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Why we may need third-party cookies after all

Why we may need third-party cookies after all Keith Fagan

The third-party cookie -- also referred to as the HTTP cookie, web cookie, internet cookie, or browser cookie -- has been much maligned in recent years. Consumer privacy groups and industry bodies have rightly raised concerns around consumers' online privacy, data, and security, and have advocated for its demise. This has led to developments such as increased regulation -- like the European Union's ePrivacy directive -- as well as efforts to development into alternative tracking methods led by major players such as Google and Facebook.

Pundits have been predicting the end of the cookie in the EU for years, and the ePrivacy directive has provided needed clarification on privacy and use in those countries. However, the third-party cookie is still employed in the EU, and no viable alternative has yet to emerge.

Make no mistake: Consumers deserve to have their privacy respected, and need to be given notice and a choice as to how their data is used. A few recent faux pas -- such as Verizon's use of super cookies and AT&T's proposed plan to charge consumers separate rates for not tracking their internet behavior -- have caused the public to again question the value of the cookie. However, before we do away with it in the name of privacy, let's examine the benefits -- there's much to be thankful for when it comes to all that this small text file provides. I would argue that, without it, much of the richness and variety of the internet might not exist.

We know that the third-party cookie isn't perfect: It requires everyone to play by the rules and respect consumer notice, choice, and privacy. Consumers should have the right to be notified about how their data is being used and have the ability to opt out. However, the internet is not free -- with paid subscriptions dropping and paywalls providing mixed results, many publishers -- particularly in small or medium size publications -- make a living by delivering targeted advertisements, which are enabled by the cookie, alongside their content. 

In effect, content on the internet appears "free" because consumers pay with their eyeballs and their data. Publishers have the right to limit content access to readers whose cookies are disabled or who run ad blockers. Ad blockers in particular deprive publishers of their ability to make a living.

Privacy and other concerns have given rise to the idea of a universal single unique identifier as a replacement to the third-party cookie. However, before we throw out the baby with the bathwater, we need to realize that the single unique identifier in its current state -- the social log-in -- might not be the solution. While the cookie is anonymous, its potential first-party log-in replacements are less so, as they are typically tied to an email address.

In addition, reducing publishers to a single set of unique identifiers removes their independence. Publishers could become beholden to the provider of the single unique identifier for insight into their audience and for monetization, limiting the choice of partners with whom they can work. A reduction in choice means that publishers would be at the mercy of just a few providers, who could change their service or terms and conditions at any time. In addition, this reduction in choice could also concentrate all online data and linkage into one provider, creating a virtual monopoly with all its potential dangers.

Growing up in the 1970s, there were only four channels that mattered on TV -- ABC, NBC, CBS, and (some might argue) PBS. The internet currently has an infinite number of channels, so let's not reduce it to four. Until we can come up with a single unique identifier that is truly universal -- that protects the openness of the internet while providing notice and choice to the reader -- let's celebrate the third-party cookie for what it has done to help democratize the web.

Keith Fagan is senior VP and GM of data solutions at sovrn

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Keith Fagan is Vice President of Data Solutions at sovrn Holdings, Inc. where he is responsible for defining and creating custom and proprietary branded audience and content data segments. Keith is a 20-year veteran in multi-channel marketing...

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