The Cookie Crumbles

Hey there listeners, welcome to the Blind Data podcast. I'm Kelly Nyland, your host, founder and CEO of Whym. And today I'm joined by Ryan Hornberger, VP of Engineering. And we are here to discuss the current landscape of web browsers, specifically as it relates to changes on how our data is collected and around cookies. So welcome Ryan.

Hey, thanks for having me. Nice to talk to you.

So for about 15 years, I've led go-to-market teams, which has included sort of this purview over digital advertising, e-commerce, and performance marketing. Ryan, I know that you've also spent a lot of time in e-commerce and advertising. Would you give our listeners just a quick background on your experience in the space?

Sure, yeah, I've been in this space in some form or another for about 17 years now. Started off my career in e-commerce, actually doing some engineering for a company called Stores Online. And that's really where I got my kick off. I've been in some sort of e-commerce related or commerce related startup ever since. Sometimes commerce adjacent like advertising at Snapchat, for instance, where I did help them build their massive snaps or their advertising platform and some of their creative.

components for advertising and for sharing and others That's where I met Kelly met you by the way for the listeners if you can't see us She's a beautiful very smart person you're meeting here on the screen right now Come watch the video if you want to come see Anyway, the snapchats already met They might be a number of different startups all related to this space web technology advertising who commerce and yeah

And I'm curious, Ryan, we've never talked about this before, but did you have anything to do with like implementation of like pixel code and things like that? Things that would be the trackers for cookies for the advertising platform that you built at Snapchat.

Oh, definitely. Yeah. So I personally built Snapchat's in-app web browser, myself and my team. And then the pixel tracking code, when we were building the advertising stack, I didn't personally engineer it, but me and my team consulted on how to engineer it with the team that wrote it as Snapchat.

That's pretty awesome. We're gonna be talking a lot about browsers. So I think that's super interesting, right? That you've actually built a browser yourself. That also includes like, you know, how to collect data, whether it's like for searching or for content consumption. And so that'll really, I think we'll touch on that, you know, over the next four episodes. So thank you for sharing your background. So the reason that you're here today is that there's been some...

Great.

very, very recent changes as it pertains to the two most powerful browsers out there, Safari and Chrome. Specifically, Google just recently announced in mid-May of this year, 2023, that they are finally ready to join the likes of Apple and Microsoft and Firefox and these other browsers. And essentially this, like, I would say very controversial war.

to destroy the third party cookie in the name of privacy. So that's what we're gonna be talking about. That's why we're here. And as you have said, you know, to me, Ryan, so many different times now within this like last two quarters, the foundational DNA of the internet is changing and our online experiences are never going to be the same. And that's everything from how we shop as consumers or end users using the internet to advertisers.

which we're going to talk about. And then, kind of in the middle of all that are big brands and retailers, and then smaller direct-to-consumer brands or brands that are trying to build their businesses. And so, these changes really touch everyone and that's why we're here to talk about this and kind of dive in a little bit to how we got where we are today with this new Google announcement. So really exciting. And so here we go.

So what we're gonna talk about first is like, I'd love to just hear from you from more of a technical perspective. You know, what is a cookie? What is a third party cookie? And what is a first party cookie? So could you help us just for our listeners understand to set some groundwork here? You know, what are we really talking about? And if you could explain it to me like a five-year-old, that would be really, really great.

Sure, yeah. And the invention of the internet happened, it was just a way for you to put a URL into a toolbar and get back a document from somebody else all the way across the world or across the campus probably originally, right? Just a way to share documents. At some point, I think an engineer at Netscape said, hey, wouldn't it be nice if the document knew a little bit about you and could give you different feedback depending on who you are?

Mm-hmm.

then at Netscape they invented this thing called the cookie, which is a way for the browser to store a piece of information on behalf of the website that can then be used later to re-identify you and to then provide you a unique experience. This is what powers login, this is what powers checkout, this is what powers credit card storage, a number of other things. Really the most important thing that happens in a cookie is it's just an identifier of you. In that process...

They didn't just make it possible for the website you're talking to make a cookie on your site. But if that website is using third party tools, external tools that they don't make themselves, those tools could also set cookies on you that also let them identify you. And so cookies as a whole constitutes any piece of information that any tool puts into your browser to remember who you are as you move around the internet.

Thanks, Ryan. Thanks for giving us that background. You know, I think there's an amazing episode on Planet Money that really kind of dives into the history of this engineer. His name's Lou. And he comes up essentially with this idea, you know, for the cookie, and then it quickly becomes controversial. And at the time, Netscape was the most, I would say, you know, it was a startup. It was becoming kind of one of the bigger browsers and they were competing very heavily with Microsoft.

And I think what was exciting initially about the cookie, and by the way, the cookie is almost 30 years old now. So this is 1994, almost in 2024. So this technology has been around for a long time. And at the time, it was like this thing called the internet, right, was just coming, you know, just coming to, I would say the masses. And the exciting thing around the cookie was that it was, it helped the internet take off, so to speak.

