The Privacy Paradox

Hey, listeners, welcome back to the Blind Data Podcast. I'm your host, Kelly Nyland, founder and CEO at Whym. And again, today I am joined by Ryan Hornberger, VP of Engineering here at Whym as well. Welcome back, Ryan.

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

So on our first episode, we talked about the death of the cookie and how this is forever shaping our online experience. And in this episode, we're going to take a deeper dive into some of these more technical details, Ryan, which is really kind of your sweet spot in explaining to us, you know, how these changes are rolling out on the Internet and those implications across lots of different, lots of different systems, namely like browsers, apps, widgets, consumer facing.

maybe Chrome extensions and applications online as well. So we're going to talk a little bit about that today. And just for our listeners out there, this series is really meant to demystify the changes that are happening inside browsers related to cookies and how our data is collected, as well as helping brands and decision makers understand what they can do to thrive in a cookieless future. So just a heads up for any marketers or folks in e-commerce

performance marketing out there today. This will be a great episode to share with anyone on your technical team so that you guys can both be on the same page about these changes. So anyone in development or maybe data and engineering, this in the first podcast, first episode will be great ones to share and to listen to together and maybe have a conversation about. So Ryan, in our first episode, we talked about all of these changes that are kind of

falling through from the inception of the cookie 30 years ago, almost 30 years ago now, to where we are today. And the acceleration of these changes really being brought on by the announcement around Google, sort of what we call like following suit, right? Following suit with Apple kind of as the leader in this movement around privacy and their whole ad campaign for the health of your data. So we touched a little bit about that, but we're going to talk

start talking today in this bit more of a technical deep dive on the privacy sandbox that Google has now assembled. So can you walk us through what is this Google privacy sandbox and what is it significant for the future of online advertising?

Okay, yeah, definitely. So perhaps a little of history first. The idea of moving to a more private internet by modifying how cookies work has been around for a long while. Apple, independent of Google, I think they may have seen this pretty soon as a way to compete in

the competition, the chess board game that they're playing with the bigger players in the market, like Google and others, if they can, for instance, kill Google Analytics for all Safari users, then they can be the sole purveyor and seller of advertising space to anybody that wants to advertise on an Apple device. And so they took the first shot really some time ago, years and years ago now.

saying, you know, we're going to be very aggressive about this. And they pushed into the market their answer, which is like, we're just turning off third-party cookies entirely right now. And they did roll it out somewhat slowly, trying out different models for how to pull it off. But today, they are one of the most locked down browsers you can think of at the moment. And I really do think that it was an attempt to kind of cut out competition in the advertising space to build up their advertising business.

Google, they are...

I think they saw that move and they said, we're going to do the same thing. But they did decide they wanted to spend a little more time trying to solve this problem for the rest of the internet that isn't a big player in the space. These big giant retailers are trying, they did decide they're going to spend some time trying to solve it for a lot of these smaller websites as well. I think the driver behind that is that Google does make a pretty big amount of revenue.

off of all these other smaller sites. So the idea that they would just like completely kill that revenue stream and let these smaller sites die in favor of just the big retailers was probably not very appetizing to them. And so I think that's why they took so long to come to the solutions they came to. The name they gave for the solutions they came up with is called the Privacy Sandbox. This is specifically a Google focused solution for the Chrome browser.

And it's a list of standards that they've been working on, not just alone, but with a bunch of third-party companies and standards bodies across the internet trying to come up with a solution that should still allow chunks of the internet that are more mom and pop to still operate with a functional advertising model. It's been very challenging to come up with an answer.

that is sufficient. And so they have been trying a number of things over the course of years, throwing away ideas, trying new ideas, et cetera, et cetera. This past May, was it May? They announced, hey, we think we've finally settled on the decisions we're gonna make. So the privacy sandbox today, if you go to privacy sandbox.com, can outline for you the more technical features that they are definitely aiming at, completely pushing into their net. And then they're also trying to drive these as standards for the rest of the browsers.

Now, whether all the browsers will follow suit is still yet to be seen. Um, some of these features are great. Some of these features are going to be messy and complicated, but hopefully the important thing is that all the browsers eventually standardize around these things. Um, at the end of the day though, there's, there's a lot to talk about, about the outcome of what they've built here and how it might impact the internet for you in general. Um, but the private sandbox is Google's answer to this problem and trying to keep the rest of the internet working.

Awesome. So thanks for giving us a quick update on that, Ryan. You know, it's interesting because you started by saying, you know, Apple saw these changes and they started making changes actually as early as 2015, um, which is now almost 10 years ago. And you know, it's I think we're living in, you know, today's world is really that data is about currency, right? Data is the currency. And so it's interesting to watch, you know, the changes that Apple is making.

Yep.

And they are labeling this or branding this, you know, data health and, you know, really positive sort of sentiment for users by surfacing more of this app tracking information in their app store. You can now go to any app and see what are they tracking on you. Um, actually it was just looking at the differences between what Instagram says they track on you and what the new threads, uh, app says that they track on you or addition, I guess you should just say. So.

