I am aware of the fights, and cookie churn is a symptom of the a challenging and, to my way of thinking, a not very good way of identifying origination.
Lets say I'm content provider A, I get your ad and it has an encrypted URL that lands back on my site. When it lands on my site I can decrypt it and know who sent that click to me and note it. Then, on conversion, pay that person.
The challenge this system has is that it doesn't let you throw your ads into a distribution bucket and wait for them to land on some site that is buying some traffic from some traffic provider. You have to know the sites (and presumably their IP addresses) where it lands. I need a relationship between the site showing the ad, and me. Then I can be sure that anyone who clicks on that ad, and then buys something from me, I can credit the sale to that site.
What is useful (and to some extent different) about this scheme is that you can compute ad spend against revenue generated. There is no 'fraud' because you don't pay unless someone "converts" (the term for making transaction). What it does do however is cut off all the shady ad networks and packagers and skimlinkers and what not because they don't add value for a large brand like Macy's or Target or Amazon.
So a blog like TechCrunch with a relationship with Target can give target an exact number of how much business has arrived at Target because of their ad on Techcrunch stories. And Target can compute exactly how much revenue the clicks that landed there from TechCrunch generated. And from their existing understanding of life time value of a customer who has landed on their site and made a purchase, they can price the value of that advertisement fairly precisely. TechCrunch gets feedback on how much their ads are worth to Target and can choose to make every ad a target ad if they think it will maximize revenue, base on the performance not on the click through rate. Target could lie about conversions, but that would be self defeating in the long term (they want people to land on their site and want people to carry their advertising).
If we learned anything from the meteoric rise of Google as an advertising behemoth it is that people will pay for metrics and demonstrable results. If you can provide the best metrics and the best results, you win.
Your encrypted URL scheme solves nothing as far as I can see. We can already track eg the retargeting provider that brought cookie X in. That's not the problem. The problem is
(1) multiple retargeting providers repeatedly bring user X in
(2) once user X clears his or her cookie and becomes user Y, we no longer have a way to target ads to him or her. If he or she then revisits the site, our analytics become confused and that user is entered anew into a retargeting pool.
(3) user X is exposed to ads from multiple ad partners. Who owns the conversion? Fractional share / time decay / last view through? We can track the partners that showed this user an ad (up to cookie churn), but somehow must apportion the credit.
Users regularly repeatedly visit a site and are exposed to multiple ads before converting -- that's a big part of the debate over who gets credit.
The above problems become more acute as you exhaust retargeting and move to lookalikes or other forms of prospecting.
I happen to think trying to cookie someone is going to ultimately be unsuccessful, and as you point out multiple people feel they have a claim on the conversion. My guess is that will simplfy, kick out everyone in the middle except the content site and the advertiser. I can be totally wrong here, but that is my best guess at what will happen.
ok, but in a cookieless world, how do I identify people to target?
The current flow is this:
advertiser pushes 1-party data into an exchange or ad network, either directly or via a dsp or dedicated company ala liveramp or via retargeting partner. This can be as simple as "target this user" or very complex, eg catalog integrations ala tellapart.
With no cookie, how can an exchange or network know that anyone wants to show an ad to this viewer?
The other possibility is a single company sees all / has global ident ala fb and google on mobile.
Also, you keep coming back to multiple parties having a claim on a conversion. That is fundamentally unrelated to cookies. It's this: multiple parties showed an ad to a user. Forget, for now, how that user was identified. If that user then converts, which partners get how much credit?
Publication demographics, backed up by readership surveys. (I know pretty old school but it passes muster even in Germany for privacy protection) Places like TechCrunch survey their readership and identify demographic characteristics that you might want to target. (age, sex, buying habits)
> With no cookie, how can an exchange or network
> know that anyone wants to show an ad to this viewer?
Because they have already made the decision based on the readership, if the publication keeps identity information and demographic information it can share it with the advertisers. Their is no "risk" of showing it because they only pay on conversion, there is only the publication wanting to get better at showing the correct ads.
How that would work in practice, if you have a login with a publication they can share demographics about that login when they ask to get an ad[1], if not they can share general demographics.
> multiple parties showed an ad to a user. Forget,
> for now, how that user was identified. If that
> user then converts, which partners get how much
> credit?
The partner who got brought the customer gets 100% of the credit, everyone else gets 0. For generic items statistics will have that conversion happening randomly amongst all the possible places it is shown. For non-generic items the partner that got the reader to the point of doing the conversion "wins" that particular round.
As you have surmised it does not support the notion of building an ad network through the use of cookie analytics. However I suspect such tracking/monitoring networks are going to be put out of business by a combination of privacy laws and browser changes. They are already considered "bad" by many consumers and transitively by those consumer's representatives in government.
I completely disagree about the death of the cookie. First, most users just don't care much. Second, killing 3rd party cookies is a huge gift to the handful of companies with, eg, single sign on so cross site visibility: fb and google. This was the problem with firefox's proposed ban on 3rd party cookies: I can't think of a bigger gift to give to google and fb. Now you may still support that under the theory that a few companies are easier to regulate than many, but I'm not sure that's a compelling case to regulators. I think the most likely outcome is we get european style cookie regulation, and the majority of sites put a click-dismissed banner on the top saying if you keep reading we get to cookie you. Oh, and if you do just use technical measures to kill 3rd party cookies, google et al can evade that by having pubs cname them into the first party then doing standard cookie stitching.
Disorganized thoughts:
Your ad solution sounds to me like a trip back to advertising 10 years ago -- lots of brand ads / dems targeting. Surveys are pretty crappy; high income dems tend not to respond; people lie; most publishers don't collect regdata; etc. Obviously a handful of pubs -- those used as proxies for rich demographics -- would love this (nyt, ios review sites, bmw/mercedes fan clubs) but for most pubs it would be a loss.
Even with lots of direct response ads there is too much inventory continually driving ad rates down; I don't see how removing a bunch of demand would improve anything from most pubs' perspectives.
Publishers uploading regdata also brings its own privacy problems.
Lets say I'm content provider A, I get your ad and it has an encrypted URL that lands back on my site. When it lands on my site I can decrypt it and know who sent that click to me and note it. Then, on conversion, pay that person.
The challenge this system has is that it doesn't let you throw your ads into a distribution bucket and wait for them to land on some site that is buying some traffic from some traffic provider. You have to know the sites (and presumably their IP addresses) where it lands. I need a relationship between the site showing the ad, and me. Then I can be sure that anyone who clicks on that ad, and then buys something from me, I can credit the sale to that site.
What is useful (and to some extent different) about this scheme is that you can compute ad spend against revenue generated. There is no 'fraud' because you don't pay unless someone "converts" (the term for making transaction). What it does do however is cut off all the shady ad networks and packagers and skimlinkers and what not because they don't add value for a large brand like Macy's or Target or Amazon.
So a blog like TechCrunch with a relationship with Target can give target an exact number of how much business has arrived at Target because of their ad on Techcrunch stories. And Target can compute exactly how much revenue the clicks that landed there from TechCrunch generated. And from their existing understanding of life time value of a customer who has landed on their site and made a purchase, they can price the value of that advertisement fairly precisely. TechCrunch gets feedback on how much their ads are worth to Target and can choose to make every ad a target ad if they think it will maximize revenue, base on the performance not on the click through rate. Target could lie about conversions, but that would be self defeating in the long term (they want people to land on their site and want people to carry their advertising).
If we learned anything from the meteoric rise of Google as an advertising behemoth it is that people will pay for metrics and demonstrable results. If you can provide the best metrics and the best results, you win.