March 5th, 2015
Firefox’s announcement to block third party cookies wasn’t a huge surprise, even if Mike Zaneis, the American IAB’s SVP for Public Policy and General Counsel, said Mozilla’s new policy amounted to “a nuclear first strike against the ad industry.” Safari has blocked third party cookies for years and Microsoft has been resolute in pushing ‘Do Not Track’ as the default setting in Internet Explorer. So Mozilla’s decision is essentially part of a growing trend, rather than a bolt from the blue*. If anything, you’d have expected the one major open source browser, with no direct stake of its own in ad tech, to have been the first to take action on privacy.
Just to get an idea of the scale of the problem, Firefox browsers currently represent about 20 percent of desktop browsers globally:
So which aspects of video advertising are most likely to be affected by Firefox’s default rejection of third party cookies?
Retargeting and Sequential Storytelling
Retargeting is pretty much dependent on cookies, although it tends to be a performance-driven activity and retargeting purists — often working on a CPC or CPA basis — tend to use display advertising, which offers cheaper and more widely available media (which makes it easier to find the users you want to retarget), lower ad serving costs, and the opportunity to use dynamic creatives that can be tailored according to user behaviour.
However, video advertisers occasionally use retargeting too, so for now it seems that most Firefox users will be off the grid. Retargeting is also sometimes used for ‘sequential storytelling’, which enables advertisers to show users a variety of ads in sequence, in order to tell a brand’s story and provide a more engaging, less repetitive experience for the user. In the absence of third party cookies, a person using Firefox would be more likely to be shown the same ad again.
Frequency capping, the act of limiting the number of ads you show a person, depends on the use of third party cookies. Losing the ability to frequency cap means that an advertiser might be forced to serve ads to someone who clearly hasn’t shown any interest in seeing them It’s going to be interesting to see whether this is something Firefox users pick up on or not, and how the experience compares with receiving a more personalised ad experience. Expect to see more men humming the Bodyform theme tune.
Measurement and Reporting
In the short-term at least, cookieless Firefox users will be off the grid when it comes to campaign reporting. While this would have implications for reporting at all levels, it’s particularly going to hit the ad tech stacks being built by Google and Adobe. One of the main reasons the ad tech giants have been building up multichannel stacks is to help advertisers to optimise their spend across different channels e.g. perhaps a user should be shown three video ads, five display ads and one search ad before they’ll be likely to convert. However, reports on things like ‘path to conversion’ reports depend on third party cookies to provide a complete picture, which is going to create additional wastage for advertisers.
* The only truly surprising aspect of this story is that this move was made by Mozilla after signing a deal in 2011 with Google that was estimated to be worth $300 million per year, which is of course revenue that is partly generated by advertising dependent on the use of third party cookies.