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Google has changed course once again, announcing that it will explore a “new path” around online privacy instead of deprecating third-party cookies in Chrome. The dramatic halt to Google’s plans after four-plus years of promises and delays comes as the company’s vision for a cookieless future continued to face resistance from several corners of the ad landscape.
Many marketers will welcome the stay of execution for a technology that has long been a bedrock of digital marketing, but the move is likely to shakeup the growing alternative ID space. And while consumers and regulators have yet to weigh in, the decision might be moot amid the continued growth of cookieless spaces like connected TV (CTV) and mobile.
“This news has sent ripples through the industry. While it may appear as a reprieve for advertisers who rely heavily on cookie-based tracking, the industry’s trajectory towards enhanced privacy and user consent remains unchanged,” said Marçal Serrate, director of data technology at Azerion, in emailed comments.
Google did not detail what the new approach would entail, but said it is discussing the “new path” with regulators and will engage the industry around the developments. The company will continue to make available and invest in the Privacy Sandbox APIs — its proposed cookie alternative — and plans to offer additional privacy controls, such as IP Protection in Chrome’s Incognito mode.
“We are proposing an updated approach that elevates user choice. Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time,” Anthony Chavez, vice president of Google’s Privacy Sandbox, said in a blog post.
It is unclear if Google will choose an opt-in or opt-out mechanism for moving forward with cookies, leaving advertisers deeper in limbo. For comparison, Apple rolled out its App Tracking Transparency framework in 2021 and required consumers to opt-in to tracking by apps.
Since then, consumers behaviors around opting in have evolved: Across the globe, 50% of users now opt-in to tracking through ATT, a 10% increase since its debut, per AppsFlyer data. If Google decides to continue using cookies with an opt-out option, consumers should expect pop-ups like the ones currently in place due to the EU’s General Data Protection Regulation regulation.
“Expect more annoying EU-style pop-ups on every site you visit. This will be bad for UX, but will keep the regulators happy on both sides of the Atlantic,” said Rio Longacre, managing director of advertising and marketing transformation at consulting company Slalom, in emailed comments.
Winners and losers
Google in 2020 first announced that it would end support for cookies, a key technology in digital advertising, but delayed its plans several times, most recently pushing back the timeline in April. Throughout the process, advertisers, publishers, the ad-tech industry, trade bodies and — perhaps most importantly — regulators like the U.K.’s Competition and Markets Authority and Information Commissioner’s Office aired concerns about how the removal of third-party cookies would disrupt the digital advertising industry and put too much control in Google’s hands. The considerable pushback makes Google’s latest decision more of a moderate surprise than a true shock.
“I don’t see it as an announcement that significantly changes things,” said Loch Rose, chief analytics officer at Epsilon, in emailed comments. “The expected outcome is essentially the same — the only difference is more users may now wind up choosing to retain [third-party cookies] than if Google imposed the change, so just another step on the journey really.”
The journey to a cookieless future is set to continue, especially as the ad industry has invested countless hours and dollars in privacy solutions despite Google’s previous delays. Plus, the continued development of cookieless channels like CTV have made a post-cookie environment an inevitable part of advertising, no matter Google’s plans.
“A lot of the good work that was done to prepare for the cookieless future will continue to apply to omnichannel advertising,” said Grant Parker, president of personalization platform Flashtalking by Mediaocean, in emailed comments. “And with the continuing development of privacy regulations, it will still be imperative to be mindful of consumer choice and consent.”
Much of the work that has been done by vendors developing alternative IDs allow for tracking or targeting in privacy-safe ways. Google’s announcement will likely accelerate a culling process in a space that had already seen the emergence of a few strong contenders.
“Looking over the next year, they are probably all toast except for a few of the big identity spines. My guess is we now end up with just the walled garden IDs, plus The Trade Desk’s UID2, and LiveRamp’s RampID,” said Slalom’s Longacre.
AI, regulation still in play
While the news might lead to a reckoning for alternative ID vendors, not all ad-tech providers are created equal: Those offering advertisers cookie-based solutions could see new light, especially when incorporating the buzziest technology of the moment, artificial intelligence.
“Over the next few months, I expect to see an influx of new advertising solutions that utilize AI to analyze cookie-based data to better target customers,” said Eli Goodman, CEO of Datos, a Semrush company that provides clickstream data, in emailed comments.
Meanwhile, possible regulator and legislative action continue to loom large over Google’s moves and the future of online advertising. While privacy legislation in the form of the American Privacy Rights Act is again unlikely to be voted on by Congress, the Supreme Court’s recent Chevron decision muddies the waters around any regulation of internet privacy.
As advertisers wait for Google’s plans for a new path forward to materialize, they will likely need to keep working to address signal loss that is already affecting consumer tracking and ad targeting. More than half of U.S. consumers use a mobile web browser that blocks cookies, and more than 30% use ad blockers, according to Andrew Richardson, senior vice president of advanced analytics and measurement at digital marketing agency New Engen.
“Brands and agencies may feel relieved by this news, but they shouldn’t let their guard down. Even without this development, signals are already eroding,” Richardson said in emailed comments. “As an industry, we need to prioritize consumer privacy and adapt to a world without cookies rather than trying to circumvent the inevitable decline of these signals.”
via https://www.aiupnow.com
Chris Kelly, Khareem Sudlow