It gave us the ability, I would say most importantly, to make money online. The commercialization and money, we all know that things follow money. And so the ability to make money by identifying users, keeping them logged in, powering secure and private commerce, that was what was most exciting about the cookie. And its promise was to create a more personalized experience for you online. But as we sort of fast forward to today and we look at some of the more...

recent changes that have happened just in the last 10 years. Around 2013, there was a huge breach. There was a bunch of breaches with Target and banks and eBay. And so all these advertisers started saying, OK, we have to figure out what steps we need to take in order to protect users and their privacy. And that's where we see in 2015, Apple starting to make changes

as it pertains to their app tracking, right? And then as we kind of get even closer to now, this time, just within the past couple of years, they've implemented more strict policies around their app tracking transparency, and specifically as it relates to giving users the visibility to what is being tracked about them.

Is there anything else that you have observed by reading a lot of the technical documentation around these changes, Ryan, that you want to share? Is it, you know, these impacts are made to like apps and the browsers?

Sure, before I answer that question, just to double down on some things you said, the cookie really was the core piece of technology that funded everything we love about the internet today. Just like what you just said, the big part about funding, like it did help with payments and checkout and buying things, but the majority of the internet that we enjoy historically was powered by advertising. And advertising...

Mm-hmm.

eventually figured out that, you know, you give the wrong ad to the wrong person, you're not very effective. But if you can identify that person and develop a sense of their interests and give them an ad that's relevant, then you're more likely to give them a better experience and give you a better experience. So cookies really powered advertising technology forever and ever and ever. And since the majority of websites on the internet, quantity wise, at least, were powered and funded by advertising, the cookie was the magic tool.

Mm-hmm.

that made that possible. Google Analytics, Facebook Pixel, all these Pixel platforms that are out there to monitor and then develop advertising strategy that was all powered by this feature. Now, back to your question about what has changed historically that's of interest. I think one more thing to bring up is that one of the biggest drivers for why we're having this privacy movement right now is government regulation. So,

One of the big pushing efforts that happened here was that the European union and followed by other countries and our States in the United States said, Hey, we think that the internet's not private enough. We need to make it more private. And their solution, their legislative solution was to make every website, put this little banner at the bottom of their page, it says, um, do you accept our cookies? And it's very annoying. It was like the most, one of the most ridiculous solutions to the problem you can imagine.

Yeah.

Ugh, it's so annoying.

And now everybody's internet experience is uniquely worse than ever was before, all because of legislation. My thinking about why, you know, Apple and Google and these companies, um, originally were inspired to start thinking about privacy more aggressively was because I think they got in their heads, Hey, if we let the legislators decide how this is going to go, it's not going to go the way we want it to go. And so we want to get ahead of this. We want to be, we want to look like we are solving it before the legislators feel like they even need to get involved.

Yeah.

Legislation has been very aggressively involved in driving this even today. Um, one of the big reasons I think Google is pushing harder today and saying, yes, we will be done by 2024 now is because they're the risk of legislation becoming a part of the problem is increasing by the day. And so if they can fault solve it and get this behind them, then that risk goes down. My hope is that as these solutions come out, we can get rid of that cookie banner down the road.

Yeah, because it's not really telling us anything, right? I mean, the annoying part is it's like, hey, you know, now it's just basically say, hey, we're tracking this data, right? I wish it was more visual. I wish they would actually tell me what they're learning about me so that I could participate in sort of adjusting those things that they know about me or think they know about me, right? It's one of my biggest frustrations around data collection is its visualization, its ability, like our ability to collaborate with it.

But the legislators won't need that. Exactly.

Right.

And right now it's still just, it's very like hit you over the head or sort of very tactical, like accept all, denial. And then I have a bunch of toggles in the middle that I don't understand what they are, right? And so it's just annoying. It's obnoxious. And the other thing about the government regulations, you know, it's funny, Ryan, because now we're seeing that from an AI perspective, right? And we're in the middle of a very similar dynamic where the government is going, we need to regulate this. And so there's probably going to be, you know,

Definitely, yeah.

Ha ha ha.

Definitely.

companies again, trying to control their own destiny, like very similar from a data perspective and like, okay, let's get ahead of this before, you know, the government who, I mean, the government is the last, you know, body that should be like saying what AI should do and how AI should do. But I think that's a whole other topic, but definitely something that we're kind of like, seeing again, right, as new technologies emerge and, you know, people are afraid of what they don't understand.

And so I think that's what we're seeing and definitely what we've seen about around data with privacy. So as we start to move into this, into our next part of our conversation, we're kind of setting this, you know, the stage for the status quo of the internet. So could you break down for us a little bit, and maybe you have a visual to share around like, how do...

prior to maybe 2023, how did these cookies operate on the internet so that we can understand what things are now actually changing and how those are gonna impact directly like our end user experiences? Could you share a little bit about that? Sounds great.