You know, Apple doesn't really sell advertising, right? They're not an advertiser. That's not, that's not their bread and butter like it is for Google. So obviously Google has been slower to make these changes and more hesitant until they can figure out that they have found a solution that works, that still allow them to do their business as usual. Right. And, and still allows them to operate because at the end of the day, they are, you know, search and advertising based on that search is.

really kind of their main thing. So when you talk about, you know, Apple as an advertiser, I think we could confidently say that data is currency and that they're now going to be, the centralization of the data and the data that they have to share, which we talked about in the first episode, that now browsers really have all of this power. They're the ones that get to see who users are and what they are doing when they go from site to site to site. And they're pretty much the exclusive

the exclusive viewers of that data. So data is currency. I think that makes sense for Apple to sort of, for us to say that Apple will have a lot of power in that space. And also because Google has Chrome, right? So Apple has Safari, Google has Chrome, and these browsers will now have this power. But

How do you anticipate Apple might leverage that if they're not necessarily an advertiser, Ryan, leaving the fact aside that data is currency so that's valuable enough in itself, but can you imagine them monetizing this in any other way than just to sell apps? What's going on behind the scenes?

Well, I so one of the I Think you should always expect this outcome probably but one of the less obvious outcomes of this privacy Push isn't that everyone is more private universally. It's that

You're more private to a larger number of parties, but a smaller number of parties are becoming the exclusive owners of your of your information. So in the case of Apple, Apple is now the only company who can see what you're doing between applications inside the apps, as well as in between website visits on anything you're doing in the Safari browser or Safari embedded browsers. So Apple is becoming the only party who knows what you're doing when you don't identify yourself around the internet.

and especially inside of applications themselves. And this allows them a monopoly inside of their ecosystem to decide what they wanna do with that information, what they will, right? Apple does advertise. They do it primarily inside their app store. They will likely push advertising solutions out in other places where the data is powered by them and they are the exclusive owners of that knowledge.

And really, their bread and butter income stream is apps in the app store giving them 30% of all money moving across those apps. And if you are forced now to make an app to reach your audience, and then Apple is the only company who knows how to get to that audience, then you're pushed into their ecosystem where you got to pay them the 30% or you guys. So this is really a monopolization of the data.

basically creating an economic system where the only way you get to participate is if you play by their rules. And so that was Apple's move. Google in the same vein, you know, they are aiming to figure out how to do it a little bit more open than Apple has been about this. But at the end of the day, Google now, if you're using the Chrome browser, will be the

in anytime you're using the Chrome browser or an Android device. And so just like Apple, they're also going to be the sole seller of critical advertising space or critical mechanisms for getting at shoppers and key spaces of the internet anywhere they can create their walled garden. They're going to make it. Um, they're just incentivized to do that. They're for-profit companies. That's what they're going to do. And this privacy push, um, will definitely hurt those of us that are not the Google's and Apple's of the world. And it will definitely.

centralized power for these companies like Google and Apple as they continue to build out their infrastructure. The hope is that we find solutions that still work outside of those walled gardens, but those walled gardens are increasing their power every day.

So I have a couple of questions on that. Number one is there are other browsers. So if we could talk about other browsers for a minute. And then to tack on the second question, which is users may use more than one browser, and they're using more than one browser on more than one device. And so while it's safe to say that probably Safari and Chrome have the most data as browsers,

You know, what are these efforts that are going on with some of these other browsers? And like, what does it mean if I'm browsing the internet across multiple different types of browsers and different devices? You know, is that problematic or is it just harder to stitch, you know, maybe who I am together across the internet?

Yeah, so the most power, the place that has the most power to control your experience with the internet is the device. So anyone who makes the device, anyone who creates the operating system for the device, anyone who operates the device or like your phone, yes, your phone, your laptop, your tablet.

You mean a phone? Yeah.

Anyone who makes that piece of hardware is the most powerful person in the most powerful entity in deciding how your internet experience is going to operate. Um, and they, at the end of the day, we'll have the most visibility and the most control of your experience. The second most powerful technology that you have access to that you'll, you'll use regularly is your browser. Um, because a lot of the thing, anytime you want to access something on the

at the top of funnel behavior, at the, I'm discovering something for the first time behavior, at the, I'm watching, I'm meeting this company for the very first time experiences. Anytime you go out for your very, you know, exploratory environments, your browser is where you go. And so the browser is the second most powerful system in this environment with knowing your data and how those browsers treat your data is becoming increasingly more interesting and important.

Up until this point Most of your browsers have been open and the most famous Alternative browsers have been privacy centric, but an example might be the brave browser Now that Apple and Google and face area Microsoft and other browser makers are conforming to a privacy centric model companies like brave their

their approach to the market and the reason they exist is becoming less interesting because these browsers are basically differentiating themselves closer and closer to that browser. Most people I'm aware of who have more than one browser on their phone, they usually have their privacy browser and then they have the regular browser. You may have another one, for instance a lot of Chrome users have a third browser that allows them to install extensions. These browsers were differentiated for those reasons.

Hmm.

That may be less the case now that all browsers are heading to a more private-centric space. That said, if you go research the way that Google did it and you don't like their privacy sandbox model, but you do like Brave's model, you might still choose to use Brave for your more private activities. We don't see other types of browsers with different kind of pitches, but that's really how they're breaking down today.

