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How the advertising industry is preparing for life after cookies

If you’ve spent any time on the internet over the past two years, you’ve almost certainly encountered website pop-ups asking you to accept “cookies.” And you’ve probably asked yourself, What exactly is a cookie?

Cookies might be indecipherable to the average consumer, but they’re hugely important in terms of how the internet operates and pays for itself. For more than two decades, cookies have been the primary method for driving relevance in advertising on the internet.

Changes to internet platforms’ privacy policies threaten to render cookies obsolete in the near future, leaving the digital advertising industry to find a viable alternative.

Hence the emergence of identity solutions like Unified ID 2.0, an upgrade to cookies that preserves the essential value exchange of relevant advertising, while improving consumer controls. Many believe that Unified ID 2.0 will be one of several solutions that will replace cookies as an industry standard. Unified ID 2.0 is just as inscrutable a term as an advertising cookie, though. So to help you better understand language of internet identity, we’ve answered some basic questions you might have.

Let’s back up. First, what’s a cookie?

A cookie is a tiny piece of software code that gets installed on your web browser when you visit a website. Cookies help the website identify you and recognize you on subsequent visits.

For example, your favorite retailer puts a cookie on your web browser when you visit the stores website, for example. (A so-called “first-party cookie.”) That allows the retailer to recognize your account so you don’t have to sign in every time you visit.

Carry on…

But there are also third-party cookies, which are created by companies other than the website the user is visiting, such as advertising companies. Third-party cookies enable advertisers to serve up digital ads relevant to the user’s preferences and interests. These ads, in turn, help fund the content that the user enjoys. The more relevant those ads are to the user, the more valuable the ad is to the publisher, the better content they can produce.

In an ideal world, cookies are also intended to improve the consumer experience, too. If advertisers have a better sense of consumer interests, they can deliver ads more relevant to those interests. Imagine not having to watch endless ads for products we’re not interested in?

Why are cookies going out of fashion?

Cookies are an archaic technology. They were first developed in 1994 when inventors at Netscape realized that, without a technology such as cookies, websites were essentially blind and deaf, and therefore not well suited for commercial activities, such as selling stuff.

However, we’ve come a long way since 1994. For one thing, the internet is everywhere, not just on your desktop. More and more internet usage now occurs in mobile apps and connected TV devices, where cookies are largely irrelevant and new identifying technologies have been developed.

At the same time, major tech platforms such as Apple, Firefox and Google have all started to limit the use of third-party cookies on their web browsers.

Yikes. What’s the industry going to do?

The simple answer is that the industry needs a better alternative to cookies: One that works across all digital channels; one that better explains its value to consumers; as well as providing the consumer with greater control.

Enter Unified ID 2.0. If the cookie was the ad internet’s first universal identifier, then Unified ID 2.0 is a new and improved version. And in lieu of cookies, Unified ID 2.0 uses consumers’ anonymized email addresses which is gathered from a user logging into a website or app (mobile or connected TV).

Why is it called Unified ID?

When a consumer logs into a website with their email address, an identifier is created based on a hashed and salted, or anonymized version of that email. The identifier regularly regenerates itself, ensuring security. At the point of login, the consumer gets to see why the industry wants to create this identifier and understand the value exchange of relevant advertising, in simple terms (unlike today’s cookies). They also get to set their preferences on how their data is shared. So the consumer is in the driver’s seat.

If the consumer is logging in through a supply partner that’s interoperable with Unified ID 2.0 they get the added benefit of being automatically logged in to any site that’s part of that supply network.

So... who’s behind this thing?

Part of what made cookies so useful is they were the industry standard. Everyone — brands, publishers, ad tech companies — used them. The same dynamic is starting to happen with Unified ID 2.0.

Pretty much the entire ad tech ecosystem has signed on. Index Exchange, Magnite, PubMatic, OpenX, SpotX, Criteo, LiveRamp and Neustar are all on board. Publishers such as MediaVine and FuboTV are now part of the UID community, along with The Washington Post and their Zeus technology platform that powers over 100 other media publishers including some of the leading daily newspapers in the US. Nielsen, the gold standard in media measurement, is making Unified ID 2.0 a core element of their upgraded measurement portfolio.

How does privacy factor in here?

It’s huge. One of the biggest knocks on cookies, and the primary reason they’re going away, is growing concern and regulation around user privacy. UID 2.0 aims to fix that problem in several ways:

  1. Anonymization. A person’s UID 2.0 contains zero information about who they are in the real world. Rather, a person’s UID 2.0 is a string of number and letters that cannot be reverse engineered to an email address or any other form of identification. The UID 2.0 system also has no central storage of the mapping of UID 2.0’s to emails (there is no notion of ‘state’).
  2. Greater control for users. UID 2.0 allows consumers to log in and monitor and adjust how their personal data is being used.
  3. Greater transparency. When consumers opt in, it allows publishers and advertisers to give them a more personalized experience. It also allows many publishers to provide consumers free access to their websites, because of the value of the advertising. UID 2.0 will also better communicate this value exchange with consumers in a way that never consistently happened with cookies.

Identity