Definitely. So I'll do my absolute best to describe this in audio format for those that are just listening. For if you're watching the video, or if you wanna find this video later, we'll post in the links, I'm sure, where you can find it. But I'll share my screen here and discuss a slide. Let's see here, I'm gonna share this window. And we'll discuss what the past was and what the future looks like. I'm waiting for Riverside here to show it. Are you seeing it yet?

try again.

There we go. Okay. All right, so for those of you that are listening, what you're seeing on the screen is two sides of a card. On the left-hand side is the past, and the right-hand side is the future. On the left-hand side, we have three columns. First party in the far left, third party on the far right, and in the middle is this thing called third party masquerading as a first party. These are just different kinds of cookies that are put in the system. A first party cookie,

is any cookie that was given to you by the owner of the website that you're visiting. So if you're visiting, let's say target.com, these cookies come straight from Target and no one else. But usually companies like Target employ the services of third parties to help them run their business. An example might be Google Analytics. Google Analytics is helping them advertise to you. They need to know who you are so they can advertise to you elsewhere when you're not on their website.

And so they bring Google Analytics on. Google Analytics helps them measure traffic to their site, but it also builds profiles for them to do advertising. So Google Analytics falls in the third column of this left-hand side, whereas Target would fall in the first column of this left-hand side. And then down the center, this third-party masquerading as a first party will be tools that companies like Target might use that are made by third parties but look like first-party behaviors on the site. For instance, like a wishlist solution

a viewing history solution or some sort of solution that is interactive on the merchant site that you interact with, but it's not actually made by the merchant. Now usually Target and larger companies may not have a lot of these third-party mass-grading and first-party companies, but a lot of Shopify stores, for instance, will have third-party tools doing this. And each of those cookies appear differently to the browser. The browser can tell the difference from cookies that are set by any one of these platforms.

So now looking at the left-hand side of this card again, you'll see the server side, the first party cookie column, the target column. If you're on target.com, the cookies that come from target, they have no time limit right now to how long they will live on your computer. So the target can know who you are for as long as they want. They can personally set a time limit if they want, but these cookies can live forever. The one limitation of these cookies is that they only show up on target's domain.

Target can't see this cookie if you're visiting another website. Third-party cookies in the third column, the chart shows that these cookies currently also are unlimited. They don't time out. And they are also available on every website you visit on the internet if that website also installs Google Analytics or the third party's tool. And so this that means that Google Analytics can know who you are on Target.

And as you move to another website, they can know who you are again on that site and just follow you around everywhere you go. That's the current state of affairs. As we jump from today to what it will look like in 2014, or sorry, 2024, I'm sorry, the slide shows you what's changing. So what is changing is that nothing really changes for first parties. It's still an unlimited timeline for how long they can remember who you are, and it still only works on their domain.

For third party trackers like Google Analytics or other companies that are like that, they can no longer have an unlimited timeframe for their cookie to live on your computer and it's forced to only see you inside of the domain that you're on. So every time you leave a merchant site, the default behavior is that it deletes that information. So when you come back, Google Analytics no longer knows who you are and they have to start that session over.

while you're on the website during that single session you're on, they can track you during that session and develop a profile of you, but they can't link it to your previous sessions because they don't know what your ID was back then. And as you leave the site, the browser will delete that information so that when you come back, it's as if you've never been there before. That's focused primarily on third parties, but it also affects any third party who's trying to masquerade as a first party.

is already live inside of Safari browser. And there are versions of this live in the Microsoft Edge browser, in the Firefox browser and the Brave browser. And then Google is finally gonna be turning theirs on starting in early 2014, sorry, 2024 and closing it up hopefully at the end of 2024.

Great. So let's talk a little bit about the practical application of this. And thanks for sharing this, Ryan, you can share. So let's talk a little bit about status quo of where we are on the internet today. So can you just give us a quick breakdown? What is first party data and what is third party data?

Sure, yeah, so first party data is any data that you exchange with the primary website you're visiting or merchant. So if you're visiting target.com and you arrive there and you browse around and you leave and you really don't give them any information, they might not have a lot on you, especially in this world where third party cookies are gone. If you give them your email, if you give them their phone number, if you give them other information to identify you characteristically, or you log into their site,

They can set cookies on you that last forever, but are only visible to target.com. And those help them then know who you are.

got it. So just so quick question about that. Right. So if I went to Target for the last like two years prior to cookie changes, would they know about my browsing history for the last if I was on the same device and on the same browser, would they know what I had browsed for the past two years?

If they were recording it, definitely. So they should have the capacity, the cookie gives them the power to do it. The question is, were they listening? And that may or may not be true, depending on the merchant you're visiting. Most merchants outsource this kind of tracking to third parties, because it's not their specialty, right? Their job is to sell a product. They're not good at tracking. They'll usually outsource it, which is why most of this kind of tracking happens with third parties. And those third parties...

Okay.

Okay.

