On the Trade Desk (TTD) conference call earlier this month, the first analyst question highlighted the upcoming changes to Google Chrome and asked about the effects they may have on the ability of advertisers who use cookies to track and target visitors.
Apple has already made similar changes, as CEO Jeffrey Green explains:
“Apple made some changes called ITP to their browser where they decided to just block [off] the use of all third-party cookies about a year ago and replace it with what they call ITP, which was essentially an algorithm that would decide what third-party cookies would be allowed to persist instead of both first and third parties doing well no matter what or existing on the browser no matter what.”
However, this change does not significantly affect Apple’s revenue to the same degree as it may for Google, since Google makes “95% of its money through advertising,” and Chrome has a much larger market share.
Going forward, Chrome users will be able to turn-off third party cookies. And though Green does not expect many users to take advantage of this new feature, it does expose a potential vulnerability to their main revenue source.
As Green concludes:
“I think if there’s any meaningful adoption of consumers opting out, it will then beg the question or force the discussion with companies like The New York Times between them and their users to say if you get rid of targeted advertising, you turn $8 CPMs into $4 CPMs and I can’t run my business anymore…
If they were to take away targeted advertising and what is an $8 CPM on The New York Times today turns into a $4 CPM, then the New York Times is going to be out of business. That’s what’s at stake.”
Wide Moat Investing 