How web privacy changes & tracking prevention are shaping advertising w/ Allison Schiff, AdExchanger
hey everyone welcome to the mobile user acquisition show in the mobile user acquisition show we talk about how to use mobile user acquisition strategies to grow your app quickly and capital efficiently the mobile user acquisition show is presented by me shaman rao mobile growth leader and founder and ceo of the mobile growth consulting firm rocketship hq each episode includes strategies tips and pointers from the leading edge of mobile user acquisition that you can use to unlock tremendous growth for your app in a sustainable and capital efficient manner device measurement and the app economy with an increasing focus on privacy and its regulation we've covered the upcoming ios 14 privacy changes that are impacting primarily the app economy in a lot of detail in other episodes today we are going to talk about very similar privacy trends in the web space which have happened in a manner that's very comparable to what's happening on the app's front except that some of the changes on the web for precede what's happening with ios 14. in today's conversation allison dissects how privacy has evolved in the web space what the key browsers are implementing how that impacts businesses and web businesses the world over more importantly what to expect in the near future for a great contextualization of what's happening across the digital space both in apps as well as on the web this is a great episode to know and understand exactly what's going on i'm very excited to welcome alison schiff to the mobile user acquisition show alison so thrilled to have you today thanks for inviting me yeah i'm excited to have you just because i think every time we've spoken you had such an insightful point of view on how a lot of digital is evolving how a lot of digital changing and you always ask very good questions so in some ways this is sort of reversing the tables from our earlier interactions and failed for this yeah it's always a little uncomfortable to be asked the questions i've been a guest on just a very small handful of podcasts and i have more compassion now for the people who have to answer being the one who's answering which you don't really have that as the interviewer but it's humbling yeah well i'll try not to be too difficult in this one excellent so we're going to talk about how privacy changes on the web are evolving because certainly on the podcast we've talked earlier about a lot of privacy changes that's happening on mobile apps but i think there's much before the changes with apps the changes on the web have been happening and very substantial changes too a good place to start would be to look at where a lot of this began and it's my understanding that safari and firefox have been at the forefront of driving a lot of the privacy changes so why do you think this has been the case why do you think they've found it to be important to drive this a cynical take might be that apple and mozilla don't make all that much money from web advertising as opposed to chrome but which is about to make in about a year's time a really big change to how third-party cookies are treated by the browser but less cynically both safari and firefox have made privacy a priority for a long time they're not johnny come lately's on that front they've been really focused on privacy and security for years and intelligent tracking prevention on safari in particular that's been a big deal and there have been a lot of iterations i think we'll get into some of the details but even though those were big changes and firefox also made changes of its own i think google's planned phase out of third-party cookies that is really going to shake things up that's the case because a lot of money that had been going to safari flowed into chrome and now that chrome isn't as comfy of a spot the big question about what's going to happen to to add revenue yeah i think these are very substantial changes and i i would like to dig into a lot some of these aspects as we go on to start with what are the specific privacy changes that firefox and safari have been driving can you dig in a little bit deeper and explain exactly what these changes are yeah safari and firefox both block third-party cookies by default but their approaches are a little bit different in terms of how they implement their anti-tracking technologies so safari's anti-tracking approach is called intelligent tracking prevention like we just mentioned and firefox their version is called enhanced tracking prevention so itp and etp and there have been tons of iterations of itp over the last few years but in a nutshell apple started rolling it out in 2017 part of webkit and the aim is to prevent cross-eyed tracking by putting limits on how first party cookies function so apple uses machine learning algorithms to section off any first party cookies that have tracking capabilities and puts a timer on how long they're viable just to take a quick detour into the sort of game of cat and mouse that was for a while and at ad exchanger we covered a lot of this the original version of itp made it so that a site could only track a user for 24 hours after a visit and if that person didn't visit again for 30 days they'd get purged and then companies tried to get around that by doing funky redirects and then apple got hip to that and so they got rid of the 24-hour grace period for tracking and measurement and then facebook came out with a workaround which was a first party cookie option for its tracking pixel so then itp 2.1 started to require consent to drop cookies like etc etc all the way up to march of this year when apple pretty definitively came out and just said we are going to crack down on any attempt to work around itp on enhanced tracking protection from firefox a lot of people refer to it as firefox's version of itp but it actually predates itp because firefox started working on it in 2015. and i think it's mostly focused on third-party cookie tracking unlike itp and then also unlike itp because they use machine learning to detect tracking cookies firefox uses a list of known trackers to block scripts by default and that's everything from cross-site tracking cookies to like crypto miners sure and to ask a potentially noob question what's the first party cookie and what's a third-party cookie is there such a thing as a second party cookie the simplest definition of a first party cookie is that it's created by the actual website that somebody is is visiting and it can be used to personalize the experience on a site and remember