Got it.

are losing their ability to do this by default with cookies. So they're starting to have to get smart about how they're gonna track you from now on. And what it usually looks like is that Target is going to have to basically tell the third party this is who this person is very actively. So rather than letting this third party track you behind the scenes without Target having to be involved.

Now Target's actually going to send a signal to their tracking platform that says, Hey, this is Ryan or Hey, this is Kelly. Now, as you watch them, please understand who they are. And so Target will have first party data about you and we'll have to put in their term, their privacy policy in terms of service that you are, that they're planning on sharing at least a piece of that information with their, their partner relationship organizations so that they can do proper tracking and advertising.

Got it.

Got it. So I think I understand. So prior to these changes, if I was browsing around in Target, they would have all this information about the things that I was sort of interested in, right? And then as soon as I create a cart or a wish list, or I start favoring things or leaving things open in browser tabs, they have the ability to track that. And if you think about tracking millions and millions and millions of users, usually this has to be done server-side by Target and target.com, right? Which is why you're saying,

That's why they employ these other services to help them do that job, because it's actually kind of a, it's a heavy job to do, right? It's a lot of data to store, it's a lot of data to parse through, and then how do we use that data to create more personalized experiences for Kelly, right? So that's where these third parties get involved. And then I would notice, right, and like when I would shop on target.com, I would then like go to like a blog somewhere, and I would see that like,

you know, umbrella, you know, beach umbrella or something that I just looked for. And so that's an instance of, OK, now these third parties are collecting my data, not only from Target dot com and using that to retarget me on other sites, but now they're collecting what I do after I go to Target dot com. Right. Like maybe I go over to, you know, just a random Google search for like beach umbrellas, because they really didn't find the thing that I was looking for. Right. So they're

So those are the different parties involved. So first party is target.com and what they know about me. Third party is anyone that they're employing or partnering with to essentially track me across domains. And then how that data is getting used. Again, the ideal solution is to help me find or remember the products that I wanna buy if you like retargeting. But that's not necessarily the experience that we've all had, right?

Is there anything else that you would say about first party and third party? And then these kind of in-betweens, which is like, you know, uh, I think you say it first party masquerading as third party, um, third party, thank you. Um, and so that's the way it was. And so now, um, just kind of talking through this, right? So now when I go to target.com, it sounds like because cookies have fallen out of the internet, they no longer can track.

Third party masquerading as first party, yeah. Ha ha ha.

my browser is like as I'm browsing around, how long can they actually remember me over there now?

Okay, yeah, so the third parties have not been completely, it's not that their cookies have been completely removed. Their cookies have just been given a very short time to live. And so, right, usually the default is this session. At least that will be the default for all browsers here shortly. So if you open the page and then you navigate around page to page to page to page, it'll keep you connected until you fully leave that site, at which point the cookies are deleted. So the default behavior,

Hmm

is just the session that you're on. Now that's where things are headed. Each browser today is implementing this a little bit differently, so differences may vary. There's a website you can look at if you really want to get technical on this called cookiestatus.com that attempts to track which browsers are behaving which ways. For instance, Safari is the most aggressive today. They basically are shutting down every third-party cookie they see as often as they possibly can.

Mm-hmm. Okay.

Whereas Microsoft and Firefox have said we want to do that, but we are aware that there are parts of the internet that are good, that aren't tracking related, that are getting damaged by the removal of this cookie. So they're maintaining like a white list or sorry, a black list of sites that they want to block. And they're using that as the signal to decide what SuperCookies to delete. And sorry, I apologize if you guys heard that doorbell ring.

Yeah.

Should I say that part again? I guess I should say that. No, okay. Okay. So, the, and so different browsers are currently treating this differently, but I would imagine that as, especially as Google kind of pushes their final piece into this place, that each of the browsers will start to navigate closer and closer together as far as their individual solutions becoming more heterogeneous, more homogenous, very similar to each other. They'll all navigate to a place where eventually all third-party cookies are effectively...

We didn't hear it, it's okay.

and you are limited to that one session experience. That all said, a third party masquerading as a first party, which is like, you know, your wishlist tools and things like that. If their engineers go and do the research and reading, they should be able to figure out a way to signal to, at least right now, Safari and other browsers, hopefully in the future, Hey, I am a third party working on behalf of this first party.

And I've demonstrated that the shopper wants me here. Can you give me at least seven days of information? So if the shopper leaves the site today and then comes back tomorrow, that I can at least track them for up to seven days. That signal is a possible to achieve for tools that are interactive on the merchant site like Wishlist. It's not achievable for a company like Google because there's no interactive component to their pixel. So any interactive component can do that.

Hmm. Okay, so let me-

So let me see if I get this straight. So before, really these different sites, especially like a target.com could kind of, if they had the power to do it and they wanted to do it and the servers to do it, right? They could just remember me and everything I ever did, especially on target.com. And then with the power of these cross domain partners, they could also see every, a lot of the other things when I was doing on the internet, depending on who was willing to share what, right? So now these new changes are.

