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Some ad tech vendors are pulling back from Google’s Privacy Sandbox amid uncertainty

July 19, 2024
in General
Some ad tech vendors are pulling back from Google’s Privacy Sandbox amid uncertainty
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Amid delays, regulatory backlash, and even its most ardent supporters turning sour, Google’s alternatives to third-party cookies are now murkier than a London fog. It’s no wonder some ad tech vendors are dialing down investments and playing the waiting game for a sunnier forecast.

But unlike those publishers taking more drastic measures, these vendors aren’t abandoning ship altogether; they’re just tightening their purse strings — at least for now, according to five ad execs who were interviewed for this article. 

Here’s how one senior ad tech summed it up to Digiday, anonymously, of course, to avoid any misinterpretations by the peanut gallery.

“We have certainly reduced the scope of our work to what I would call basic support for Sandbox features for 2024,” continued the exec. “That doesn’t necessarily mean that we won’t build out what we initially planned, but certainly not by the end of this year as we originally planned.”

This is what happens when uncertainty looms: prudence takes the spotlight. 

With Google’s Privacy Sandbox, there are just too many lingering questions for execs to treat it like a sure bet.

Will Google compensate if a Sandbox glitch hits advertisers, publishers, or ad tech vendors in the pocket? Not yet. Can Google provide a clear timeline for phasing out third-party cookies in Chrome? They’re trying, but details are scant. And is Google genuinely committed to addressing Sandbox flaws based on recent feedback? So far, it’s more talk than action.

All these unanswered questions have created a chasm of uncertainty as vast as it is deep.. Until this changes, ad execs are stuck in a loop, constantly reevaluating their stance on the Sandbox.

Here’s how an ad tech boss, who was uncomfortable about speaking about something so sensitive on the record, explained their view on the situation: “I believe that everyone runs it like this because they had funding [from Google]. If they did not get funding then it would’ve been suicide to invest thousands of days of work before final approval from the Competition and Markets Authority. We have always planned to have something ready at some point during the first of next year — maybe earlier — but the real deal could not have been ready in time [by the end of 2024].”

However, don’t read these comments as conceding the Sandbox has been a total waste of time — not yet, anyway. Quite the opposite. This investment has been pivotal for testing, uncovering performance issues, tech hurdles, and areas to refine. It’s also shaped regulatory decisions, affirming the move away from intensive ad tracking. Rather, these remarks simply reflect prudent realism in navigating an evolving product that could face further delays.

“Google has taken the ‘oxygen out of the room’ for over four years with their Privacy Sandbox,” said James Rosewell, founder of the Movement for an Open Web (MOW) — a coalition of anonymous businesses and industry players. “That’s been terrible for privacy as better and more diverse solutions have been starved of investment. Identifiers are used in industries like payments and telecoms very effectively addressing fraud and bring transparency. Solutions that replicate and build on these privacy features can now come forward in digital. The sooner the entire ecosystem signals clearly that Privacy Sandbox does not offer commercial equivalence the better.”

Part of the subtext here is that developing for the Sandbox isn’t exactly pocket change — it can cost upwards of $10 million, depending on the company’s size. And that’s before even considering the opportunity costs. Indeed, creating a Sandbox version of a programmatic bidder or marketplace means pulling resources from the original. Sure, Google’s grants (up to $5 million) help, but they only go so far. 

“Google should be free to waste their shareholder’s money, but that doesn’t give them the right to force others to do the same. Raising rivals’ costs is an abuse of dominance,” said Rosewell. “Google admits to the industry needing to ‘invest’ in their Privacy Sandbox communications.”

Given all this, it’s understandable why so many execs let out a sigh of relief when the third delay to third-party cookies was announced a few weeks ago. It gave them more time to procrastinate, which is just a polished way of saying they can delay making a definitive decision a bit longer.

“I’ve had five engineers working on the Sandbox for the last six months,” said a senior ad tech exec. “That’s a lot of people from my engineering team, which is around 50, who are not able to work on other things.”

That’s the thing about this predicament. If the Sandbox doesn’t come to fruition, then that’s months, maybe even years, worth of work that’s going to be junked. The least ad execs can do to get ahead of this potential twist is to hit pause, take a deep breath, and rethink their game plan before the next curveball sends their efforts into the digital dumpster. 

For now, all they have to go on is this: the Sandbox isn’t ready. Yes, it covers a few use cases, but not very well. That could change, but execs aren’t holding their breath given the mountain of work still needed. And even then, it’s unlikely these alternatives will ever match the effectiveness of third-party cookies. To be fair, that’s less a problem to solve than a hard truth to swallow. After all, Google’s mission to protect consumer privacy meant axing the ad industry’s favorite tracking tricks. In short, ad execs are left with a sandbox full of caveats and barely any sand to play with.

“If this doesn’t work then that’s a lot of money we’ve essentially flushed down the drain,” said the senior ad tech exec.

Google isn’t exactly caught off guard by any of this; it’s all been discussed in closed-door meetings lately. It even has a blog post addressing a lot of these concerns, which it pointed Digiday to when approached for comment. Unsurprisingly,  it’s all about pushing for more testing in the ad world.

And here lies the crux of the matter: before more testing can move forward, there are some hefty questions hanging over the tech and regulatory fronts that need to be cleared up. Right now, it’s anyone’s guess when, or if, this will happen.

https://digiday.com/?p=550375

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : DigiDay – https://digiday.com/marketing/some-ad-tech-vendors-are-pulling-back-from-googles-privacy-sandbox-amid-uncertainty/?utm_campaign=digidaydis&utm_medium=rss&utm_source=general-rss

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