Mozilla jolted the digital media industry recently by announcing that Firefox 22 will ship with the default set to not accept third-party cookies. This has major ramifications for everyone in the industry, including advertisers, agencies and publishers.
It seems as if there are three possible outcomes to Mozilla’a move:
Mozilla Becomes Irrelevant
Users browsing with Firefox will become worthless to advertisers and publishers, who won’t be able to serve informed content or advertisements when a user is browsing with Firefox.
As a result, advertisers will stop showing ads to Firefox users simply because those users don’t perform as well as others. Media targeted to Firefox users will underperform drastically, since audience targeting and attribution modeling will no longer work, and publishers will find themselves with a lot of inventory that they cannot clear due to no one bidding on Firefox users. As a result, they’ll stop allowing access to Firefox users, and users will find that their favorite ad-supported sites are no longer accessible through Firefox. Consequently, users will start using IE or Chrome in Firefox’s stead.
Small Ad Tech Players Struggle
In this scenario, only big publishers that also have in-house ad serving and data management capabilities will continue to show ads to Firefox users. Folks like Facebook, Google, Yahoo, and Microsoft will have the ability to drop first-party cookies by switching the ad-serving domain to their top level domain. Media buyers will need to completely fragment their plans, because each major publisher will have a completely siloed approach, in which data, creative, and attribution cannot be used outside of their own property.
Advertisers lose twofold in this situation because not only will campaign performance decrease as a result of fewer insights, but the marketplace becomes less competitive since there will only be four properties to buy media from (for Firefox). CPMs will rise for those four, while dropping significantly for everyone else.
Publishers Allow Third-Party Cookies At The Expense of User Experience
Publishers will realize the significant loss of revenue that comes with not being able to show relevant ads to Firefox users and will work with ad-serving companies to make sure that they can identify the user’s computer. If brand-new users visit a publisher, the publisher will redirect them to a host of ad-serving domains before finally coming back to the homepage, to ensure that relevant and appropriate ads can be shown to users while on the site. This chain of redirects will likely slow down the initial load of the site, but will mean content and advertising that better fits users’ interests.
Hopefully Mozilla will decide to open a dialogue with the industry, and none of the above comes to fruition.