Yeah, and then just to so you know, you might have might be using multiple browsers as an end user. Ryan, I use incognito mode for specific things. Actually, usually when I want to trigger an experience that I know I can get an incognito because like there's something funny going on with like my cookies or, you know, like I can't log in properly or I want to get a coupon code and I can't get the pop up box to come back up or, you know, different things like that. So I think as consumers.

We really understand what it means to be remembered and what it means to be forgotten, maybe in a tab or in a browser. So just, I guess, my last question on this is, does it mean anything as it relates to cookies? If you're using multiple browsers or you're using things like incognito mode, are there any advantages for the browsers?

Yep, yep.

Thanks for watching!

you know, with this situation or are they at a disadvantage?

So there's...

The current model, the current state of existing browsers today, if you have a privacy browser and you have a Chrome browser, the Chrome browser does have an incognito mode. An incognito mode is a privacy-centric mode for your browsing. The two things it does is it prevents you from recording history in your browser that people can find later or cookies. So any cookie you make in that environment when you close it goes away. So.

Because one, it deletes your history, and two, it deletes your cookies, it makes you more anonymous during the time that you are using the incognito mode. But it has been seen recently in the news that even though you're incognito to the websites and you're incognito to people looking through your viewing history later, you are not incognito to Google. So they still know what you're doing. So in those cases, I think that's been the pitch for privacy browsers, like, hey, even though you're incognito mode,

Great.

Google still knows what you're doing. Do you really like that? Come to our privacy browser and we won't do that. So, and at the end of the day, Brave browser, which is a private-centric browser, the way they are attempting to fund themselves is to just give you ads in the browser at the very, very top level of the browser. So even in Brave, they still know what you're doing and they're still trying to advertise to you with that knowledge at the very top level of your browser. And so at the end of the day, picking a browser will be more about

who do you want to still know your information, who you do, you don't. And so if you really don't like Google because you think they're an evil company, then you might not choose to use Chrome. If you don't like Apple because you think they're an evil company, you might choose to use Chrome and not Safari. Either way, whichever company you pick, you're effectively choosing who you want to know who you are. And it will be centralized to the maker of that browser.

So at the end of the day, I mean, we're still being tracked and maybe the picture of us is slightly more clear or slightly more blurry depending on the browser, the mode that we're in, or which device we're essentially on with our session data. The one thing that I actually am excited about with cookies is that I might be able to reinvent myself online and reinvent sort of what that data picture of me looks like. I think...

the biggest want in that perspective is to be able to visualize that data, to actually be able to see it in a way that I could understand it and maybe even collaborate with it, sort of in the future. We started talking a little bit about Google's privacy sandbox, why they're basically starting to implement this and their response or reaction to what Apple has been saying for a while.

Is there anything else that we could say about why is Google suddenly ready to make these changes? Is there any additional insight, Ryan, that you could offer our listeners on that topic?

Yeah, definitely. So, you know, I'm not a Google insider, although I've got friends that work at Google. I don't, you know, regularly sit down and pick their brains on secrets, you know. But I can tell you just from observing the public information about how privacy is being built and the announcements they've been making, I have some pretty good ideas of what's likely happening over at Google. You have to think that every decision that's happening at Google is going to be, you know,

based in a foundational question of, is this gonna make us lose a ton of money tomorrow? Or are we gonna find a way to increase the revenue tomorrow? That's gonna be part of the question every time. And I think a big driver for why Google's taken so long to turn off cookies is that it has really been a risk that they were gonna lose a lot of revenue if they moved too quickly here. And the fact that they are now saying,

We're ready. Let's go turning it on 2014 start testing now likely means that they have figured out how to maintain Their financial stability in this transition um, I do not have Specific inside information I can give you on how they're accomplishing it, but it likely means that they feel confident That when they turn this on that their revenue is going to either go up or stay stable

That was likely done. The proof of that was likely done with a ton of scientists studying a ton of data, tweaking tons of models inside their platform until they were able to achieve either parity or better than what they had before in a world where cookies are deleted.

Yeah, and to give an example of that, Ryan, like I know how you and I make hypotheses around what we're going to build on our product roadmap, right? So it's likely that a bunch of Googlers got in a room and said, OK, if cookies are going away, what are the other signals that we have access to? Or if we agree to kill the cookie, right, with everybody else, what are the other signals that we could potentially test, right? For how, you know, how users are.

Yep.

searching how they're browsing, what actions they take after that. And they probably made a series of hypotheses and then started testing them to see how close those matches could get to their original sort of advertising algorithm, right. And then they just picked the winner over time. Is that sort of what you're saying?

Exactly. Yep.

If I was in charge of this at Google, that's exactly what I'd be doing. I'd have a team of scientists sitting in a room and studying the data, tweaking the models, playing it out. I probably have had features installed in the browsers for years now that let me simulate the future and let me test all of this. And anyway, I would not expect Google to move forward unless they felt confident that they had the financial challenges solved.

Got it.

