The 15-year-old cookie is losing its flavor. The third-party cookie, those small files deposited on a user's computing device for tracking purposes, is showing its limits at identifying Web-surfing, multiple device-owning consumers. A new report from Forrester attempts to find out what's next for cookies -- and for marketers.
The central problem identified in the report, Solving The Cross-Platform Targeting Riddle, is that marketers still need to persistently identify an individual consumer, but need to do so across a booming number of device types and platforms while maintaining compatibility with the current infrastructure.
Perpetually Connected Consumers
The challenge is represented by the growth of what Forrester describes as "perpetually connected consumers," or PCCs. The PCC owns and uses at least three connected devices, and surfs the Net several times a day from different physical locations.
This is not a small audience segment. By the end of last year in the U.S., 42 percent of online adults qualified as PCCs, an increase from 38 percent in 2011. By the end of this year, Forrester predicts that nearly half of all online adults worldwide will be "perpetually connected."
And consumers are picky. Forrester estimates that about 22 percent of all consumers expect "any desired information or service to be available on any appropriate device, in context, at their moment of need," requiring individual rather than only segmented marketing.
The cookie was originally designed for very basic desktop functions, but is now being asked to perform feats of Olympic proportions. Cookies come in two general types. First-party cookies are issued by a domain, such as a website, and are used to identify the user when they are at that domain. This might mean, for example, automatically logging you on to a website when you return. Third-party cookies are issued by a domain, such as an advertiser, so that you can be followed from website to website.
The Three Options For Targeting
Forrester points out that there are qualifications about each of the three primary options available for user targeting.
In addition to the cookie, there is person-based targeting and inference-based targeting. Cookies are easily deployed and readily scalable, but are the least accurate for following users across platforms. Mobile platforms, such as Apple's, often block third-party cookies, and cookies are specific to a browser, not to a person. First-party cookies are not blocked by platforms, but they still cannot travel across devices.
Person-based targeting has a higher accuracy than cookies, but does not have nearly as wide a reach. Companies employ a user's email address, a customer phone number, or other personally identifiable hooks, all of which also run the risk of privacy infringement.
Such companies as BlueCava or Drawbridge use statistical inference based on device, cookie and browser characteristics to make an educated guess about a user's identity, and a user's collection of devices and browsers. Forrester says that this method "shows promise but faces very real issues today, including 1) very limited scalability relative to other options; 2) criticisms about its accuracy; and 3) and an air of privacy-unfriendliness."
The Role of Data Management Platforms
The report suggests that a long-term solution could lie in a shift from audience targeting to customer relationship management, where users are enticed to begin and maintain a conversation with the brand because they get something out of the interaction. This puts the emphasis on the customer, and potentially removes the privacy, scalability and accuracy issues.
Forrester, which recently released a report on the current state of data management platforms, recommends that marketers deploy a DMP in order to unify their data collection and targeting. While the research firm has noted that DMPs still do not adequately address the mobile environment because of the current reliance on cookies, it points out that leading vendors are looking to address this issue.
Of course, compiling a massive database of user profiles from a wide variety of data sources, only some of which have been supplied by the user, will eventually raise privacy and accuracy issues of their own. But, Forrester points out, the status quo cannot keep going as it is, given users' expectations, marketers needs, and an explosion of device types that is about to increase manyfold as computing wearables enter the market.
Until a feasible multiplatform, user-targeting strategy emerges, Forrester recommends that marketers get their multiplatform tracking mechanisms in place, make sure that their privacy policies are consistent with their brand values, and get creative in terms of format-specific executions, personalized whenever possible. It's not yet the solution for what comes after cookies, but, as this report points out, it will have to do until the next recipe is written.
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