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Nine questions to consider as Google starts its move away from third-party cookies

January 4, 2024
in General
Nine questions to consider as Google starts its move away from third-party cookies
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Starting today (Jan. 4), Google kicks off the trial run of its new Tracking Protection feature, set to eventually clamp down on website access to third-party cookies by default. Initially, this change will touch just a sliver of Chrome users — a mere one percent globally — serving as a glimpse into a third-party, cookieless future for online browsing.

Yes, you read that right. After four years of missteps and adjustments, it’s actually happening. Google is starting to phase out third-party cookies from Chrome. This marks not just the end of an era, but the beginning of a new, perplexing chapter in advertising — a terrain as unpredictable as it is uncharted. Digiday turned to seasoned ad executives for guidance through this maze, seeking clarity in the midst of profound change. 

Can someone grab a crystal ball and tell me the latest ETA for third-party cookies’ grand exit from Chrome?

After numerous false starts that could rival a suspenseful track meet, the plan to purge third-party cookies from Chrome has finally stumbled out of the blocks. Here’s how it might make it over the finish line. Google is going to remove third-party cookies from one percent of traffic in its Chrome browser. Once that target is hit, the crackdown will pause while regulators scrutinize Google’s own alternatives to third-party cookies. That’s likely to finish at some point in the second half of the year. And once it does, the cookie crackdown starts back up again, with Google looking to make its browser completely rid of third-party cookies by the end of the year. 

“It [this moment] makes it real,” said Loch Rose, chief analytics officer at Epsilon. “We can start to look at that one percent [of third-party cookieless] traffic to test out what the reach is for the people using those browsers. It changes the dynamic of those conversations.”

Hang on, that sounds uncharacteristically straightforward. Is that timeline likely to change? 

Yes, there could be another delay. Despite Google’s insistence on the contrary, a confluence of regulatory hurdles, timing constraints and technological readiness challenges might steer this timeline toward 2025. 

Tell me more. 

Google has its hands tied when it comes to axing third-party cookies in Chrome, and it’s all because the U.K.’s Competition and Markets Authority (CMA) has to give the green light first. This won’t happen until the watchdog has dug through all the details. Then there will be a “cooling-off” period lasting anywhere from 60 to 120 days. That’s the CMA’s window to do a deep dive without the chaos of Google’s changes already in play. This also puts Google in a tight spot. 

Think about it: If the CMA uses the full 120 days, Google has to pull the plug on cookies by the end of September. Pushing it any later would crash into the big holiday ad rush, which Google desperately wants to steer clear of. So, what’s likely to go down? Either Google races against the clock to ditch third-party cookies before the holiday ad frenzy (and that’s already a super tight squeeze), or they hang back and wait it out until early 2025. Given all the plot twists so far, betting on an early 2025 cookie phase-out looks like a pretty solid bet.

“It’s unlikely that anyone is going to be really impacted by third-party cookies going away until next January,” said Rob Webster, Goodway Group’s global vp of strategy.

If the Privacy Sandbox is given the green light, will it be embraced with open arms by the ad industry?

No, it’s probably better to describe the ad industry’s anticipation as cautious circumspection, rather than outright enthusiasm. That’s the same irrespective of the part of the ad industry, whether it’s ad tech vendors or browsers. The smorgasbord of technical, strategic and privacy-related uncertainties over the Privacy Sandbox makes it one of the few things the ad industry can agree on at the moment. In other words, its future is far from clear, even if the CMA gives it the green light.

“In general, the Sandbox approach will likely create more power for large platforms, the ones that have access to scaled first-party data,” said Jochen Schlosser, chief technology officer at Adform “This will ultimately help (very) large platforms. Small and mid-sized publishers will likely be forced to collaborate with these platforms to stay relevant. If this is the outcome, it also needs to be regulated, as the internet should stay a place that offers a level playing field for all parties involved.”

Why do ad tech vendors seem completely vociferous in their concerns over the Sandbox? 

Let’s be clear: Not all ad tech vendors see the Sandbox as an issue. Given Google’s dominant position in the market, some vendors might see collaboration with the Privacy Sandbox as a strategic move to stay relevant and competitive — a decision made easier thanks to the testing grants Google is offering.

