Tracking The Fallout From Safari's Tougher Cookie Stance

Safari may represent a relatively low share of browser traffic, but the Apple browser’s Intelligent Tracking Prevention (ITP) could have an outsized effect if it redefines which technology companies can access cookie data.

ITP, a cross-site tracking restriction feature with the new iOS 11, builds on Apple’s pre-existing rejection of third-party cookies with a machine-learning-based algorithm that probes Safari for cookie trackers and could block the cookie if it doesn’t see a first-party connection to the user. ITP also limits the time a vendor has to access a client’s first-party cookie to 24 hours.

All vendors are not equal under Apple's policy. Those that silo cookie-based data within a single website or app are favored over those using cookies beyond their first-party origin.

Safe Zone: Analytics

Companies like Chartbeat or Parse.ly help site operators collect and understand web traffic, but don’t connect individuals across their customers’ properties. That's different from ad tech and retargeting vendors, which link cookies across a network of sites to run more profitable ad campaigns.

What Safari’s ITP has done “is put the onus on the site owner and vendor to understand which category a deployment falls into and get explicit consent,” said Parse.ly CTO Andrew Montalenti.

Neither Chartbeat nor Parse.ly will require product changes to account for Safari’s ITP, according to their product leaders. Only vendors that “skirt the spirit of the rule” will be forced to make technical changes, said Joshua Schwartz, head of engineering at the site analytics company Chartbeat.

“Chartbeat doesn’t connect a customer’s first-party data to outside data,” Schwartz said. “And I expect with this update it will be much more difficult for vendors that do that without having an actual consumer relationship.”

Duopoly Skates

Companies with user bases and the most scale – Google, Facebook and, to a lesser degree, other social channels – have an advantage over smaller publishers under ITP. Most Google and Facebook users return every day, but the same isn’t true of ecommerce merchants or media sites, so the big platforms hold onto their chain of identity even though Apple scrubs cookie data after 24 hours.

Google, Facebook and other platform trackers also hold a first-party relationship with users that benefits them under ITP. People directly opt in to Facebook and Google but don’t see or understand the connection between an ad platform like Criteo and, say, the Barnes & Noble website where they purchase a book.

Retargeters Penalized

Criteo, the largest retargeting specialist, will be challenged by ITP.

Dan Salmon, managing director of media and internet investments for BMO Capital Markets, published an investor note Monday reducing Criteo’s 2017 revenue forecast by 2.5% due to ITP. He also said minimal impacts this year will become more meaningful as users upgrade to iOS 11.

On Criteo's earnings call this week, CEO Eric Eichmann said ITP will cost the company $20 million in the final quarter of the year as iOS adoption picks up.

But Criteo has pulled ahead in the past by working around browser policies more effectively than competitors, CEO Eric Eichmann said about ITP during a company event this month, and “those with scale and solutions will represent superior products.”

Criteo says it has a plan.

“We’ve evolved over time according to policy changes for Apple environments in particular,” Eichmann said. “And we have ways of circumventing ITP.”

Some ad tech players are making the case for an exemption. Rakuten Marketing, an affiliate network and retargeting company, should be viewed under ITP as having a first-party relationship with many of the people it targets, said CEO Tony Zito, based on its ties back to the ecommerce giant Rakuten.

Rakuten has been developing a single user-ID system starting with its primary Japanese properties. It's now generalizing that system to international properties like Rakuten Marketing, Zito said.

“I’m not prepared to say ‘This is the direction we’re going,’” he said. “But as a cookie-based service it’s a unique opportunity for us to sit in the first-party arena.”

Zito said his company built tools to monitor Safari campaigns for the expected drop-off in performance, but hasn’t seen effects yet. Safari represents a single-digit percentage of traffic and “has always been a weak spot for the whole industry of cookie-based tracking, so this doesn’t hurt too much.”

Tech vendors from retargeting and site analytics are waiting for the months-long upgrade cycle to play out, but also for Apple’s machine learning-based ITP to make decisions about what will or won’t pass muster on Safari, said Dennis Buchheim, IAB senior VP and general manager of the Tech Lab.

The IAB Tech Lab is looking into how the algorithm will fill in some of the gray areas in Apple's guidance.

“The distinctions for read and read-write cookie rights, for instance, [are] crucial to whether media companies will be able to incorporate outside data into cookie-based advertising and drive the value of that inventory,” Buchheim said. “There are a lot of things we won’t know until we see them happen in the wild.”

The IAB is pressing members to work on cooperative cookie IDs, which could help the ecosystem bridge the 24-hour gap in access to first-party data by creating the kind of scale Google or Facebook already own, Buchheim said.

“And any business without a first-party interaction with consumers needs to figure out how to engage with those who do.”

 

 

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