And the privacy sandbox is actually the history of watching that evolve Kind of demonstrates that they've tried a number of features. It's very clear what they think they're going to lose just by the features that they are creating and And so I think that's one of the big drivers is I think that financially they're feel confident now Secondly, I think that there's a lot of regulatory pressure to get this done and I think that there's probably this

game going on between the regulators and companies like Google to say like, hey, get this done or we're going to do it for you. And Google is probably saying, give us some more time, give us some more time, give us some more time. And at some point someone saying you're out of time. And so I think that they're running up against this risk that if they don't move now, regulation is going to get in the way. And if you look at the private sandbox features, we can go into details about a few of them if you'd like.

the features demonstrate that there are technologies at least available for us to play with that might make the internet still function reasonably well and fund itself reasonably well as long as you're on the Chrome browser or as long as other browsers implement these features. That said, they're moving so quickly here that it's unlikely that we've proven that these features

will not hurt other companies. Because the other companies haven't had time to try these features out themselves and really prove that their business models still operate in this new world. Google saying, hey, we think these features will work for you. You can now play with them today. I think this month, actually in July 2023, they are going to be turning on a test mode so that...

Mm-hmm.

companies can start practicing with us, but they're not giving these companies a lot of time. Which makes me feel like they're moving a little bit faster than those companies would like. But at the end of the day, Google is going to defend themselves and nobody else. I think it's nice of Google that they're actually trying to help these other business models work. Whereas Apple's approach is like, you know, we don't care about you. We're just turning off cookies right now. Good luck. The rest of the internet, you know, that's Apple's approach.

Google's approach was like, we don't want to necessarily say good luck to the rest of the internet. And so they are, it is useful that they are, they are attempting to solve it. But at the end of the day, all that's really happening is that the technologies that solve it are just becoming pushed into your browser rather than into independent third party platforms. There is a very big risk with that, that is resulting in lawsuits all over the place on this topic.

If you centralize the power of deciding what adds to show into the browser, that means the information is more private, but it also means that whoever makes that browser is deciding how to decide who you are. And if you're a third party platform trying to differentiate and you're saying, hey, I might be able to develop a better picture of Kelly than Google can do it. Now that information is all in the browser, you don't get innovate in that space anymore. Only Google can innovate in figuring out what Kelly is.

And if there are political motivations or there are just internal motivations to, you know, hide certain aspects of Kelly's personality from everybody else or to, to paint it in certain ways, then the power that decides who you are is really centralized with one company, the company that makes your browser. And so now picking a browser will become increasingly more important as you decide how you want the internet to work for you.

I love that, right? Picking your browser. Like, you know, had we ever thought about that really? No, not, you know? So I think that's really important to talk about. And, you know, I just wanted to clarify, too, like, who is the privacy sandbox for? Is this for brands? Is this for advertisers? Like, who's going to be playing with this?

No.

So the Privacy Sandbox, some of the features make it possible for wishlist tools and third-party apps to have better experiences when cookies don't exist. That's kind of number one, or embedded experiences. I'm trying to think of other examples like, you know, email collection or phone number collection type tools or.

Any tool where you use a third party to render something on your screen. Some of the part privacy sandbox is designed to help those companies, but the real financial driver of the privacy sandbox is figuring out how, when you visit that mommy blog, that's a really small company that's like, you know, run by one person that's making it, you know, herself, um, how does that person still serve a relevant ad to Kelly?

That's what the privacy sandbox is solving. And the way they do it is they're effectively moving all the technologies that we would have built on an advertising platform stack to decide what ad to show you. They're moving those exact technologies into your browser. So your browser is now being told, hey, here's a bunch of possible ads for this person. Can you pick the right one to show this person at this time on this mommy blog website? That decision is now being pushed into your browser rather than.

you know, on a server somewhere run by some third party pixel tracking company.

Got it. So the placement of where that bidding for me is happening is actually changed. And the reason that's important is because in our first episode we talked about how blurry that picture might be when I first visit the website. So if I'm coming to a website for the very first time and the browser has this whole, you know, it has a whole folder full of things that it could show me, it doesn't really know how to match me in that moment.

Yeah.

Right? And so that's why this is becoming a problem. And so what you're saying is the Google privacy sandbox is for software companies who are looking to create better experiences, right? Like on these different sites and maybe more specifically, like those that also operate with affiliate or advertising revenue and in those that make money with those types of mechanisms.

Correct.

So let's talk a little bit about brand store friends and the impact of how these technical changes are affecting store friends. So in the first episode, we also talked a little bit about personalized experiences when my users come to my site. So my shoppers come and I don't know who they are. My job is to identify them and what they want.

as quickly as possible, right? That's sort of these new rules that we're playing with. And so we want to go out and we want to find tools that help us do that. Right. And because we can't rely on anonymous IDs and we can't rely on the software tools that we use to rely on that would track those users across domains and in other

you know, marketplaces or areas where we could at least glean some information to create more personalized experiences on site. So a lot of the features that fall into this are wishlisting, cart software, which we should definitely talk about carts for a minute. So, you know, re-cart software, re-abandon cart software, wishlist favorites, recently viewed, previously viewed, all these things that help us curate the products that we want to see and remember.

on sites as we visit over and over again, especially because we have short attention spans. Like we might leave that browser tab open for, you know, three months, right? And then want to come back to it and sort of remember, oh yeah, what was I doing here, right? What was I shopping for? So, you know, as software companies start to use these different tools that are being made available by Google, you know, what are they allowed? What are the options for them?

now with these kind of new algorithm rules in the browser.

