How Google's New Web Tracking Plan Could Give It A Monopoly Over Facebook And Apple

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Google's plan to replace cookies with a new tracking device called AdID is, in some respects, a giant "screw you!" to Microsoft, Facebook and Apple.

Pretty much all aspects of the internet (except for mobile apps) are largely based on cookies and the data they generate.

For Google — as the web's single largest player — to even suggest that it may abandon them is akin to having your dinner partner suddenly stand up, grab the tablecloth, and fling all the food and plates out of the window.

Cookies are the little bits of software code that web sites use to track your internet surfing. They help sites know whether you're logged in or logged out, and advertisers use them to target you with ads. Critics dislike them because they reduce privacy on the web (even though your data within them is anonymous), but without them the web doesn't work very well.

Google has been losing the war over cookies for a while now. Microsoft has made "do not track" the default setting in its Internet Explorer browsers. Apple's Safari browser blocks third-party cookies altogether. New versions of Firefox will block them, too. Google's Chrome browser stands alone in allowing all cookies as the default setting. Chrome is now the most popular browser, but it is easy to switch tracking off.

Rather than continue fighting that rearguard action, Google seems to be saying, "Hey, let's just start a whole new war over here, around this device called AdID."

Huge sums of money are at stake. Google earns billions from mobile advertising for instance, but cookies don't exist inside many mobile environments or indeed anywhere inside Apple's iOS devices, iPhone and iPad.

Facebook, similarly, has its own login that it can track because people rarely log out of Facebook when they leave to go elsewhere on the web. Facebook gets $6 billion in ad revenue annually — that's needle-moving money that might have been spent on Google if Facebook did not exist.

Advertisers like to be able to compare apples to apples in terms of ad data, so they can see which campaigns performed best. Cookies used to give them that level of comparability. But it's difficult to compare results of a Facebook ad campaign with results of a web-based cookie targeting campaign, because the two campaigns are being targeted off two different types of data. (That's one reason why Facebook launched FBX, its cookie-based ad exchange, and bought Microsoft's cookie-based Atlas ad server — so advertisers can compare results on and off Facebook.)

Apple tracks its mobile users with a device called IFA or IDFA.

And Microsoft has largely exited the ad business, which is why its browsers now signal that users do not want to be tracked.

Google is running out of room on the internet, in other words. Facebook and Apple offer their own non-cookie alternatives.  Google's visibility into those ecosystems is being reduced.

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BII_Global computing platform market share


"Running out of room on the internet" is, of course, a relative term. As this chart shows, Google's cookie-rich Android environment is taking significant share. Microsoft's Windows ecosystem runs on cookies too.

But Google is likely looking 10 years down the road. It's thinking, "How can we box in Facebook, Microsoft and Apple, so that we're not excluded from systems for ad targeting that they control?"

Getting everyone — i.e. advertisers — on board with AdID will likely be the answer.

If Google can prove to advertisers that AdID should be the new internet-wide standard, then it could own a monopoly on ad-tracking data.

Here's Google's likely criteria for AdID, from a speculative but enormously enlightening column by Ari Paparo, an  svp/media products for Bazaarvoice, and a former AppNexus, Google and DoubleClick exec:

  • Take advantage of first-party identity through the Google login (Android, Gmail, etc), while obfuscating the ID [for privacy] so it couldn't be traced back to an individual's phone or mail account;    
  • Cover as close to 100% of users as possible on any device;    
  • Support cross-device persistence;    
  • Support a persistent opt-out;    
  • Avoid the problems with cookie deletion, where IDs get reset all the time and opt-outs get deleted as well.

That's a 100% tracking system blanketing the entire internet, in other words. And if advertisers get on board with Google's plan, smaller competing business — Facebook and Apple, in terms of advertising — may be forced to support AdID. And that could give Google an unbelievable monopoly on the web's tracking data, according to Paparo:

Various clients reliant on the AdID will not be able to share data without going through a Google system or translating the IDs into a common domain, adding a ton of friction.

Another word for "friction" here is profit. if Google can create an ad-tracker that covers the entire Android-Windows-Web environment, and its data is so powerful that advertisers will balk at media that don't use it, then we may indeed be looking at a future in which you can't do business on the internet "without going through a Google system."

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