Really, it's very difficult to first of all, even know who I am and remember who I am. Right? That's what it sounds like what's really changing.

I think one distinction we should make sure is very clear here is this has everything to do with right at the moment that you arrive to that site and you've never introduced yourself to that merchant before. So if you're a long time customer of Target and you've been there forever and you have a login and you've got like points or something that you're using and order history and stored credit cards and all that kind of stuff, those cookies are not gone. So every time you hit target.com, you're still logged in, right?

And as long as you're that kind of user to Target, they will always, Target at least, will always know who you are. And so really it's about those people who are coming to this website for the first time or multiple times without really identifying themselves. Those shoppers, every time they return, will look new to most third parties. Because target.com is a first party, they can still kind of track you over time, but they might have...

no idea how to tie you to identifiable information that's outside of their platform until you identify themselves because all they have about you is a number that represents your ID. But because that ID is not tied to an email, it's not tied to a phone number, it's not tied to something identifiable about you. And because third party cookies can't track you privately, or what's the right word, can't track you anonymously anymore, every time you return

Mm-hmm.

To third parties, you will look like a new person every time, whereas to target, you will look like this nebulous, unknown person until you identify yourself.

Got it. So it sounds like maybe my experience on maybe big retailers who have this sort of power, that those experiences might not change a ton, but it does sound like these, if I think about the changes that are happening, it sounds like there are a few different types of organizations that are gonna be hit the hardest. Number one is, so let's kind of do a breakdown of this, Ryan.

It sounds like to me that advertisers, because they don't have a first party relationship with the user, right. They're going to potentially be hit the hardest, especially those that don't operate with a browser, i.e. Facebook, right. And we're going to take, I think in our episode three, we're going to talk about like these big, big companies. Um, and so we don't have to dive too much into that, but I think as a, as just an example.

You know, can you talk a little bit about the power that advertisers now have lost and essentially why?

Yeah, so historically, if you were to, let's say, you've never been to target.com before, but you've been linked to a product that's of interest to you, and you visit, and Target has no idea who you are, aside from that you're visiting, and you're this unique, unknown user, and you look at three or four products and leave, historically, the third-party platform might know who you are because they've seen you on 10 other sites. And

The reason they've seen you on those sites is that those sites have also installed the same pixel. If you visit a website that has none of these pixels installed, they can't watch anything. So and by the way, I'm using the term pixel that might be technical here. Pixel is just a line of code that sends a signal back to the third parties every time you visit somewhere and it sends the cookies with it. And so those IDs being Facebook, being Google Analytics, being anybody who, yeah.

third party being Facebook third parties, right? Facebook, Google, right?

Every advertising powered platform like TikTok, Facebook, Google, they all ask merchants who are trying to sell products on their platform to install this pixel technology on their website. So any given website probably has the Google Pixel and the Facebook Pixel and the TikTok Pixel all installed right now. And those are sending details back to those third party platforms about your visits. And if that platform has been able to identify you on a different website and then you come and visit this website and this website doesn't know who you are.

Facebook still knows who you are and can develop profiles of your interests. The way this will ultimately shake out though, is that if you go view a product on a merchant website that you've never had a relationship with before and then leave and then go back to Facebook, today you might see an ad for that exact same product that you just saw. In the new world, that won't be possible.

because the third party is like Facebook won't be able to identify who you were when you looked at that product. And so you won't see that product necessarily in your Facebook feed anymore, unless the merchant you're visiting is a merchant that knows who you are. At which point they are going to basically, I mean, what we're seeing merchants doing what we're seeing advertisers recommend that they do is collude with the advertiser to identify you to the advertiser.

so that the advertiser can know who you are. So if you're logged into Target and you view a product and then go back to Facebook, you might see an ad for that product because you've been identified by Target for the benefit of that ad going back out to you on the platform.

So that's really interesting, Rem, that you bring up pixels because we've talked a little bit about the anonymous or sort of this unique idea, which is a cookie, right? That's been attached to me, the end user as I go around the internet. There's like billions of those, right? On the pixel side, so this is a technology that our listeners that are marketers, Econ, I mean, anything within the marketing and probably a lot of other areas of the business, like pixel technology would be something that they're very familiar with. So are we basically saying that

Yep.

Pixels are an example of this third party masquerading as first party technology, and that is essentially, there's new rules and new algorithms around that according to the changes that these browsers have made.

Pixels themselves are exclusively third party. The only way to masquerade as a first party is if you have interaction with the user. So a pixel would have to change its DNA to be something that someone clicks on and interacts with and plays with for it to masquerade. But yes, the pixel, traditionally, the way the pixels have been working up until now is there's simple tracking mechanisms. You hit a webpage.

Okay.