someone's logged in state so it's set by the publisher's web server and then a third-party cookie is created and set by a website other than the one that you're on like a facebook like button or double click like those are our two classic examples that might seem relatively black and white but there is a nuance to point out there which i referred to before which is companies trying to do some funky stuff and get around some of the restrictions that the browsers are putting in place like redirects that you send somebody really quickly to a page or domain owned by the tracker so that you can re-characterize a third-party cookie as a first-party cookie there's also one other point i would make about first party cookies they are tracking cookies they're just limited to the domain they were dropped on and sometimes the way people talk about first party cookies it's like they aren't also trackers but they are first party cookies are generally considered to be less problematic than third-party cookies but you can still use them for defining audiences you can use them for targeting and safari has actually really cracked down on their use with itp and um you asked about second-party cookies so basically second-party cookies like second-party data they're just transferred from one company to another through some sort of data partnership like billing it's first-party cookies along with bits of data like email addresses or whatever to some other brand through a set partnership for ad targeting or maybe some other purpose gotcha no that makes sense so just so i understand when you say look first party cookie is something that's set by the website itself so let's just say the facebook pixel is an example of a first party cookie it's set by facebook to track users who are on facebook but this also tracks the user around the web the challenge with something like the facebook pixel is that it actually is a third-party cookie because through things like the like buttons and other functions and widgets that appear on pages like that gets dropped and then there's data sharing through all of those different connections understood so because a user is tracked across multiple websites by different facebook pixels and facebook aggregates 20 different pixels across many different it really a third-party cookie is that an accurate understanding yeah that's the way i understand it if you liked something on a particular website that had the facebook like button embedded and then nothing ever happened after that i guess that would just be considered a first-party relationship although honestly i don't really know exactly how it works considering facebook which is a separate entity is understanding what someone is doing on some other website it's tracking that like and then it goes on from there yeah and since you mentioned on firefox and safari there's already been a crackdown a lot of third-party cookies are just completely disabled at this point of time what happens if you are accessing facebook ads do you just see completely non-personalized ads on safari and mozilla i i believe so i think there's been a lot more focus on things like contextual and most of the ad targeting happens at least for the moment in chrome it's not that you can't do uh targeting in safari for example but there are just limitations and so you can't do cross-eye tracking but you can do personalization on a specific domain when there's consent and there's a first party cookie dropped but it's just far more limited by design right so on chrome and safari the website would remember your login your password and whatnot because that's a first party thing but you may not necessarily see super targeted ads in a manner that you might see on chrome right although there is a challenge with the the facebook login i actually don't know exactly what the status is right now but limits on third-party cookies have had like we were saying it's an impact on social plug-ins so facebook analytics facebook login safari will delete facebook.com cookies if people don't
visit regularly so if you don't hit up facebook on i guess a daily basis then you have to re-authenticate you want to use something like a like button or other facebook widgets like comments and sharing so it does have a bit of an impact on the user experience although i believe there are some fixes for that because i i know it's not apple's intention to mess with the user experience right so these fixes or workarounds how effective are they and what are some examples of some of the more prominent fixes so there really aren't workarounds there's nothing you can do to get around the intention of something like an itp but i believe that there are some carve outs in safari where they will allow someone to remain in the logged in state when there's consent stuff like that where the user experience doesn't have to be affected just because of all of this stuff going on in the background yeah packing cookies user experience stuff is really top of mind but anything that's trying to circumvent the inherent intention of these anti-tracking technologies are sort of sol yeah and how does all of this impact publishers let's just say there's a small website that makes a lot of money through adsense how might they be impacted i would take a step back for a second like look at the current state versus what might happen and like with a backdrop of thinking about the browser market by market share so you have chrome safari and firefox the three biggest browsers chrome is the biggest by far i think chrome is at least in the us something like five times as penetrated as firefox and then like six or slightly more than six times as penetrated as safari and so web publisher revenue is heavily reliant on personalized advertising and so it would only go to reason that when personalized advertising doesn't work as well in certain environments that revenue is going to go down but i don't think there was a massive dip in revenue for publishers after safari really got started with itp because the browser share is so small i mean you could argue it should have been writing on the wall and i do think that some publishers started to think about their first party data strategies as that started to happen but a lot of other publishers just sort of shrugged their shoulders and put their head in the sand and then focused more on chrome where they could still have the status quo and chrome absorbed a lot of that revenue and the same for firefox and so for now at least it's my impression that revenues haven't plummeted but that chrome's decision to phase out third-party