How you might be tracked in a post-cookie world

As consumers increasingly bounce between PCs, smartphones and tablets, the bits of data that help advertisers track your Web browsing habits are growing less reliable.

By MSN Money Partner Jan 29, 2014 2:16PM

The Wall Street Journal on MSN MoneyA woman uses a smartphone in New York © MIKE SEGAR/Newscom/RTRBy Elizabeth Dwoskin, The Wall Street Journal

The Web cookie may be dying, but that doesn't mean it is the end of consumers being tracked online.

An industry group representing digital advertisers published a white paper Tuesday that examined how online ads would function in a world without "cookies," the small pieces of code that track people's web browsing. In the paper, called "Privacy and Tracking in a Post-Cookie World," the Interactive Advertising Bureau also explores technologies that could replace the cookie.

The upshot: Most replacements for the cookie shift control of the basic technologies of online tracking from large websites and marketers to web giants, namely Google (GOOG) and Apple (AAPL).

The future of the cookie is on the minds of digital advertisers this week as Facebook (FB), Google and other major tech companies announce earnings. The marketing industry relies on the ubiquitous code to target people with ads based on their tastes and browsing habits. But as people's eyeballs move from desktop computers to smartphones, cookies are becoming less reliable. In its press release, the IAB described the white paper as a "first step" toward "eliminating one of the biggest limitations impacting mobile advertising today."

The IAB's first proposal would be to target consumers by the devices they use.

To understand how this differs from tracking today, here's a recap of how cookies work: Businesses such as news organizations and retailers add cookie code to their websites. People opening up browser pages get "cookied," meaning the tiny code attached to them and logs their travels on Web. From there, marketers create profiles of people's interests.

In the alternative proposal, device manufacturers such as Apple, Samsung (SSNLF) and Google's Motorola unit would provide information about people's habits to marketers. The manufacturers would assign each device a unique number that would be shared with servers and advertisers as the consumer browses the Web. When the device is a smartphone or tablet, other data such as the person's location could also be shared. Apple already has a unique identifier for iPhones and iPads that is provided to advertisers.

The device identifier solves many of the problems plaguing marketers that are dependent on cookie-tracking. Cookies can't follow people across different browsers and lose track of people who clean them out. Also, because cookies don't work well on phones, advertisers who use cookies often have trouble figuring out when a desktop and mobile device belong to the same person. They can't easily discern, for example, whether a person who was looking at shoes on their phone early in the day decided to buy the shoes on their desktop that evening. (Facebook, however, offers ways for advertisers to make the connection between devices, but the program is only available to select retailers).

Another problem: it is nearly impossible for marketers to ping people who are walking by stores selling items the person may have checked out earlier on their phone or desktop.

The way the industry approaches cross-device matching today is through sophisticated guesswork. A crop of startups have built complex algorithms that match the location of the personal computer — known through its IP address — and the location of the phone, which advertisers can see when people share their location with apps. If marketers can observe enough devices in the same place at the same time, they can make a reasonable guess that the device belongs to the same person.

By contrast, a device identifier affords perfect accuracy. It also wrests control of online advertising mechanisms from large websites and marketers and puts it squarely in the hands of large companies that manufacture devices.

Device identifiers also potentially provide consumers with better control over their privacy than cookies, which have sparked concerns. With a unique identifier, users could opt out of having their devices tracked, says Steve Sullivan, IAB's vice president of advertising technology. Under the current system, users can't get out of tracking because there are hundreds of companies placing cookies and many ignore people's requests to not be monitored.

The IAB also proposes a single privacy dashboard — an on/off switch — where people can convey their preferences to all advertisers at once.

While the device identifier is most viable, other alternatives in the white paper include conducting tracking through the operating system, which would then pass the information to third parties. That model favors Google, Apple and Microsoft (MSFT), which own the Android, iOS and Windows operating systems, respectively. (Microsoft owns and publishes MSN Money.) Tracking could also be done at the browser level, which would open up the field to other entities such as Mozilla, which operates the Firefox browser.

The IAB's final proposal would be to track information in the cloud, which the paper describes as a "centralized service that all parties agree to work with." That option is murkier, if only because it is unclear who would control and pay for a giant cloud to house all the personal data that the fractured marketing industry relies on.

In an email, Sullivan said advertisers will eventually have no choice but to adopt one of these other methods as cookies become increasingly unworkable.

More from The Wall Street Journal



Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Start investing in technology companies with help from financial writers and experts who know the industry best. Learn what to look for in a technology company to make the right investment decisions.





Quotes delayed at least 15 min