This pixel turns on, it's just a line of code inside the merchant, the merchant put in there themselves that says, hey, let Google track this. And then it sends a little signal, hey Google, this user with this cookie has viewed this page. And then on the back end, Google says, hey, I recognize the idea of that cookie, that's Ryan. And then it ties that signal, the fact that you visited that page into your overall profile that they know about, so that when you come back to look at a Google ad later,

they can say, what has Ryan been looking at lately, and offer you an ad targeted specifically at the products that you were looking at recently. That, because it's a third party cookie in the new world, if you're visiting a merchant that doesn't know who you are, Google's gonna still get a signal that says, here's an anonymous user looking at this product, but they won't be able to tie you back, they'll tie that event back to Ryan, unless Ryan,

at that merchant says, hi, I'm Ryan. Here's my email address. At which point that merchant will have to collude with Google to send them, hey, here's some identifiable information about this person and the events that they recently interacted with. Now please hide that back to the profile of Ryan. One key thing to note here, this is very technical stuff. Sorry for those of you who this is going over your head. There is a bunch of laws and concerns around like,

target giving your email address to Google. So usually they don't do that. What they do is they convert your email address into another kind of ID. It's a one-way hashing function that can't be converted back into your email. So the signal that they're sending through isn't Ryan's email, it's this unique ID that everyone can generate about you once they know your email. So your email isn't getting handed around through millions and millions of companies.

Mm-hmm.

It's just this hash of your email that's getting handed around.

It's kind of like a username for your email. Unique.

Yeah, it's a username for your email that you put. Everybody has the same little piece of code. They put email in one side, and now it pops out the exact same string that represents you on the other side, and they only talk about that token about you around the internet.

Mm-hmm.

Got it.

So as we wrap up just talking about advertisers and start to talk about brands, how this is gonna impact the majority of brands out there that are not target.com. We need to talk about the other 99, more than 99%. But I think that's why it's been interesting to watch the changes that have happened to Facebook, because they don't have a browser. Google has a browser, Apple has a browser. So they're probably the ones in the biggest, they've been the ones in the biggest,

Yeah. Yep.

sort of impacted the most, right? Which is why we're seeing sort of them scramble to improve their advertising platform, right? Because these are the changes that are really impacting them the most. And then of course impacting a lot of advertisers as well, which are typically the drivers of new customers, which is why I want to sort of use this to transition into talking about brands. Like...

Brands are now going to be hurting, I would say, in two different buckets, right? Number one, finding new customers. Because they were relying on advertisers. We just got done talking about them being hit the hardest with these changes. So now they can't find new customers, right? Then on top of that, Ryan, maybe we can talk a little bit about what are the implications? What do brands need to start thinking about?

doing on their side to start to identify users when they come to their site, start to think about how can they collect more pieces of first party data earlier in the customer journey, right? So that they can start to resolve, Ryan has a unique identifier, who is he, what's his email, what's his phone number, you know, so start to build that profile around you. That seems like the two biggest impacts to brands. So can you talk specifically about...

you know, those changes in that impact and maybe touch on third party partners and these third party partners masquerading as first party, right? And some examples.

Definitely, yeah. So in the earlier timeframe of the internet, before the iPhone, in the early 2000s and kinds of things, the majority of internet traffic, the time people spent online was visiting a variety of websites like blogs. And I can think about the various places you would have gone, but you would have visited a bunch of different domain names all in a given day. And...

Nowadays, a lot of time spent is really spent in specific platforms. Like maybe you're a person who just scrolls on TikTok for 10 hours a day. If you're that kind of person, that might be where you're spending all your time. You're not visiting as many third-party websites as you used to. Yeah. So companies like TikTok and Google and Facebook, who have the majority lion's share of viewership time on the internet,

guilty of charge drain.

they're getting a lot of data about you just by the fact that you're on their platform so frequently. So they're gonna be able to put together some level of advertising information that's gonna be helpful to giving you valid ads in those spaces. But they are going to lose some of the behaviors you've been doing anonymously online. And so, like I said before, if you visit a merchant that you've never actually identified yourself to before, and then come back to TikTok.

you probably won't see an ad for that product anymore. And that will be a detriment to TikTok and to Facebook and to Google, since they cannot show you probably the most relevant ads you should see, because that's the one you've been recently thinking about. And to you, that will feel less creepy, which will be good, but to the, you know, the bottom lines of both the merchant and these advertisers, they're going to struggle with the fact that they don't have what's really, what we in the industry would call top of funnel data.

data that comes in about you when you haven't identified yourself. This is causing these advertising platforms to put out a lot of documentation recommending to merchants to push harder on you to identify yourself sooner. So you're going to see more and more attempts as you hit a website to, if they don't know who you are, to get your email as fast as you possibly can. And usually a lot of us choose not to give our emails or phone numbers.

until we're ready to buy because the incentive is, we'll give you a 10% off discount coupon if you identify yourself to us, at which point then I'll buy, but I don't want that discount coupon until I'm ready to buy, so I'll wait to identify myself until I'm ready to buy.