So the privacy sandbox, to remind you, is it's only going to currently apply to the Chrome browser. So companies who are advertising platforms, it's like there's companies who compete with Google to advertise on blog websites. And they're an alternative advertising solution on these blog websites. And you might, as a merchant, you know,

say, hey, I'm trying to find new shoppers. I know that these bloggers are in the right audience space for me. I like to advertise on their sites. And you can kind of work with a platform like this to reach out there. What you've done before, because of cookies, if someone visited your site and left, then went and looked at that blog later, you could advertise them your specific product. Now you're going to have a much harder time doing that. Unless the advertising platform you're using

employs the privacy sandbox, at which point the privacy sandbox solutions should help resurface that merchant to you while you're on the blog site, assuming the advertising platform is using it and assuming that it actually works, which we are still waiting to prove. And so there is one interesting advantage coming out of the privacy sandbox, and that is that they're coming up with a browser-powered solution for attribution. For those of you who are not...

in advertising space at all. One of the biggest challenges in advertising is proving that the ad worked and that the money you're spending is worth the money you're making. If you spend $40 to get a person who spends $20, then you're losing $20 per person. And so you need to basically prove that you can make a profit off of the advertising you're doing. And attribution has been one of the biggest challenges in the industry out there.

One of the privacy sandbox features that's coming out is an attribution API that should theoretically simplify this measurement that says, hey, the person who saw this ad on this website made the purchase. And that, so the attribution API is actually very interesting, very excited to see if it actually works and if people will use it. I'd really hope that if it is useful, that other browsers would employ it so that all the browsers are supplying the same features for the internet.

Yeah, this is going to be a space that we're going to be navigating for a very long time. So stay tuned to this podcast so you can learn more as we learn more and we'll if you have today. Yeah.

Attribution is definitely like, you know, that's something that marketers are struggling with like more than ever. And there are great tools out there to basically make better guesses at your attribution, right? But because there were so many different parties, right? Based on like your pixels, everyone wants to take credit for your sale, right? Everyone takes credit for your click and.

Exactly. Yeah. You make one purchase and Facebook's like, that was my, I get credit. And then TikTok was like, no, I get credit. And then Google was like, no, I get credit. And then figuring out who actually deserves credit was a big pain in the butt. Yeah.

Totally.

Yeah. And now it's gotten to like 35 channels because your email platform wants to take credit and your, you know, um, your influencers want to take credit. So I have a couple of questions. You've mentioned blogs a couple of times, but I think most marketers would, you know, sort of admit that they don't believe in blog and banner ads, you know? So talk about like, how does this impact maybe like, you know, a lot of marketers are working with like influencers, right? Is it's, is the same sort of rules like apply with, okay, I'm working with a bunch of influencers.

Okay, yeah.

And a lot of influencers, maybe they have a LinkedIn bio tool where they have their feature and their different things, or they have particular content. How do these new rules make this either easier or harder once you're working with a group of influencers?

Yeah, so there's a variety of ways of finding your audience as a marketer. And the way we've been focusing on this entire time has been audience automation. Right? So, rather than you going and like, you know, if you're Coca-Cola, you might go to a stadium and convince them to only sell Coca-Cola in the stadium and then put Coca-Cola banner ads all over the stadium and you create a personal, direct relationship with that stadium. And that's how you market.

in that area of your customer base. And then you go find another stadium, you go find another stadium, you go build all these deals one at a time individually. That's one way to do it. Same thing goes with social media influencers. Likely if you're working with an influencer, you identified the influencer as a marketer, you contacted that influencer, you worked on a personal deal, that influencer is working your advertising information into the content of their videos, the contents of their podcasts, or the contents. These direct relationships are not...

really going to be impacted by the automated technology changes that are happening on the internet. A lot of marketers have become very talented at going into a Facebook platform, installing a pixel on your site, and then saying, hey, we've identified these 200 or 500 customers. Find us customers that have the same interest as them.

And then they configure Facebook to do that. Facebook, because of what they know, can then go find what they call look-alike audiences and then spread the word that, hey, you know, Kelly liked this. It's likely that Kelly's friends also liked this. Let me advertise to Kelly's friends. And then they kind of, so automated marketing based upon these like audience-based search criteria are really what's gonna change here. You'll see impact inside of YouTube. You'll see impact inside of Facebook. You'll see impact inside of TikTok about what they have, what they know about you.

And so those advertising spaces are going to have to get smarter and smarter. Um, then again, these are also big, large organizations consuming a lot of time on the internet, at least, you know, viewership time. So they have a lot of data about you, even though you're not, they're not watching, you'll be able to see as much on the internet walking around, but they know what videos you're watching longer versus other videos, that kind of stuff. So they're going to be able to develop reasonable profiles about you in these walled garden spaces, the places that will be the most hurt.

Mm-hmm.

are going to be everyone else who's not a massive Fortune 500 type of company. And so yes, you're right, blogs are not necessarily always the most appropriate way to market today, but they are a useful place that people do find advantages on in key areas of the internet.

