Mobile advertising moves toward a post-cookie world

By James Robinson , written on January 27, 2014

From The News Desk

At the start of October 2013 new ComScore data confirmed a shift that we all knew was coming – we’re spending more time with online retailers on mobile and tablet devices than we are on desktops and laptops.

The continued rise of the mobile device as a sales platform could spell the beginning of the end for the humble cookie – the classic practice of creepily affixing a piece of data to a user’s browser to track their movements – according to a new retargeting best practices study released last week by New York-based mobile retargeting agency myThings.

On desktop, cookies allow companies to look at our browsing history and decide which adds to pitch at us. But this becomes harder on mobile. Safari on iOS disables third-party cookies. The webview technology that mobile apps use doesn’t allow information to be shared between programs. Information gets stuck inside our individual programs.

Subsequently, we’re moving towards a post-cookie world where consumers will increasingly need to be targeted by device, time of day and week and location.

The cookie’s potential competitor, which myThings labeled a “probabilistic device recognition technique,” targets consumers by patterns of use, location and type of device rather than direct monitoring.

It is a logical if less catchy and delicious replacement.

Android platforms still allow third-party cookies, which allow advertisers to target consumers using traditional means. But the inadequacy of this technique for mobile is shown up through cookie-free Apple devices vastly outpacing Android phones as shopping tools. IBM’s research into online Black Friday sales in 2013 showed this dominance clearly. Mobile iOS users spent $22 more per order, accounting for five times the web volume and almost two and a half times the web traffic.

It’s a peculiar position of strength for Apple to be in with Android having over half of the US smartphone market, according to ComScore.

The reasons for this have only been wondered at so far, with some speculating that the iPhone’s higher retail price means its users have more disposable income.

Using educated guesswork to find the best consumers to see an ad on mobile - this so-called “probabilistic device recognition technique” - would be less accurate than a cookie that allows a company to bombard someone with ads for something that they’ve already physically looked at.

MyThings thinks that it can be done with 85 percent accuracy. Mobile users display distinct patterns of behavior. Thanks to goldmines like one-click purchasing the decision to buy things happens 13 times faster on mobile than on desktop. We’re turning to these devices in predictable moments, too. Mobile use and sales spike by 31 and 33 percent on weekends. Desktop and laptop use falls by 30 percent over the weekends, where mobile use holds relatively steady, according to company research.

This new calculation is more adaptable at finding a relevant audience. You can look at what day of the week it is, the time of day, what device someone is using and where they are.

For example, targeting relevant mobile users with an ad at nighttime but for a shorter amount of time than might be traditional, might be more effective than showing them an ad repeatedly for something they looked at a week ago.

It’s a shift in focus that is inevitable as mobile continues its surge. Online research company eMarketer predicts that 19 percent of all online sales in 2014 will be driven from mobile platforms, effectively doubling in significance inside two years.

MyThings’ analysis of its own campaigns showed that mobile retargeting already increases revenue by 18 percent and click through rates by 46 percent.

Still, cookies have some time. The desktop isn’t finished with yet and cookies still work with tablets. Mobile retargeting companies need to integrate directly with an app’s software developer kit, which is labor intensive, myThings says.

But as cookies become irrelevant to a growing and more lucrative part of the online sales world, it’s the slow beginning of the end for one of the creepier ways to make money on the Web.