In July 2022, Google announced that they will be delaying the deprecation of third-party cookies in Chrome for another year and intend to discontinue them in Q3 2024 instead. Google had initially planned to phase third-party data out by 2023 making this the second time plans have changed for the tech giant.
This second extension is attributed to feedback Google has received after completing a trial with developers, publishers, and advertisers, suggesting more time to evaluate and test their Privacy Sandbox Initiative is required. Moreover, 39% of marketers are not confident, confused, or worried about the viability of emerging cookieless identity solutions. The Privacy Sandbox is Google’s approach to moving away from third-party data, ensuring that the digital world can continue to thrive without relying on cross-site tracking. Simply put, it aims to be a more discreet method of delivering targeted advertising. From this month onwards, the trial is set to roll out further to millions of users globally.
The Impact of the Cookie Deprecation Delay on Ad Tech
The impact of Google’s delay of the deprecation of third-party cookies has both a positive and negative impact on members of the ad tech community.
Positive Impact
Web browsers such as Safari and Firefox who made the decision to block the tracking of third-party cookies to appeal to privacy-conscious users in 2022 will hugely benefit from this delay by Google. Although this may not have a severe impact on Chrome who accounts for 67.1% of the worldwide internet browser market share for desktops. The delay will, however, allow these players to strengthen their grip on such privacy-conscious customers.
It goes without saying that this delay also benefits early adopters of cookieless solutions. It will enable businesses to fine-tune their data strategies in order to protect their advertising revenue and demonstrate efficacy in comparison to previous cookie-based indicators. Those that take advantage of the delay, may be able to avoid cookies entirely before the deadline, which would be optimal for enhancing their data strategies.
Negative Impact
On the other hand, advertisers who have not yet adopted a cookieless solution may be negatively impacted by this delay. Without having a data strategy or alternative solution to third-party cookies in place, it will cause major disruption to advertisers. For example, they will no longer be able to create detailed audiences required for targeted campaigns or possibly limit their ability to redirect traffic to their website in the form of retargeting ads.
The delay may also negatively impact businesses who sell cookieless solutions as the postponing of the deadline may make it more difficult to pitch these solutions to advertisers who have continually procrastinated adopting a cookieless data strategy.
As Google takes this stride toward privacy, the demise of third-party cookies will have a big impact on the advertising industry. Google will gather data and use it to target advertisements. It will not, however, allow third-party cookies to collect data and sell web adverts tailored to specific users’ browsing habits. This implies that, while raw data such as conversions would be available, the advertiser’s unique data points used for targeting will be lost. As a result of this, advertisers must re-evaluate what they can do to prepare for Chrome’s cookie deprecation despite it being delayed.
What Advertisers Can Do Now
Unfortunately, there are many unknowns with a cookie-free future. However, with this delay, it is advised that advertisers and marketers should consider their options and devise a new strategy to avoid disruption. The demise of third-party cookies allows brands to take the initiative to offer customers a trustworthy and transparent experience. Below are three options that are available to them:
1. Discover new audience sources
Google recently announced the termination of their Federated Learning of Cohorts (FloC) project, which was intended to replace third-party data. Instead, they will launch Google Topics, their new approach to interest-based advertising in the Privacy Sandbox. The goal of this program is to capture knowledge and feedback from the first FloC tests. The Topics algorithm allocates each user’s preferences from a library of over 300 possible topics, for example, “Books & Literature” or “Auto & Vehicles”.
This data gathered from Topics will only be kept for three weeks before being terminated. This backs Google’s claims that this will be a more transparent solution and less vulnerable to privacy violations. However, it is still unknown how this approach will be used to customize advertisements. It is important to note that similar ‘clean’ third-party audiences are likely to develop between now and late 2024.
2. Enhance first-party data
It is extremely important that advertisers implement strong first-party data collecting processes to target and tailor campaigns for individuals who have previously interacted with their business. They should also ensure that all data gathered is compliant with all relevant legislation. Firms should also effectively communicate with their users about what information is being gathered and its intended use. Consent-based collected data is no longer just a legal and regulatory requirement; it is also a means for companies to build trust with their customers.
Moreover, some publishers and marketers are developing their own first-party data frameworks. For example, the New York Times, a renowned publisher, has launched their own advertising data program for their direct-sold ad business, which uses their own first-party data and data science methodologies.
3. Examine “walled gardens”
A walled garden is a closed system in which the platform provider has complete control over the content, media, and applications. They can limit access as it deems necessary in order to create a monopoly.
With Google aiming to phase out the usage of third-party cookies in its Chrome browser, advertisers are increasingly looking for granular audience data from other sources to maintain ad targeting precision. As publishers and advertisers have authenticated audience data that they collect each time a person signs on to access their material, they are in a great position to establish their own versions of walled gardens.
Conclusion
Third-party cookie depreciation has been a trending topic across the advertising industry since Google’s initial announcement, with publishers and advertisers both fearing for a cookieless future. As the likelihood of a cookie-free world fast approaches, the ad tech community must focus on investing in solutions and developing first-party data strategies that would combine the process of data collection with consent and privacy, to ensure they are maintaining trust with users.
As Google continues to expand their testing from now until 2024. This means that advertisers will have to wait longer and should take advantage of the extra time to alter their advertising tactics to target Chrome users.
Although it is still unclear how advertisers will be affected by Chrome’s deprecation of third-party cookies, or how effective the Privacy Sandbox will be at targeting customers, more information will become available as the test is expanded throughout the year.