With that said, there are other companies who aren’t as acquiescent. They don’t want to back the Sandbox while their concerns that it could further solidify Google’s dominance over advertising go untempered. To many of them, doing so now would be akin to buying a car before standardized and transparent crash tests have been conducted.

Aren’t ad tech vendors taking a risk doing this? 

Yes, they are. They could become irrelevant in the new privacy-first ad world, struggle to deliver effective ad solutions, and even face legal headaches for not keeping up with the Sandbox. And yet for some ad tech vendors, especially those on the buy side of online advertising, this is a risk worth taking — at least until it isn’t. For these businesses, the costs of building what would essentially be a separate bit of ad tech for the Sandbox are too high, while the benefits are unclear. Remember, the Sandbox only really offers credible alternatives to retargeting and contextual advertising as it stands.

But that’s just a fraction of what buy side ad tech vendors would need it to do. After all, these businesses rely heavily on detailed user data for precise ad targeting. Any decline in targeting accuracy or campaign performance due to the Sandbox could affect their competitive edge. In fact, the only reason why any of these skeptics are parking their concerns is because they’ve agreed to support the CMA in evaluating if the Sandbox could — despite all of its shortcomings — be an alternative. 

What about beyond the Privacy Sandbox? Are the other alternative IDs to third-party cookies just digital duct tape or the dawn of a new ad tech era?

It’s fair to say the landscape of alternatives to third-party cookies is both promising and complex. These alternatives aren’t merely “digital duct tape.” Rather, they signal a transformative shift in online advertising. However, like shifts on this scale these alternative IDs are in a veritable state of flux. They’re beset by challenges in interoperability, privacy compliance, and the effectiveness in targeting and measurement. Even the leading ones have their own problems. Hashed emails, for instance, aren’t the panacea to all that ails online addressability that many had prophesied. Yes, they’re a stable and privacy-compliant alternative to third-party cookies. But outside of the walled gardens, not many publishers have that kind of scale to support it. And even if they did, what’s to stop Google blocking emails? Its imminent crackdown on third-party cookies and mobile IDs show its open season on tracking solutions that compromise personally identifiable information. 

So there won’t be one alternative to rule them all then? 

Not in the foreseeable future. Marketers are now faced with a mosaic of methods for ad targeting and performance assessment. The exact makeup of this varied landscape isn’t set in stone, but there are telltale signs to guide us. It’s shaping up to be an amalgam of four distinct strategies: Firstly, authenticated IDs, harnessing tools like email and single-sign-on across various platforms and publishers. In the absence of these IDs, marketers are expected to lean on probabilistic IDs, an evolution from cross-device graphing approaches, aimed at forging links between different first-party IDs for enhanced cross-domain targeting and analysis. Then there’s the adoption of contextual or cohort-based tactics, employing content and device cues like time and location, combined with machine learning to categorically align similar devices by interests. Lastly, there will be the strategic integration of data partnerships and first-party IDs, specifically tailored to the publishers’ own ecosystems.

“This is the place where multiple solutions need to be tried and implemented before something concrete emerges post 2025,” said Ram Padmanabhan, who leads Havas Media’s CSA data and tech division in North America. “My thought process as a result is we can’t afford to sit still and wait for one to become the be all and end all. For example, we’re working with demand-side platforms who have their own universal identity identifier, and don’t rely on cookies.”

Does the complexity of those alternative IDs go some way to explaining why advertisers have found it tough to navigate?

Not quite. It’s more that advertisers, often caught off-guard, are stumbling over the upcoming changes. There’s a touch of irony here: Their struggle stems from a cocktail of outdated yet once-successful strategies, a drastic shift needed in data handling, evolving privacy laws, and the tangled web of new tech and partnerships. No wonder advertisers are dragging their heels. This is akin to teaching a cat to swim — sure, it’s doable, but brace yourself for a symphony of hisses, scratches and sheer chaos.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : DigiDay – https://digiday.com/marketing/nine-questions-to-consider-as-google-starts-its-move-away-from-third-party-cookies/?utm_campaign=digidaydis&utm_medium=rss&utm_source=general-rss

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