That's exactly how I shop. I go to the website, I sort of figure out what I want, you know, I take some screenshots, and then I leave, right, until I, you know, think about it again or, you know, maybe see another ad. And then I go back and I open up Incognito mode so that I can like scroll and like get the coupon code when I'm ready to buy.

Yep. So in this world where internet becomes more private, the beneficiaries of the power shift that's going to happen here will be anyone who has a longer term identified relationship with you. So if you happen to shop on Target regularly and frequently and you're logged in all the time, Target's going to have a better, you know, they're going to have an easier time marketing to you.

than say a mom and pop shop running a small website business because you're likely logged in on Target, you're not logged in on the mom and pop shop. So really what's the effect of this privacy change is really shifting power into these larger and larger retailers, larger advertising platforms, larger social media platforms, places on the internet that are considered more one-off websites and blogs and things like that, they're the ones that are gonna be impacted the most.

Mm.

on both sides. So on the retailer side, so if you're a D to C retailer, smaller than the target, then you're going to have a harder time getting ads in front of people that you want to get in front of unless you can identify them. If you are a blog writer and you are making a lot of your money off of advertising in your blog, your advertising is going to become less effective because you as the blog writer can't identify these shoppers either.

And so when it's time to serve that person an ad, the advertising platform is going to go, this is some random person. So let's pick a random ad and serve you some random ad. They won't be able to say, this is Ryan, he's in his mid thirties, he's interested in surfing. Let me give him a surf ad. They won't be able to know that anymore, especially on these smaller platforms. And so what this privacy initiative will do is it will drive

We don't know. At the top of the funnel, they visited, yes.

more and more centralization of our internet usage because websites like one-off blogs won't be able to identify you, which means they won't be able to fund themselves. And if they can't fund themselves, they will likely shut down. So we'll see less and less valuable content outside of the big players on the internet as time goes forward. And then we got to talk about browsers too. Make sure we don't forget to talk about browsers. But let's, yeah. Yeah.

I think that makes sense too.

So yeah, so we're going to talk about browsers. And we're actually going to specifically talk about browsers in our episode too, but we'll touch on them in this episode. So just to kind of talk, like do a little bit more of a wrap up for brands. So brands are going to be impacted, which is probably what they're already feeling. And we talked to a lot of brands. So we hear like, look, finding my new customers and identifying them earlier in the customer journey is one of my biggest challenges, right? And that makes sense now for understanding why top of funnel.

or why that particular segment of the customer journey is the hardest now. So it sounds like, Ryan, that if you can find tools that help you identify who those customers are and what they want, earlier in that journey, that's a tool that you definitely want to think about using. That being said, if you are a brand out there listening, whether you're a marketer or e-commerce director, something in digital marketing,

What are kind of what would be this like list of, you know, couple of questions that you would either ask these partners or tools that you want to use in your tool stack? Specifically, these are probably like Shopify apps, right? That you're plugging in to your store to power your wish list, your recart, you know, your band of cart software, your pop up forms. You know, is there any sort of considerations that need to come into play when you're evaluating these tools?

especially as it pertains to these different relationships and the changes around cookies.

So that's a good question. So what questions would I ask a platformer evaluating to be a tool on my site, like a user experience on my site?

As you think about some, I'm just thinking about some of these tools like wishlist tools as you think about, I'm trying to think of like text messaging platform tools or email collection tools, post or pre-checkout kind of tools. All of these tools, if they were doing any level of automated identification of the shopper before the shopper identified themselves, those tools are going to likely struggle a bit more.

So for instance, wishlist tools are going to start forgetting your wishlist unless you log in. These email platform, or sorry, let's say text message companies who try to click the phone number for you and then send the first text message out. Those companies, if they were trying to pre-fill the phone number and let the person just click a button, that pre-fill will likely stop working. A number of other, let you know, just anything that happens before the user identified themselves to you.

is going to become more anonymous facing and information is going to be forgotten regularly. What questions I would ask these tools is, I think the only question I'd ask is, are you innovating in this third-party cookie space at all to give yourself an advantage over other tools that might help me identify the shopper sooner? The answer to that question for majority of them is probably no, because there's, you know, beating this change is...

not going to be easy. I think the intention of this podcast eventually is to let you guys all know that Whym has a solution that might be helpful. But we'll talk about that. I'm not sure if in this call or in the next one or in the one after that. But yeah, these tools are going to struggle and they're going to have to get more innovative about how they solve for especially the top of funnel situation, the situation where you have not yet identified yourself to the shop, to the merchant.

So the wrap up for brands is, specifically ask, and I would say these are more like of these personalized experiences that I go on, my brand sites that I love and have these experiences, which is like favoriting, looking at my recently viewed or previously viewed items, if I'm creating wish lists, anything I'm doing without essentially logging in or giving those brands a piece of first party data to then attach.

to these items that I have interest in, which I would tend to do more on sites that I'm probably loyal to, right? Or that I'm sort of doing a lot with. Those tools need an option for first-party data to be collected earlier than when the shopper starts interacting with those tools online. And then also, it was interesting that you kind of touched on the power that these...

