Cookies are Crumbling for Digital Marketers

Acquiring new customers for digitally native brands is about to get more difficult and expensive. According to a recent report byAd serving firm Flashtalking, which analyzed 20 advertisers Worldwide throughout Q4 2017, found that 64% of tracking cookies were either deleted or blocked by web browsers. Rejection rates on mobile were particularly high as 75% of mobile cookies were rejected, compared to 41% on Desktop.

Tracking cookies has been a staple of digital marketing since its inception, and hence has become the defacto method for marketers to track and target online users. But the cookie is crumbling as users shift their digital media consumption to mobile devices and as browsers and regulators crack down on digital privacy.

Cookies were originally designed to track users across the web on browsers. It’s more difficult to track a user who spends their internet time opening and closing mobile apps, since those apps operate independently of each other. In the US, users spend 87% of their total mobile internet minutes in-app, according to comScore. This makes it more difficult to use cookies to track people on mobile than on PCs.

The waning of the prominence of cookies has been accelerated by changes by the most popular web browsers, which are making it more difficult for advertisers to drop pixels onto users’ devices. Last summer, Apple’s Safari browser made tracking users through cookies harder by deleting third-party cookies after one day. In February, Google’s Chrome launched its built-in ad blocker, which weeds out intrusive and annoying ads.

In Europe, regulators are making moves that put pressure on advertisers that rely heavily on tracking cookies. The EU’s General Data Protection Regulation (GDPR), which goes into effect in May, states that people’s personal data can only be used if they give companies permission. Several ad tracking firms have long relied on user data without getting such permission, but since companies that fail to comply will face a stiff penalty, the GDPR will lead to a decrease in third-party cookie usage.

Clearly this is going to continue to impact digitally native brands in a negative way as online customer acquisition continues to creep up to sky-high levels approaching equilibrium with brick and mortar. Don’t believe us, the top 20 digital advertising platforms prices went up 10% last year. Who wins? The consumer of course as their privacy from rampant ads is protected and physical retail as they become the place consumers increasingly are more likely to find and discover new brands and their products. The retail brands who have the best relationships with their dealers will sell more online and offline.