Why One ICO Report Can Change the Game for How AdTech Uses Cookies

Have you noticed how every website you’ve been on recently asks you if you will choose to allow cookies? Wouldn’t it be simpler if they were simply asking you if you’re on a diet or if you want the chocolate chip cookie? But of course, they aren’t. Cookies are websites’ tools for tracking users’ past behaviour to maintain relevance in what the user will see in the future. To this day cookies have been recording your browser activity, which presents a great source for online advertising agencies, especially in RTB (real-time bidding). Through RTB, advertisers optimize ads in multiple ad networks with advertising inventory being bought and sold instantaneously. This process requires a significant collection of personal data to improve the personalized predictive function of RTB.

Well, as you might imagine this system inspired concern among many organizations in terms of data privacy and protection. Most notable of those organizations was ICO (Information Commissioner’s Office UK), which released its interim report on data privacy in AdTech on the 20th of June. The Executive Director for Technology Policy and Innovation of ICO, Simon McDougall said: “Whilst we accept that RTB is an innovative means of advertisement delivery, our view is that, in its current form, it presents a number of challenges to good data protection practices.” Currently, the online advertisement system doesn’t require the explicit consent of users while using their personal data, which should be happening under data protection law. Elizabeth Denham, the Information Commissioner also said: “The creation and sharing of personal data profiles about people, to the scale we’ve seen, feels disproportionate, intrusive and unfair, particularly when people are often unaware it is happening.”

A key way in which this system should change, according to ICO’s report, is that organizations should provide clear information regarding their use of cookies, the purpose behind it and ask for consent from the user. Many companies have been taking action to ensure the legitimate acquisition of content through consent-based data collection. For instance, Google updated its Chrome browser, giving more information to users about how the cookies are tracking their data. Apple has also joined the movement for consumer privacy through restricting the use of cookies, utilizing the new version of its Intelligent Tracking Prevention tool.

Here is the catch though. The new tools restrict third-party cookies but allow new cookies to be received in the first-party context from sites of already established big publishers. So, these updates might be allowing conglomerates such as Facebook, Google and Apple to tilt the ecosystem in their favour, restricting the AdTech competition within the market. It might be favouring Apple’s safari over, say, Opera.

What does all this mean for the advertising and marketing industries in the near future? Well, it will allow the programmatic industry to make sure they are constantly complying to privacy regulations. This has the potential to completely transform the AdTech industry since most of it depends on the breach of data privacy.

But, people are optimistic about what kind of transformation will unfold. Even though AdTech has made the online advertisement process very fast and profitable, it has also diminished its quality and restricted its creativity. It has halted long term brand growth as brands forgot to prioritize customer experience, understanding the audience and what kind of content they want to consume. Perhaps, cookies will now shift focus to target the kind of content being consumed by users rather than tracking their sensitive personal information. This form of contextual targeting is now easier than ever with AI and machine learning allowing content to be understood and categorised by crawlers. This form of targeting can make the advertisement matches much more relevant and desired, providing a solid replacement for the use of cookies for the sake of personalisation. This could also mend the gap between brands’ media planning and creative initiatives.
So, yes, this ICO report might be the beginning of the end for programmatic advertisement as we know it. But, maybe it’s for the better. Maybe it’s just what the industry needed to bring quality, true privacy and creativity back to the table.