You know, all the innovation happens at the fringes, right? These, a lot of small companies innovate in very big ways. Big companies can't innovate nearly as well sometimes because they're stuck defending the thing they already did. And so we're going to see challenges in the innovative spaces of the internet more than we'll see in these walled garden spaces.

Things are giving us a little bit more background on that, Ryan, very helpful. So the next thing I just wanna talk about is the brand storefronts as it relates to the different tools that a brand might be using on their storefront. And there's this idea around auto deletion of this data and cookies, right? And the sort of partitioning of some of this data. I think there's some, there's a small number of scenarios in which

data will be maintained, right? Like across the users, I think maybe sessions is a better way to say that. Because we've talked a little bit about how really what's changing is two big things. The brand's ability to identify me when I come to the site. And then secondly, the brand's ability to create a more personalized experience for me as I interact across the site, if I have not identified myself with a...

he's the first party data that they can really attach to the rest of my behavior. Because until I do that, I'm really anonymous. And most of the time I am anonymous and now I'm more anonymous than ever because all of that data is just kind of getting like dumped out. So I think maybe first if you could just address what does it mean to have like server-side cookies and what do we mean by like partition data or data that

Yep.

can is kind of in this gray zone of being able to be kept or have some staying power.

Yeah, sure. So

The smaller the company you are, the more you will depend on specialist third party, you know, software as a service type solutions to build your business. As you get bigger, you tend to, companies tend to start building custom solutions for everything. So if you're a target, yeah, so if you're target.com, there's, you probably can't identify any code on their site. That's.

They just want to own more and more of it. They're like, we can do this better for ourselves.

that's managed and owned by some third party, right? But if you are, you know, starting a new t-shirt brand, it's very likely that you are just going to Shopify, creating a Shopify store, setting it up, and away you go. In a world where you own the servers yourself, there's more power to be had in how you can identify your users because there's two ways to make a cookie. You can make a cookie inside of the webpage from the user's browser side.

Hahaha

You can also make a cookie at the server side and push it into the browser from the remote distance. If you have control of the server, you have a little more power in your first party model to manage cookies and identity and all that kind of stuff. If you are using Shopify as your platform, for instance, Shopify has that power, but you do not because you don't personally manage the servers. So you are now constrained within the limitations of the platform you're using on what you are able to do, what you're able to learn.

which you're able to accomplish. You know, everyone's constrained in some way or another, but you're more constrained than a company who has server-side control. Due to that reason, when you are on a platform like Shopify and you bring on a third-party tool for, let's say, wish listing or more advanced cart or, yeah, anything in the Shopify App Store, those tools historically,

Just kind of anything in the app store. Really? Yeah.

If they needed some sort of persistent information about who you are to accomplish their goal, let's say a wish list, you come to the site, you add a few things to your wish list, you leave, or you add some things to your cart and you leave and you come back and those things are still there. If that tool was powered by a third party, then those third parties usually set some cookies in your browser to make that function happen. These are third parties masquerading as first parties. The...

Because to you, it looks like it's a first party behavior. That's why it's masquerading as a first party. It looks like you are interacting with this merchant site, but in reality, there's some third party tool powering it all. And when the security czars at these browsers decided to kill third party cookies, they could have just killed pixel trackers, people who just watch you quietly in the background and you don't even know they're there.

but they actually made a decisive decision. Like they thought very thoroughly about this and decided and documented their decision that they also wanted to kill cookies tracking tools for these third parties masquerading as first parties. And so anybody that powers your wishlist, anybody that powers your cart bars, they're killing those cookies. So today you can actually likely see this happening in your Safari browser. You go make a cart on a lot of different merchants websites.

in Chrome and come back three weeks later and those cards are still there. You do the exact same thing at the exact same merchants on a Safari browser and you come back and depending on how that merchant's made their site, their cards might be gone, your wish list might be gone, a number of things might have completely disappeared about who you are because they've forgotten who you are. Now these tools, in the case of Apple, who's the most aggressive here, that we're worried about because they're also one of the largest audiences out there in the United States, they make up like...

30 or 40% of internet usage now in the United States and 20 something percent worldwide. They said, hey, we're kind of aware of this little bit of a problem. We've offered a solution to tools like this that if they identify themselves to us and they signal that their intentions and the user has demonstrated interactivity with the component, we can give those tools a seven day window.

Mm-hmm.

to remember who you are, but it's still just a seven-day window. So if you come back two weeks later, your cart's still gone. And there's really nothing you can do about it. That like once you hit, once you, if you've, if you've, you're, uh, the authority is the browser and whatever the browser allows these tools to do, that's what allows them to do. So now these tools are starting to play a cat and mouse game with the browsers, trying to figure out how they can collude with the merchant.

Kind of.

to figure out a way to create a more persistent memory layer. But if the merchant's on a platform like Shopify, they might not have as much control as they'd like to make that possible. So companies like Target, companies the bigger that build their own custom solutions, they have a little more capability here. If you're in the Shopify ecosystem, which makes up a major part of commerce on the internet, and companies like Shopify, you're gonna see more and more struggle in this space.

