BackGoogle puts lid on cookie jar and ends an internet era
Privacy concerns and technological innovation are changing how users are tracked online, but targeted ads aren’t going anywhere
PremiumThe cookie is dead. Long live the cookie.
Google, the internet search giant, said this week that it’s done tracking us as we skate around the web. It promises that after fully eliminating its use of third-party cookies over the next year, it won’t adopt replacements that essentially do the same thing.
That doesn’t mean Google won’t continue scooping up first-party information it collects directly from users when they visit sites and services it controls. It also doesn’t mean that all of the machinery elsewhere that identifies the web’s denizens and serves them ads and other solicitations tailored to their specific interests is going to evaporate.
But it does mean that a very particular and early chapter in the internet era is coming to an end. That era was defined by computer-based web browsers made potent by a number of innovations, with cookies being, perhaps, first among equals. Cookies allowed a browser to remember its users, making the web much easier to navigate. They also helped popularize and commercialize the web, ultimately spawning, alas, a universe in which personal privacy was easily compromised and the same ad for beautiful leather boots, pop-ups, notifications and other flotsam clung to users wherever they went.
Lou Montulli, a computer programmer working for an obscure startup, Netscape Communications Corp., invented cookies in 1994. He named them after “magic cookies" deployed by data scientists to perform routine computer operations, and his blog offers a clearheaded justification for them.
Without cookies, “each time a user clicked to move to a different page they would become just another random user with no way to associate them with an action they had done just moments ago," he writes. “This is a bit like talking to someone with Alzheimer’s disease. Each interaction would result in having to introduce yourself again, and again, and again."
Netscape’s browser, available to anyone with a PC, was a sensation when it debuted, and it effectively marked the beginning of the internet era. Within a couple of years, first-party cookies had morphed into third-party cookies, and companies such as DoubleClick (which Google later acquired) were using them to serve ads to users wherever they went. They also allowed companies to snatch people’s data without their permission and turn around and sell it. Privacy concerns soared, and such was Montulli’s power at the time that a decision about disabling third-party cookies was left to him.
Montulli opted to leave them in place, convinced that their presence was as transparent and manageable as possible. If cookies were uprooted, advertisers would find new tools to accomplish the same thing and, he writes, “we would be trading out one problem for another."
The decades that followed saw an innovative boom in ubiquitous and nearly unavoidable digital advertising, with retail, publishing, entertainment and communications titans dislodged or reinvented along the way. As my Bloomberg Opinion colleague Alex Webb noted this week, much of the internet was only “free" because the advertising gold mine paved the way — while users, through cookies, turned over valuable boatloads of detailed information about themselves.
Google emerged as a colossus in that world until the social-media revolution turned Facebook into a viable competitor. Google and Facebook jointly inhaled nearly three-quarters of the $300 billion spent on web advertising in 2020, according to the World Advertising Research Council. Now, with regulators worldwide cracking down on Google, Facebook and other tech giants over privacy concerns and anticompetitive behavior, the cookie has landed on the chopping block.
Technological change also fueled the cookie’s demise. Consumers have spent years flocking to mobile devices and apps, which don’t accommodate web-based cookie-tracking as effectively as desktop computers once did. Apple’s Safari browser and Mozilla’s Firefox browser already have default settings that block third-party cookies, so Google will be playing catch-up by embracing more of the same on its Chrome browser. Still, it’s a seismic event when the company that blossomed because of cookie-driven advertising revenue decides to call it quits.
Google also doesn’t appear to be worried that its business model is threatened. Marketers have been bracing for this moment for years and have already developed alternatives to cookies that will allow them to continue tracking how people journey around the web — albeit with less specifics about what each individual is up to across a multitude of sites. Google has already developed digital tools as part of a “privacy sandbox" that serves ads targeted at like-minded groups of people rather than individuals.
As Bloomberg Intelligence analysts have also noted, newfangled artificial intelligence technologies and enhancements in machine learning are likely to continue to make ad targeting precise and lucrative. Companies that don’t embrace AI “risk extinction," the analysts pointed out. So don’t expect Google to sit this one out. It has alternatives for delivering targeted ads, and instead of pursuing that lucre like a nefarious stalker, it’s likely to do so more anonymously. And its first-party data, the information it still vacuums up when users employ its products, is likely to become more valuable as third-party data sources shrivel.
“People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising," wrote David Temkin, a Google executive, when his company announced it would find alternatives to digital ankle bracelets. “And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising."So the way users are tracked will change, but it’s not clear how much of a say, if any, individuals will have about controlling all of that.
The cookie is dead. Long live the cookie.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Timothy L. O'Brien is a senior columnist for Bloomberg Opinion.
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