Ed Raine - Jaywing Australia's Strategy Director - gives his thoughts on Google abandoning plans to eliminate third-party cookies.
Despite years of searching for an alternative solution that gives consumers privacy over their data while still providing advertisers with an effective method to target them, they came up short.
Why is it so hard?
Well, Google is caught between a rock and a hard place. On one hand, their users (and regulators) are asking for a better experience in the form of reduced tracking and increased privacy. On the other hand, detailed tracking plays a critical role in how Google makes its money from advertisers.
It’s a similar story to the position they find themselves in with AI. They recently announced the ‘Search Generative Experience’ to much fanfare, but AI overviews only appear for approximately 15% of searches - probably because doing so had a significant impact on their advertising revenues.
Regardless of why it happened, what does it mean:
For advertisers?
It is a win, at least for now.
Removing third-party cookies without a suitable alternative to targeting was always going to have a detrimental effect on performance marketing.
Back in February, IAB Tech Lab released a 106-page gap analysis report on Google Chrome’s Privacy Sandbox that found “Of the 44 basic digital advertising use cases analysed by the IAB Tech Lab’s Privacy Sandbox Task Force over the past few months, only a small handful remain feasible using the APIs in the Google Chrome Privacy Sandbox,”
Advertisers now don’t need to worry about this happening any time soon, but that doesn’t mean it won’t happen down the line.
For the wider industry?
Publishers are sure to be stoked that their main source of revenue isn’t being throttled any time soon. Global digital advertising platform, Criteo, determined that Google’s Privacy Sandbox - the company’s suite of proposed cookie alternatives - would erase publishers’ ad revenues by 60%.
However, a number of technology companies are likely to be frustrated given they had spent years developing new tools and software to mitigate the changes that now seem to have been permanently shelved.
So what’s next?
According to Google’s blog post where the announcement was made, Google has said they will “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”
My estimate is that only the most privacy-conscious users will make that choice as Google is unlikely to promote it front and centre given its potential impact on their main revenue stream. Having said that, the most privacy-conscious users are unlikely to be using Chrome anyway.
So really, nothing much changes in the short term.
But this won’t be the last we’ve heard of the situation. Google is under too much pressure from regulators (such as the UK’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO)) to do nothing.
They’ve likely made this announcement so that they don’t lose face by continuously pushing back a deadline that they can’t definitively commit to. My guess is that they’ll continue working on a solution, and once they’ve got it in place they’ll announce a new date which they’ll actually stick to.
There is a growing interest in privacy and so these changes are still coming, which means it’s still a good idea to focus on collecting first-party and zero-party data to use in your marketing campaigns. The more information you can (legally) acquire about your potential customer, the more effective your marketing campaigns are going to be.