So if I'm a brand, just to sort of give an illustration of all these different things that you're talking about. So if I'm a brand and I'm using an app, right, to power my abandoned cart software, right? I am now, there's a couple different dynamics that we're talking about. First of all, I don't own my own servers, right? It's expensive and I need kind of like a technical team to kind of...

do that. So I've outsourced that to Shopify. So Shopify owns the servers. Therefore, they own all of the data on the users across all of their brands, right? So it's a pretty good power position to be in. If you're a user of the server, you can use the server to store data. So if you're a user of the server, you can use the server to store data. So if you're a user of the server, you

Shopify actually, sorry, I didn't mean to interrupt, but Shopify is actually getting neutered here because they will know who you are on a per website basis, but they won't be able to necessarily bridge that data across websites anymore unless they get very creative. There is some work on their side happening to get creative there, but even they are gonna see struggle.

Mmm.

And is that because of the browser rules? Okay.

because of the browser. Yeah, if Shopify owned the browser, it might be a little bit different, but they don't. So they are.

So let's talk a little bit about that just to clarify. So the reason that you're saying that, let me ask this question, right? So Shopify to date, like I would say for probably their first 15 years, they were only a software tool, right? They were a software tool for brands to sell things. And me as a like a user, just like a shopper, I didn't know what Shopify was just until a couple of years ago when they started putting out ShopPay.

Now I started to see that button and I think they just started, you know, a lot more people have become sellers of something, right? And so they've accelerated their brand adoption within the consumer market. And so, you know, as we talk about kind of the advantage, right, of these tools that you should be looking at now for these solutions on, you know, on your product detail page. So if you're a brand, you want to put the right software companies to work for you on your website and on your product pages.

And in order to do that, these rules around that the browsers are creating basically say that if you have a relationship with the end user or the shopper, then you can essentially maintain that relationship and therefore maintain the data that you're able to capture, collect, and then use, of course, to create a more personal experience. So between Shop Pay and then there's the Shop app, which started with tracking.

right, just the ability to basically track your packages. Those two consumer facing experiences, and now obviously the Shopify is much bigger than that, are ways that Shopify can now create that first party relationship, right? That direct one-to-one relationship with the end user. Is that a way, Ryan, that they can kind of get around this maybe not the ability to cross domain track?

Definitely.

you know, from brand to brand to brand, is that one of the ways that they can essentially get around that.

Yeah, so as you read the documentation and all the history between engineers talking publicly online about how they're going to solve the privacy issue, the big conversation that happened that really pushed the deadline back and back and back and back and back was, hey, what about all the use cases that are cross website that are actually very useful? And then they always say like credit cards being pre-stored that can be then used on multiple websites like PayPal, right?

Hmm... Mm-hmm.

or like login, like, hey, Google login is really convenient. I just click the login with Google button and it lets me into each of these sites. If we kill the cookie too aggressively, tools like that stop working. And if those stop working, the major beneficial, you know, popular components of the internet just break down overnight and people can no longer log into their websites. They can no longer check out as easily like that's.

pretty bad. And so that was, you know, as you read through the history here, that was one of the major conversations about what they want to preserve. So if you're a company like Shopify, and you're watching these conversations happen in public about, oh, we want to preserve login, we want to preserve checkout, we want to preserve credit card storage, then if you're smart, you know,

business person, you're saying, hey, I don't want my company to die because the browser is about to kill its business model. Then you're going to say, well, where can I put my stake in the ground? And now you're seeing Shopify making a checkout solution. You're seeing them make a login solution. You're making, you're seeing them make an app that sits above the browser that still links you back to the website and has an embedded browser in it. So they are building all the tools that are still, you know, that the industry is still talking about should still be able to cross the domain.

and remember who you are. And that's why they're focusing on these key features is because they believe it's the only way to maintain this identity information as they go live. In addition, there's probably a number of financial incentives to why you would want to be the credit card of every checkout and the login of every checkout and all those kinds of things. So, these are the spaces that are being preserved by the engineers who are building the browsers. So these are the spaces where you invest.

Yeah, it reminds me of the four-part series that we did on the ever-changing landscape of payments, and it sounds like we need to do a refresh on that, especially as it pertains to data logins, credit cards, because, you know, the ShopPays initiative, similar to like Apple Pay and Google Pay, is a way to essentially identify, log in, and take a payment all in one click, which is really a powerful data capture tool, right? And...

you have that immediate sort of checkbox of attributions. You also know the purchase in that moment as well. So we're getting close to sort of wrapping up this segment. We talked a little bit about first party versus third party, Shopify's role in this. If you're an app out there today and you work with brands, right?

You're probably now thinking after listening to the segment, like how do I start to create that first party relationship with the end user? And hopefully if you're a brand out there, you're thinking about how many more apps can I start looking for that create first party experiences with my end user, right? Which has not actually been the trend. A lot of times in the past, brands want to use almost like whitelisted or white labeled or.

third party software that just kind of operates in the background, right? So now brands are only choices to essentially build those features themselves from a technology's perspective and get right down to the server level if they actually want to own and track that data, which is what we've learned today. And then the third thing is, or go out and find software companies that are able to do their job in this new environment. And a good indication of being able to do that is have a first party relationship.

with that end user. And a great, I would say a great way to think about that is does the shopper also know your, the software's brands when they interact, right? So good examples of this is like Clarna after paying a firm, right? All the buy now pay later solutions. They live as a value add tool on the product page and their branding is right there, right?