cookies is this whole other thing and that's going to have a big impact and it's why the whole attic industry is sort of freaking out right now and casting around for cookie-less solutions and working on alternatives and messing around with the w3c and trying to get people to share their email addresses the unified id 2.0 so i do think there'll be a notable dip in revenue when chrome finally stops supporting third-party cookies early next year and cpms will probably go down if there is an audience targeting outside of the world gardens at least and i i caveat that with for now because there is a year left solutions will crop up and all ad dollars can't go to the walled gardens not all of them right especially if you want a fourth estate if you want journalism which i which i do certainly and of all the alternate solutions that you mentioned are there any that you think are more likely to succeed than others well the consensus when you talk to really anybody is that there's not going to be one solution that wins it's going to be some sort of hybrid thing and so a lot of people are trying a lot of things and then what we'll net out with is a bunch of alternatives that don't ladder up to a replacement for third-party cookies but just a new way to think about targeting online so i do think the unified id 2.0 which was initially spearheaded by the trade desk has a lot of legs there's a question i think about how smaller publishers will be able to participate because they have more reliance on advertising to support their revenue and maybe less of a capability to get people to sign in and authenticate but there's a lot of momentum there and so the fire has been lit under the collective butt of the industry there have been efforts at consortiums before and they really fell apart but now there's an imperative to do it so there's that and i think we'll see some success with it and it's really still coming together another one that i think we might talk about in a bit is publishers trying to think more about how they get their first party data assets like really really working for them so there's that as well and in tech vendors everyone and their mother is coming out with some sort of cookie-less solution my inbox is absolutely jammed with pitches about cookieless solutions from everybody what's a cochlear solution well just some sort of alternative often using context to try and target people without relying on cookies it's funny cookie list has almost started to become synonymous with identifier-free i've talked to people and i say what do you mean by just cookie lists like well cookie lists and also when maids go away i'm like well they're different things but okay i feel like people have started using cookieless as shorthand for everything from cookies to mobile advertising id every kind of identifier isn't really clear yeah yeah it's a somewhat of a catch-all phrasing how have advertisers been impacted thus far and how do you think that they will be impacted while chrome goes down this path too i do think programmatic advertising is going to be really effective the programmatic ecosystem is really reliant on cookies especially third-party cookies for everything from personalization and audience creation and targeting and retargeting and measurements and analytics and so they really do need to find some sort of alternate way to target ads and personalize campaigns but on the open web and then publishers will have to focus more on their first party data assets which they should have been doing all along but advertisers in the short term will most likely spend more money with facebook and google because those are places that they do know who they're hitting they have identity so i i don't think the open web is in trouble but it's at a nexus sort of like an inflection point sure and you think more dollars will go to facebook and google even though facebook and google cannot track people around as they are doing today well i mean just because of the scale that they have and it's still better than openvent you say there's going to be a lot of contextual buys i know the kind of reader who reads a cooking blog is xyz type person i know the kinds of people that consume tons of political news might also be other things and they're very clever contextual didn't have a lot of investment for a long time and there's going to be a lot more and it's going to get more sophisticated i mean you can read cnn and be a facebook user facebook has billions of users and they they see a lot of activity and they see the kind of content that people consume they can see what news articles people are reading and from where and people are starting to make purchases facebook in particular is getting really into commerce and so i think a lot of advertisers will at least in in the shorter term while alternatives are still being spun up they'll just retreat to that safety yeah and you at least have the scale of facebook and google's user base to sync something else you touched on was really first-party data and you also said you will start to target users who visit cooking blogs or users who read let's just say wall street journal for example what does first party data mean in all of this context and how do you see that being used going forward just as one other point about say like a cooking blog or a sports blog or something i do think those kinds of publishers are are pretty challenged i mean you do know what the context is but they're very reliant on targeted advertising and then also hitting up those same users elsewhere so i do think you know even though they have very clear context they're also pretty challenged a lot of web publishers in general from small to large they just feel over the years they've been disintermediated from their audiences because they are the ones with the first party relationship and then middlemen and tech vendors just stepped in and sold the promise of programmatic and then made the supply chain into the muddy mess that it is today and so publisher sites are stuffed with third-party tags and some publishers don't even know which tags are on their site and data is leaking everywhere but media companies realize that they are the conduit to user identity they're making the content they're generating the quote-unquote value in value exchange and so they feel a little powerful about it right now and when third-party data goes away first party data will rise in value and so some publishers have a head start like i was saying they started to develop their first party data assets when safari started making its moves back in 2017.
