Death of the Cookie

Key Notable Stats

The Death of the Cookie: How Changing Data Privacy and Tracking Regulations Impact Digital Marketing and Online Advertising Strategies. Stay Informed on the Future of Customer Data.
The Death of the Cookie: How Changing Data Privacy and Tracking Regulations Impact Digital Marketing and Online Advertising Strategies. Stay Informed on the Future of Customer Data.

Birth of the Cookie

The founding of the cookie can be traced back to 1994 to Netscape Communications, one of the very first internet browsers. Lou Montulli, a web-browser programmer at the company, came up with the idea of using text files to store information. This file would be able to store purchases on the user’s local computer, solving the problem of reliably implementing a virtual shopping cart. The concept of the cookie was not malicious. Lou simply wanted to be able to check whether visitors to the Netscape website were returning users (more here).

For almost thirty years, the cookie was the leading technology responsible for successful advertising targeting. It provided the perfect technology for millions of brands to get their name/concept in the eyes of billions of consumers. However, the past ten years, the topic of privacy has become more and more pervasive. So much so, that some might argue that the pendulum of internet interest has swung all the way in the opposite direction allowing the rise of anonymity and decentralization to thrive.

Death of the Cookie

The global conversation around the topic shifted following the Facebook/Cambridge Analytica scandal in 2018. The incident altered the public’s view of major technology companies from great innovators and drivers of the economy to entities that need more oversight. Massive regulatory efforts like the General Data Protection Regulation in Europe and the California Consumer Privacy Act have since gone into effect, with more on the way, representing a break in consumers’ trust in tech companies to sufficiently safeguard people’s data.

And so, in January 2020, Google announced that Chrome would phase out support for third-party cookies in the browser, starting with trials on conversion measurement and personalization by the end of 2020. However, in June 2021, after considerable industry pushback and a debate about what would replace them, Google announced a two-year delay for the third-party cookie phase out to end of 2024 alongside an introduction of the “privacy sandbox”.

We’ve Reached an Inflection Point

If you have step back and look at the crime scene, you’ll see a whole generation cheering alongside the murder. It doesn’t seem, to us, like any coincidence that blockchain, synonymous with concepts such as anonymity and data privacy, saw such a rise in societal interest in 2021 and 2022. Now more than ever, sensitivities are heightened toward data ownership and “big tech’s” responsibility for keeping consumer data safe.

What This Means for Brands

The death of the third party cookie is an inflection point which calls marketers to search else where for solutions. This is happening in parallel to general sentiment around paid advertising channels rapidly deteriorates.

  • Meta’s CPM has increased 61% year over year
  • Google’s programmatic display CPM has increased 75% year over year
  • Instagram’s CPM has increased 23% year over year

While advertising is not going anywhere, channels are changing. And data/audience modeling is changing. This change in cookies, just like the iOS changes of 2021, will result in drastically worse results for brands.

Brands are in a panic-ed search for new platforms and new solutions.

How we think about it

The blockchain is, simply put, a permanent, secure database.  Blockchain technology will be the scaffolding for the entirety of the internet in ten years. Whether my mom in Kentucky likes it or not, its the truth.

When someone asks us, “Does Toki need to be on the blockchain?”

Our answer is, “Why would you not want to be building for the future?”

In the future, not everything will be on-chain. There won’t be one chain to rule them all. But all data will be cross-chain and accessible when you want it.

Not because it has to be, but because it is how we as a society desire our internet to evolve- we no longer want to be renters, we want to be owners. The philosophies behind blockchain are as pertinent as the technological innovation.

Assuming, blockchain is the scaffolding, it begs to ask what are the building bocks that it supports. Our belief is that with the death of the cookie there is an open opportunity for new innovation and applications that support consumer engagement, measurement and tracking.

We are not a loyalty platform, we are an engagement measurement platform.

We are not recreating the cookie and we aren’t innovating on the pixel. Not today at least, maybe later. Our focus is on giving brands and consumer control over what activities are tracked and giving them the platform to illicit cross pollination.

Token Issuance as Digital Stamp

Toki allows brands to rewards their customers for the tiniest of onsite activities - spending time on site, liking an Instagram post, reading a blog post. These micro activities as trackable consumer activity. Each activity is viewed as a measure of loyalty or brand buy-in. Each brand has a spectrum of relative brand interest- each customer falls somewhere on the spectrum whether they have been to this brands’ website for the first time or they have an LTV of thousands of dollars. It is all a spectrum. Even in the physical realm, Toki integrates to allow rewarding for attending an event, stepping into a store, wearing your new shoes to unique location.

All behaviors can be tracked, incentivized and rewarded. Each token issued is a digital receipt to add to your digital scrapbook to record something you’ve done, something acquired or something you’ve experienced.

We do not know any competitors who are doing token issuance based on automated behaviors. This is a very hard nut to crack. This is our moat, for now.

Wallet as Digital Passport

Each token issued on these micro activities in a measurement of brand engagement. However, issuance is nothing without a container to hold it in. And without owning the container, it is damn near impossible to do any data modeling to understand the consumer and what they are going to do next.

Trust me. We tried.

That’s why we built the Toki wallet. We go deeper on the why behind the Toki wallet in other pieces of written work. Owning the digital passport also allows us to break into a highly critical value prop for next wave audience modeling.. alliances via networks.

We believe one of the main reasons that loyalty 2.0 didn’t work, is because 99% of brands don’t have strong enough brand equity to stand up their own program. But you put three brands each with a brand equity score of 45% together and you’ve got something powerful!

More on this in Loyalty is Dead (to be published at a later date). But in summary, brands who use Toki for white-label loyalty have the ability to opt in to the Toki network. In the network, you have access to see how your consumers engage with all brands in the Toki network. Now, the Toki wallet becomes a central location for consumer data based on shopping activity (pre and post conversion).

The wallet does not need to be downloaded, it can be found on any website that uses Toki. It is injected in the code of the site and shows consumers exactly how engaged they are with all the brands they love.

Data Ownership

With this framework, there is a lot more potential opportunity for a happier data privacy future. We will throw out a few different scenarios…

  1. Toki has a public blockchain, so all spending and consumer data is readily available to the masses. We launch a block explorer as well so it is easy for the retail user to engage with.
  2. Toki has a private blockchain. We give consumers the ability to toggle on and off who see’s what consumer data at any given time. They get rewarded for sharing more data.
  3. Toki becomes omni-chain, launching a block explorer for all cross-chain activity co-orelated to Toki.

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