Correct.

rewards and like couponing and wishlisting. I mean, there's a lot of different companies, women's actually one of them in these categories that has that sort of front and center, you know, about what we're all about, putting our branding upfront, creating that relationship, that data, that positive data sharing sentiment with the user upfront. And that's gonna allow us to actually do our job in this new future. And so I would say that is what brands...

should be starting to think about, right, is what piece do they want to build themselves? What piece do they want to go out and partner? And how can they find partners that are going to be able to maintain their ability to do their job, right? Data collection, login, payments, wish listing, whatever that is with the end user. Is there any other kind of key takeaways, Ryan, for brands, you know, from that perspective?

Yeah, so as I was listening to you say that, I began to realize that we may need to give a little more of education here on exactly what you're talking about because you and I talk about this every day, so it's kind of like it seems obvious. But real quick, what Kelly's talking about here with first party relationships is if right now, your wishlist tool that's installed on your Shopify site doesn't reveal itself as a third party tool to the shopper. And because it doesn't do that.

It looks like you made it, which is cool. That's what you've intended to do But because the that tool is a white label tool It is bound and constrained by the rules of a third party and on your site and they can only see so much information if that tool were to suddenly say hey, we have a shopper facing version of our business and Those shoppers come to our site they log into our tool they identify themselves to us

they develop a first party relationship with that shopper for their purposes. And then they bring tool sets back to your site that are branded that say like, hey, this is the Klarna tool, sorry, is Klarna one of the fast checkout tools? Afterpay, afterpay, sorry, afterpay. So let's say, okay, so buy NetPlayer. So it's like afterpay, the fact that they say, hey, buy this product.

Um, yes. Yeah, bye now, play later. Yeah, that's right.

with four installments of payments over the course of the next four months powered by Afterpay and you log into Afterpay directly, that creates an environment where these tools can build more interesting identifiable information about you that does cross domain because as you interact with those tools, you are going back to their site to identify yourself and to finish the checkout or those kinds of things. And so as tools become

Peace out.

As tools begin to adapt to this space, they are going to start, you're going to start seeing more and more attempts to develop first-party relationships with all the shoppers. That just means there's going to be a lot more competition for people to be your credit card providers, there's going to be a lot more competition for people to be your login provider, there's going to be a lot more competition and innovation around every tool you use that would have been powered by third-party too.

create a more branded, more third party slash first party environment where the shopper knows all the individual organizations related to their transaction. And the more we do that, the intention of this engineered space by the browsers is they believe that will be a more less creepy internet. We'll see what the app.

It does sound like it's going to get less creepy because right now there's all these software companies operating in the background collecting your data. You don't know who they are, right? Because the brand has installed them as an app. Um, but in this new world, right? They all have to come out of the shadows and they all basically have to say, here we are, this is what we do and here's the data that we know about you. And the reality is like, a lot of companies know a lot of data about us because of these like third-party relationships. And so I think that's.

Exactly. Yeah.

I think it's really interesting to think about how, you know, like you said, there's going to be a lot of competition. It's also very difficult to build a company where you have both B2B relationships, right? Like, so you serve the brands and you also serve the consumers, right? With like an end user experience. That's pretty capital intensive. And so I think there's going to be a lot of solutions that we're going to start seeing out there.

Um, you know, and it's, it's probably going to be meaning a lot of competition. It also might mean a simplification of like websites, um, consolidation of tools. Um, and so I think those are going to be the biggest maybe opportunities or things that we're going to see, um, as a response to, you know, these changes. Um,

Definitely.

So, Ryan, thank you so much on our next segment. We're going to dig a bit deeper into other players in the market, specifically the larger players. We've touched a bit on Apple, Facebook, Google. We're going to continue to talk about them a little bit and touch on maybe consumer sentiment around data sharing and this idea of the health of your data, data health.

And so I appreciate you being on today to talk a little bit more about the technical details of the changes inside of the browser. And I'm just gonna do our quick wrap up here for our listeners. So listeners, in the next episode, we are gonna make some guesses at the motivation behind the players on the chessboard, those including advertisers, trackers, and marketplaces. And we're gonna focus on some curiosities and hypothesis.

Great.

around Apple, Google, Shopify, Anzalon, and Facebook. And we're gonna continue to talk about why and how Whym is working on a new generation or next generation of shopper identity online. If you enjoyed this podcast, you can find us on Apple Podcasts and Spotify by subscribing to our podcast called Blind Data. And on YouTube, you can find us under the YouTube channel at Whym Wallets. It's published under the Blind Data playlist.

So thank you for tuning in today. There's also a newsletter that you can sign up for to get notifications about new episodes and receive exclusive insights and content related to each individual episode. You can sign up for that at wimwallet.com backslash blind data. And I would also like to invite you to personally reach out to me on Instagram and LinkedIn.

You can find me at Kelly Nyland or send a email directly to hello at whym.tech. And finally, if you enjoyed this podcast, please don't forget to give us a rating or leave us a review. It's great feedback for us to have and we're really looking forward to staying connected and we'll see you next time.