steal my identity.” But as I just explained, cookies don’t have PII data, so they are not responsible for stolen identities. This continued conversation, connecting the cookie to data security, has created false beliefs, which disempower us as consumers.
The elimination of third-party cookies will not have any impact on stolen personal information. What it will do is limit advertisers’ ability to show relevant ads on the open internet: the part of the web extending beyond the walled gardens of Google, Facebook, and Apple. Consumers benefit from allowing some information to be shared in order to help them see products and services that they might be interested in, while also paying for the information on those websites through advertising, instead of through subscriptions or other forms of payment. So the next time you see an opt-in consent request on a website, it’s important to think about the implications of that action before declining or ignoring it. You’ll gain personalized content that reflects your interests, and you’ll also feel smarter than a 6th grader.
This blog post is part of a series highlighting our Ad Tech Glossary of Terms, a handy reference tool for reviewing terminology on your own. You can read the inaugural post, “The ABCDs of Ad Tech: Audience, Behavioral, Cookie, and Data,” as well as the first two installments in my series on being ruled by the click: “You Can’t Measure Display With a Yardstick or Clicks” and “Phishing for Clicks.”