and making moves can mean a lot of things in practice some publishers we're talking about sign-on alliances so are some outside companies like trade desk like we said with unified id 2.0 and some publishers are involved in that initiative like the washington post and a lot of publishers that they have through their network which is called zeus and that would be a way to scale first party data assets because it's a little bit challenging even if you're the new york times you only have a few million visitors it's many millions as opposed to hundreds and hundreds of millions um so that's why some publishers are thinking about what it might mean to form second-party data relationships based on their first-party data relationships you've seen a lot of publishers make moves like news core has an identity graph of its own vox media has its own first party data platform since i think 2019 meredith has in-house audience insights platform and an activation platform so they're making a lot of moves yeah interesting so it sounds like a lot of publishers have been preparing in some way for what's going to unfold what has unfolded and what will unfold but again a lot of companies you refer to uh somewhat larger advertisers that the ability to put significant resources behind preparing for these eventualities so what happens to smaller advertisers or smaller publishers let's just say maybe an independent econ store or a cooking blog that makes a lot of money from adsense they don't have these resources to just build first party data assets what if any might be some of the options in front of these folks it's a really good question and if i knew the answer i'd be rolling in the dollar bills i would come up with my own solution but i do think it's going to be hard for them to make a living and programmatic advertising becomes less of a revenue driver for them and programmatic advertising has become shorthand for personalized targeted advertising even though of course you can programmatically do many things i don't mean to be like a broken record but i assume they'll start to rely more on tools provided by the big platforms it's just like a theme flight from the open web they will also have to rely on the bigger platforms and any tools that they might provide because i don't know what will come out just yet but i'm sure facebook and google will google is working on its privacy sandbox stuff which might not necessarily be helpful to smaller publishers but i do envision that the large platforms will swoop in to quote unquote help the the little guys but yeah there's a lot of work being done at the w3c right now in the privacy sandbox actually just today as we speak on friday january 8th the cma which is the anti-competition authority in the uk is starting an investigation into privacy sandbox and whether it might be anti-competitive so i mean there's just so much influx and so the question of what do small publishers do what is it yeah smaller publishers they'll just have trouble retargeting their own audiences off of their sites and they're just they're scrambling right now i think or not thinking about it magically than how it resolves yeah that's an option certainly yeah listen so there's a lot of things in flocks a lot of things are changing and i guess the thing one thing people can do is be informed and keep their eyes and ears open and move quickly i imagine yeah i certainly have learned a lot about the web landscape just knowing and understanding what is unfolding just from talking to you just now this is that's a good place for us to start to wrap up i'm curious if you had any closing thoughts or anything to wrap up with well i don't know if this is silly you know how everyone was constantly talking about the year of mobile until you wanted to just bash your head into a wall i think we might be entering a year of identity but i think that like 2021 actually is and has to be because there is the deadline of 2022 that google has set for deprecating third-party cookies in chrome i mean it's possible that deadline gets extended a little bit but it's an imperative at the very least it's the year that i have to write about identity until i want to bash my head into the wall yeah yeah certainly there's going to be a lot written about it a lot spoken about it we've spoken about a lot of the changes on the app's front and interesting and significant to see this is not just a app specific or apple specific thing but this is a trend that's somewhat overarching in the digital space across the digital space that is perhaps a good place for us to wrap alison but before we do that can you tell folks how they can find out more about you and everything you do sure i guess it'd be great if you could read ad exchanger ad exchanger.com and i'm actually really good at answering email i didn't always used to be but it was a new year resolution from a couple of years ago so a-l-l-i-s-o-n adexchanger.com and my twitter is
pretty much useless unless you like seeing retweets about cat gifts and funny cat news but you can follow me on twitter if you want to at osha feed o s-c-h-i-f-f-e-y but it'll be kind of a fruitless exercise but i do love creeping on twitter so i'll probably follow you excellent well lots of people might be into cats but we will link to all of that and this is perhaps a good place for us to wrap alison thank you so much for being on the mobile user acquisition show thank you for more tips pointers and strategies from the leading edge of mobile user acquisition subscribe to our youtube channel right here or check out our blog rocketshiphq.com blog