How the death of cookies might affect us all. Radically.
In December, the EU put their foot down and published The Digital Services Act and the Digital Markets Act. It has mainly attracted attention from an inner circle, but this is likely to change the internet experience for all of us. To the big Big Tech companies, it can basically mean a complete change in their business model. It limits their power and gives more players access to their data.
The initiative consists of two parts; The Digital Services Act (DAS) and the Digital Markets Act (DMA). Slightly simplified, the Digital Services Act sets rules for how to handle illegal and harmful content on the internet. It requires that all digital services, such as social media, digital marketplaces, and platforms (think GAFAM; Google, Apple, Facebook, Amazon, Microsoft, and more), must show how to do it in reality. They want to protect our democracy and make the platforms responsible for the decisions they make by transparently showing how their algorithms work.
Reduce dominance from the big ones
The Digital Markets Act will provide a better balance, as it will break up the dominance of the large platforms (type GAFAM), and smaller players can act on equal terms. As a dominant market player, you must report how you show results and be able to prove that you do not give favors to your own business.
This changes all modern marketing
In principle, all marketing activities on the web depend on so-called cookies that we have in our computers/phones/tablets – so-called programmatic advertising. Cookies contain information that helps advertisers reach their target audience based on our habits and behaviors. The big platforms profit from selling information about you to their advertisers as efficiently as possible. That is why DAS and DMA are a package. By using algorithms to create meeting places for groups with similar views, it becomes easier and more efficient for advertisers to reach them, and the platforms can make big money. Unfortunately, this means that it is also possible to make money on more dubious groups. Bubbles are formed that confirm the individual’s reality and reinforce movements that might not otherwise have existed, which risks eroding democracy.
“It’s all a bit like The Truman Show – that film where Jim Carrey lives in a world that he thinks is real, but which is really just a TV show. The world that we see through these platforms seems so real that it can be hard to remember that it’s actually constructed, built up through the choices that algorithms make about what we should see”,
Margrethe Vestager, Speech “Algorithms and democracy“, Chair Europe Fit for the Digital Age, and Commissioner for Competition.
The other way the industry works is with retargeting cookies. When you visit an advertiser, a cookie is placed on your computer, and then you can get advertising for that product wherever you surf. We have probably all googled something like a shoe we like, bought it, and then got advertising for the same shoe for three months afterward. (For those who wonder, it will also mean that measuring pixels will disappear, which will impact, for example, Facebook. )
What can the advertising industry do?
The answer is; probably nothing. The last 20 years of marketing have been about cookie-based advertising. It is an efficient tool that is easy to measure and, therefore basically, taken over how we communicate. That gold rush is likely to be over soon, although it will take a few years.
It means the advertising industry will have to rely more on competence to build strong brands again. You have to understand your target group in-depth; you can not rely on robots that buy data. How does the target group behave, and where can I reach it? Then you have to be relevant, entertaining, surprising, inviting… yes, creative, to earn the favor of the target group.
This is the EU – does it affect North America?
The EU has already implemented some significant changes, such as the GDPR and P2B regulation, which already have affected the rest of the world. This is a natural progression. Major global players do not want to risk getting into trouble, and it is expensive to work with varying standards in different parts of the world. I believe that many will adapt their communication to EU requirements, and at the same time, the requirements will affect politicians and decision-makers across the globe. Like the US Think-tank Brookings some are more hesitant and see things that need to be clarified first. But suppose you succeed in strengthening personal integrity without losing the charm of the web – that you can find everything in one place – and give smaller players access to the big platforms’ AI data. In that case, there will be a fairer competition and hopefully more thriving businesses.
That’s what I see coming. What do you think?
Interesting links if you want to know more:
Margrethe Vestager on Twitter: https://twitter.com/vestager/status/1322145918238556160
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