The Bad Kind of Cookies: Apple’s Intelligent Tracking Prevention and its Effect on Advertisers

September 22, 2017

Personally, while I love cookies, I would usually not accept food from a stranger; when it comes to online cookies, which are essentially trackers, I would never willingly accept one. It seems as if others agree with me, as somewhere in between 30 and 50 percent of internet users delete their cookies monthly and in the face of consumer demand to roll back the usage of cookies, Apple has answered the call.
In June, 2017, Apple announced a new feature on its web browser, Safari, called “Intelligent Tracking Prevention,” (“ITP”) which would allow cookies from third-party sources to only connect with a users’ browser for 24 hours from the time they last interacted with that source. After that window is over, the browser will retain the cookies, but “partitions” them so they cannot be used other than for a user to log-in. If a user does not interact with a website that utilizes the same cookie within 30 days after its last interaction, Safari will automatically delete the cookie from the system. To get an idea of the impact this can have, cookies have the potential to permanently stay with a users’ device and thereafter track all of a users’ movement. Websites can use cookies to track what users respond to and then will share the information with businesses and advertisers.
For a quick study on specific cookie usage, there is perhaps no company more prevalent in the business than Google. Google makes up over half of the digital advertising market, generating $79 billion from ads in 2016 alone. In 2015, 90% of Google’s revenue came from advertisements. Instrumental in maintaining their dominance over this income source is Google’s utilization of tracking cookies, which follow and record user activity once they leave Google for third-party websites. If the user is logged into an account with Google (YouTube, G-Mail, etc.), Google adds this information, along with lots of other data, from all of a person’s devices to a user profile, whether it’s a cell-phone or desktop computer. Google then uses this information by targeting advertisements towards consumers and charges advertisers for each click their ad receives. The majority of Google’s profit comes from ads they display on their own search page, but 20% of profits come from ads displayed on third-party websites Google has partnered with.
ITP is significant because Safari accounts for nearly 15% of browser usage worldwide and approximately 46.6% of mobile browser usage in North America. By limiting the cookies to such a short timeframe, Apple is threatening to interfere with the ability of advertisers overall to see whether their ads have worked in the long run.
Huge companies like Facebook and Google that receive daily, if not hourly visits, from each user will not be affected. Instead, most likely to see the brunt of the new program are smaller websites relying on advertisement revenue that do not receive much traffic. It has even been said that “Apple is using its considerable marketplace power to help pick winners and losers in digital media.” As a result of ITP, six major advertising trade associations alleged that “[t]he infrastructure of the modern Internet depends on consistent and generally applicable standards for cookies,” that Apple was breaking those standards and as a result, and would therefore hurt the consumer and brand relationship. Apple responded,

“Put simply, machine-driven cookie choices do not represent user choice; they represent browser-manufacturer choice,”

affirming that they would continue to oppose any actions by companies that distort the digital advertising ecosystem. Apple also assured users and companies alike that advertisements from websites which users intentionally interact with will function without problem.
ITP could provide several benefits for Apple. First, ITP will not interfere with advertisements associated with applications installed on Apple’s devices, which will increase the significance of advertisements which businesses pay Apple to display. Second, Apple gains a public relations boost by going out of its way to protect user privacy, whenever it seems like other companies are focused on exploiting user information. Third, it could improve the relationships between Apple and internet moguls like Facebook and Google, as Apple could have easily been much more stringent on the timeline for ITP’s cookie limitation.
As for how ITP will change the user experience, ITP may threaten to stop targeted advertising in products in which users are legitimately interested. However, as a benefit, ITP should stop some third-party tracking, enabling user browsers to speed up.
As for other browser companies, will they follow the path of Apple and protect consumer privacy, or target campaigns at making as much money as quickly as they can?