advertising · technology

“Data leakage”: What happens when ad-tech companies get ahold of a publisher’s user information through cookies?

 
What is “data leakage”?  It’s when advertising technology companies, using tracking cookies placed on the computers of an unsuspecting user, assemble a profile of the user.  Once they’ve done so, they can sell advertising to brands and “find” those users at all kinds of websites, rather than on the website where they started.

The most important strategic idea here is this:  Publishers are leaking data about their users out into the general programmatic ad ecosystem. They are doing it by allowing the placement of dozens of third-party cookies via their web sites.  As a result, their audiences become addressable in many other ways besides through their services.

It’s like handing out your subscriber list to anyone who wants it — for free and with no terms of use whatever.

The Information Trust Exchange insight is to explain to quality publishers that they actually need to ENCOURAGE people to install surveillance-protection tools on their devices to stop third-party ad tracking so that they (the publisher) can begin to re-block access to their customers except through them using first-party cookies and/or ITE’s shared-user management platform.

On May 9,  2016, Walter Mossberg and Kara Swisher, the co-editors of the respected ReCode technology news service, shared in a post a story about this phenomenon as the spoke about the challenges of getting their business going:

 

WALTER MOSSBERG: One of the things we discovered is it’s very hard to be small but it’s very hard to get big. And part of it is if you’re dependent on advertising, which almost everybody is, they change the rules of the game constantly. We had our company, Recode, and our new website for exactly one week and we were at a dinner at CES with some very important advertising folks…

KARA SWISHER: ’Cause we’re good at that, kissing up to advertisers.

MOSSBERG: Well, and NBC, which was one of our investors, had a dinner and we each stood up and said a few words. But we were seated next to the head of this advertising company, who said to me something like, “Well, I really always liked AllThingsD and in your first week I think Recode’s produced some really interesting stuff.” And I said, “Great, so you’re going to advertise there, right? Or place ads there.” And he said, “Well, let me just tell you the truth. We’re going to place ads there for a little bit, we’re going to drop cookies, we’re going to figure out who your readers are, we’re going to find out what other websites they go to that are way cheaper than your website and then we’re gonna pull our ads from your website and move them there.”

SWISHER: Yeah.

MOSSBERG: And I was like —

SWISHER: “Uh oh.”

MOSSBERG: “Really?!” And he’s like, “Really.” So, I mean, that’s just a small example of how it’s just very hard to do quality journalism, which is expensive.

Ad-tech expert and Mozilla consultant Don Marti comments here:
 . . . [I]f a chain restaurant wants to advertise to people in your town, today they have a choice: support local content, or pay intermediaries who follow local users to low-value sites. When the users get protected from tracking, opportunities to reach them by tracking tend to go away, and market power returns to the local news site.
The solution, fortunately for tech journalists like Walt Mossberg, is something that they’re good at. Explain to users how they’re being tracked, and how they can use tools like Privacy Badger and Disconnect to prevent ads from “following them around.”  Installing a privacy tool is a small step for a user, but a bit win for the advertising-supported sites that the user visits.

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