Yep.

these marketplaces or large retailers, namely like Target.com or maybe even Instacart or Amazon, these places that are able to look at what customers are shopping for and then re-serve them data. We've actually heard that a lot of our brands are using those types of platforms and engaging with them in native advertising, right? Because they are able to remember what shoppers are doing and shoppers are looking at and shopping for.

And those have been pretty effective strategies as they struggled to maybe implement exactly what they were doing before on, more of these cross-domain platforms like Facebook that would rely on that kind of data. That being said, I still find some of those advertising tools a great way to discover new products, which is great, but it's still hit or miss for me. It's still kind of like a 60, 40.

experience and when the ads are bad, they're really bad, right? And they're really obnoxious. Like the entire internet, my sister just had like a baby shower and now the entire internet thinks I'm having a baby and that's pretty obnoxious, right? So I think that's the experience I don't want to have. And so I feel like I am willing to give up a little bit of my data to have more personalized experiences as I visit, you know, these new brands and you mentioned sort of

It's hard to realize again that brands that are not these massive, massive brands and the 1% are the ones that are going to continue to have to work the hardest. And so, I think part of our podcast series is to help eliminate these brands ways in which they can have a leg up or at least understand and reduce confusion on how to be effective in this new version of the internet. So that's what we're out to do. The last thing I just want to touch on, Ryan, is just the end consumer. So.

You know, we talked a lot about just different examples of the types of like widgets and apps and features that you can experience as you go to different sites. You know, is there any big takeaway for you on you mentioned earlier that we've seen how regulations kind of fell down with this accept all and deny all banner right that takes up the bottom 20 to 30% of sites. Can you imagine a world in which, you know,

the most extreme version of this for consumers, what could that end up looking like and how could that end up impacting our shopper experience?

Well, your shopping experience when you go to big retailers will be relatively unaffected. When you visit the smaller sites, you're just going to see more aggressive pushes to identify yourself sooner, which will become obnoxious for you. And one more plug here that we'll eventually talk about Whym. Whym is trying to solve this problem for both shoppers and merchants, and we have some ideas on how to...

make the next version of the internet, not so annoying. So stay tuned. The takeaway though, is that, you know, your experience is gonna, in my opinion, degrade a little bit. I, as Ryan, I've had my three kids, they're all in their teens now. I'm not gonna have any babies anytime soon. I don't need a diaper ad, but the advertising platforms as I'm visiting my favorite blog are not gonna know that. And to me,

while the privacy is appreciated, I would prefer not to see the diaper ad. And so I think the majority of people who think about that themselves will probably agree in a lot of ways about that topic. Some people will say, you know what, the privacy is worth it. But I would prefer to live in a world where it's a little bit more useful than that. And more importantly, if I'm a company, if I'm trying to start my own company, I'm trying to get out there in the market myself,

I would like to know that I'm paying for ads to go in front of people who actually care about them I'm not paying for now to go in front somebody who doesn't care and so for those of us who are all you know, not big retailer owners or CEOs of Fortune 500 companies, you know, we're gonna struggle too and we're gonna have to figure out how to get smarter in this space I hope that in this podcast as we go in further episodes We can help you guys think through that and do better. So, you know at least move into the next version of the internet

that's coming on us right now smartly. And so back to you, Kelly.

Thanks, Arlene. So just to kind of wrap up here, in our next couple of episodes, we're gonna be talking about the major players in the industry and the different types of maybe apps, widgets. We're gonna touch on everything in the marketing stack, from like SMS marketing to the features you might be installing on your Shopify website and how these changes for more of a technical deep dive are gonna be impacting those experiences.

We're also gonna talk through a little bit more of, why are we seeing these ads around your data health? And is that like, is this sort of like a way to get ahead of this state of privacy sentiment and sort of what is this war going on between Apple, Google and Facebook in this space? And lastly, we're also gonna talk about, how women is working on a new generation of shopper identity online and building tools to help us visualize our own data.

be able to collaborate with it. So it's going to be really exciting to chat about that. Thank you to all of our listeners for tuning into our podcast and YouTube episode. You can find us on Apple podcasts and Spotify by subscribing to our podcast, Blind Data. And on YouTube, you can find us under the blind data playlist on our channel at Whym Wallet.

We also have a podcast newsletter. So if you'd like to stay up to date on new episodes and exciting content, we encourage you to subscribe there. You can subscribe to that newsletter by visiting winmullet.com forward slash blind data. And that will help you get updates on any new releases. Lastly, I would like to invite you to reach out to me, Kelly Nyland on LinkedIn to send me a DM or send a direct email to hello at whym.tech.

We'll put all of these links in the show notes for you so that you don't have to remember all of that. And finally, if you enjoyed this podcast, please leave us a review on the listening platform of your choice. It'll really help us understand how we're doing and get our podcasts out there. So thank you very much and we'll talk to you on the next episode.