Commentary

What Does Firefox Update Mean For RTB?

by March 12, 2013

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.

rtb

7 comments about "What Does Firefox Update Mean For RTB?".

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Russell Cross from Prentke Romich, March 12, 2013 at 2:18 p.m.
There is a fourth option based on your comment that, "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." User who are tired of endless uninformed and useless ads will flock to Mozilla in order to avoid this. You assume - naturally - that people WANT ads and will somehow miss them, when I suspect there are many who would be happy to search for product on their own terms. I speak as someone who used the internet last April to research a new Ford Fiesta, and having bought it continued to be bombarded with ads for Fords and other cars for 8 months after I'd bought it! And I remember the day when Google was new and it had just a search box and a button. Happy days.
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Andrew Boer from MovableMedia, March 12, 2013 at 2:34 p.m.

Interesting piece. I haven't been in the ad world for a while so I may not be up to date. But here is my take:

I don't think Option Three is realistic, nor do I really understand how that would really work--I mean I guess I do, but it feels like quite a workaround.

Option two doesn't sound all that bad to me as a consumer. Ads go back to being relevant to the content/domain instead of the user. Retargeting becomes less prevalent, which while effective, seems to annoy people (Annoys me, anyway). CPM's go up, which leads to better content quality. Google and a few others get to own the data and become the trusted market makers. Maybe its not fair to the little guys, but at least the whole world doesn't get to see my data.

Option one: I don't know. If there is consumer demand for a private browser (and I think there definitely is, at the very minimum for more, ahem, prurient interests) well then Firefox will not be irrelevant, at least not due to this decision. We didn't see publishers block Chrome when it introduced Incognito mode, so I doubt they would block Firefox. A lot of publishers might really welcome this change.

JoAnn DeSousa from ZEDO, March 13, 2013 at 2:05 a.m.

@Russell,

I think the first point is trying to convey that publishers will have to stop catering to users still browsing with Firefox, rather than saying that users will not be interested in using Firefox because it does not have relevant ads. The whole purpose of ads is to provide a substantial income to all parties involved. There are a number of smaller publishers who rely entirely upon the money they make from advertising to keep their site going.

In these cases, I believe that since the user can no longer see relevant ads on Firefox, their engagement will be lesser thus leading to poorer performance of ads. Advertisers are then expected to put in little to no money for such users and thus, publishers stop enhancing their sites to include a smooth user-experience for those browsing with Firefox.

So the assumption is not that people WANT ads and will miss them. Instead, it is that publishers NEED high-performing ads which they will no longer be able to get from Firefox users.

Steve MC from GRUNI , March 14, 2013 at 11:29 p.m.

Wow! Its funny how all the ad people are so full of crap. I fully agree with, and was about to suggest Russel's fourth option. OBA is a joke and provides little to no value to web users. Now if only the FCC wasn't so heavily influenced by Google and FB and all the other vampires that suck the blood out of the common man/ woman.

Mark Smith from Sevencamp, March 19, 2013 at 12:31 p.m.

+1 for Russel

Mark Smith from Sevencamp, March 19, 2013 at 12:33 p.m.

Adding to that thought ... there is a reason we own DVR's!

Robert Brazys from DataXu, May 20, 2013 at 11:07 a.m.

@Russel, the reason you were bombarded for 8 months after you converted on the Fiesta was that, due to your heavy research, you were listed as an 'intender' w/data companies and to continually try to reach NEW consumers, Ford/TDI purchased you again and again, unknowingly. NONE of those data companies have access to PII or data about your purchase, therefore, the 'evil' ad companies - have no ability to anti-target you. This is a solution that is coming though, and the death of the third party cookie will usher in that new solution so we can target more intelligently across all formats (TV/Desktop/Console/Handheld/Tablet/etc)