Google Reprieves the Third Party Cookie

By Rob Webster, Global VP Strategy

The third party cookie, mostly for the use of advertising was on death row. Already effectively banished from Chrome, Safari and other browsers Googles Chrome was its last bastion. Google had scheduled it to be phased out in the second half of 2023, already a year after it was first promised to have met its maker. Yet last week Google gave it a reprieve till at least the middle of 2024 and perhaps longer. Now that the dust has settled lets consider, is it a good thing, a bad thing or neither. Perhaps more importantly what does it mean for advertisers, publishers, technology firms and the general public.

For Advertisers

Many advertisers will be happy that this stay of execution has happened. It allows them to continue to measure their activity in Chrome. This protects their ability to advertise effectively in Chrome for had the change gone ahead many advertisers would have been exposed as few have an alternative to assigning budgets to cookie measured sales and cookie based audiences ready for prime time. So this has to be said to be a good thing and Google would claim it is protecting many smaller advertisers particularly who would struggle without such arguments.

This “good thing” comes with a huge caveat though. Already cookie based sales and audiences only work on about half of digital media opportunities. Other browsers combined with Chrome with its settings turned up (circa 10pc of ad placements) are blind to such techniques. Worse still this is the richer part of the market and for many brands their core audience mostly lives in this blindspot. Delay or not advertisers need to wake up to the time that they are not doing their jobs if they ignore the gaps in the cookie powered market. So whilst it may be a short term boon I consider this a long term “bad thing” for advertisers as it rewards poor behaviour and buying practice.

For Publishers

Short run for publishers this has to be a good thing as it protects their revenues. Publisher yields are much lower on the cookie free half of devices and users and publishers can scant afford the loss in revenues after a pandemic and in the grip of a recession. Publishers like advertisers have not done nearly enough to get ready for life without cookies.

Here too though I feel it is a long term loss for publishers. For cookie based advertising, broadly, rewards the long tail as much as quality. A switch to a new model will when it happens give quality publishers a larger slice of the pie. It is vital publishers work hard to get ready for this new world, for fear they lose yet more market share to the giants. For many if you cant beat them, join them and many publishers should and will operate walled gardens to protect their data. Publishers like advertisers need to get ready for the new world and use this time wisely. This though is a chat for a different article.

For MAD tech companies

Googles move is a kick in the teeth to the tech companies who have invested most in alternatives to cookies. They (and the progressive advertisers and publishers that used them) would have had a big competetitive advantage had cookies ended on the original timeline at the end of last year. Now these firms risk not being able to benefit from their good work and investment till 2024 or later. Now advertiser and publishers that engage do get the benefit of being able to suceed on safari and other blindspots so engaging with such firms is highly recomended. Yet so far this does not make up for the fact that few of these companies are getting the traction they deserve. Cookies are more powerful than their replacements – but less privacy safe, thats kind of the point. So a company that has cookie technology at the fore still wins today on Chrome (not on Safari). Google should be ashamed of how they have treated such firms with very poor updates on how privacy sandbox is developing and poor comunication.

Ad tech firms who are not yet ready for the change (which are legion) fair much better. So again this move rewards bad behaviour. For these this change is welcome. Ironically a reason given for the delay was to avoid Google gaining a competetive advantage from privacy sandbox. Yet delay or no Googles efforts here have certainly given it a big unfair advantage. For Google decides the when and the how such changes occur. By delaying the change they have beaten off some competition that could have challenged them in the new cookie less world.

The net result is a kind of zombie limbo for tech companies. Those that have cookie based tech will struggle to get investment or exits as their tech is not garuanteed for the future. The new wave is stuck too as they cant with any certainty explain when their technology comes into its own. This is very much to Googles advantage to control this part of ad technology.

For The General Public

This is the biggest “bad thing” of all. The general public have long been wary of data security and privacy for good reason. Yet their personal data, as legalls defined in the third party cookie is now continually at risk and will be for years to come. These third party cookies, personal data that Google (and others) broadcast to thousands of different actors, some of which are malign in nature. Perhaps the irony would be if the public voted with their feet for a differnt browser away from such control.

What Next

All eyes now fall on the European regulator and how they may enforce GDPR more strongly. Updates in the second half of this year to ongoing situations such as The Consent Framework (TCF) case will prove fascinating. Will regulators step in where the tech companies, so far the biggest enforcers of privacy regulation have stepped back (or at least one has, Apple continues to plough a different furough).

All eyes too on advertisers waking up to the fact too that to reach the best users and devices in the world they need a different way of working.

This world moves quickly. Apples moves last year to enhance privacy ultimately ended up knocking stock prices of huge ad platforms. Expect another big update this year from somewhere. One thing seems certain, with the W3C ulimately showing no interest in the privacy sandbox the third partices cookies days are coming to an end.

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