[LMG S6] Issue 71: The Rise of Audience Analytics
Previously: A tracking script retrieves the existing cookie on a web domain if there is one, or sets a cookie on a webpage if there isn’t an existing one. The tracking script sends the cookie information back to the originating server, along with many other fragments of information.
A quick refresher from Issue 68: it is 2006. The market had just recovered, shaken itself out from the dot-com bust which started at the turn of the century and lasted about two years.
Post-bust, the remaining companies quickly realised that throwing money blindly was not the way. They needed to target audiences more specifically. Google led the charge with their IPO in 2004, demonstrating that targeted search actually brought more users. (They introduced similar ideas to their advertising arm, Adwords.) The race began: Facebook, Youtube, Twitter, and many more. Even the news was going online. And then the iPhone launched in 2007, sparking off the mobile Internet wave, and the rise of mobile apps.
These companies all had the same problem: they only knew what users did on their site, but not what these users did around the Internet. Each company set its own cookie and tracked its own cookie, and managed its own analytics (or an analytics company did it for them).
Then Quantcast got thinking: what if we could get these cookies synchronised? Better yet, what if we could get all these companies to load our tracking script on their sites (Issue 70) and thereby put our cookie on their sites? We would be able to gather cross-site data and build a more complete profile of the audience!
Now, why would these companies agree to that? There has to be some upside for them. The only thing Quantcast had to offer them was the very information it had gathered: in return for putting our cookie on your site, Quantcast would offer you demographic analytics on your site audience, more complete than you could ever hope to build by yourself.
Demographic analytics can help these companies know if their website design and other features and helping them reach their desired target audience. But this alone would not have catapaulted Quantcast into the limelight.
The true value of Quantcast’s cookie came when it was coupled to targeted online advertising.
Issue summary: In 2006, Quantcast offered complete audience analytics for any site that puts their cookie on the site. Websites would know more about their audience than they could otherwise gather through their site alone. But Quantcast would make most of their money through their offering to advertisers.
Another very short issue (phew!), that I hope explains how the unification of user data began. It is important to note that nobody was forced into this arrangement, at least not by the usual anti-competitive practices. Quantcast offered a product, companies that hopped on the bandwagon became highly successful at targeting specific audiences, and soon any company not doing that found themselves being unable to compete in the same space.
What I’ll be covering next
Next issue: [LMG S6] Issue 72: The Data Brokers
QuantCast does not do all its data gathering; it also gets information from other data providers, known as data brokers. Lets visit them next issue.
Sometime in the future: What is:
- booting up? [Issue 15]
- XSS? [Issue 8]
- a CDN? [Issue 8]
- a good reason developers write code and give it away for free online? [Issue 21]
- firmware? [Issue 34]
- OpenType? And what are fonts anyway? [Issue 42]
- What is involved in installing a piece of software? [Issue 48]
- How do apps know where a file starts and ends? [Issue 49]
- What is a password hash? [Issue 63]