A screeching U-turn, a broken promise, putting profits over privacy?
Google’s shock decision to abandon plans to cancel third-party cookies has taken industry observers by surprise. As cookies track users’ online activity, the move has its vocal detractors and its quieter supporters; but we expect many advertisers and marketers will welcome this news.
For B2B advertisers and marketers, however, new questions arise: What is the future for data retention? Who will the winners and losers be? Has Google’s latest announcement created a false sense of security? After all, users are expected to keep opting out of tracking online, and concerns around consumer privacy will likely remain high on campaigners’ agendas.
A shock announcement
After several years of effort to implement the removal of cookies, with lots of umming and ahhing, it turns out that Google Chrome’s third-party cookies will not be crumbling away…
- Third-party cookies have been a cornerstone of digital marketing, enabling detailed user tracking, personalised advertising, and performance measurement.
- Their deprecation had threatened to disrupt targeted advertising strategies, potentially reducing the value of entire ad campaigns while markedly increasing customer acquisition costs.
- Google’s ‘Privacy Sandbox’, is a proposed set of alternative solutions to third party cookies that they will continue to develop; as third-party cookies may yet decline with users expected to increasingly opt out of tracking.
The decision’s history and regulatory challenges
Back in 2020, Google announced its intention to phase out third-party cookies within two years. But they repeatedly pushed back the timeline; doing so, as recently as April this year. At the time, the tech giant cited regulatory concerns over Google’s Privacy Sandbox, its proposed set of cookie alternatives.
As a near monopoly, with 90% of the search market, Google’s announcements matter. Rival browsers like Mozilla Firefox and Safari, have already begun blocking third-party cookies. But the ad industry was eagerly awaiting Google’s response.
Then, Anthony Chavez, The VP of Google’s Privacy Sandbox, wrote in a blog post, on the 22nd July ‘We are proposing an updated approach that elevates user choice. Instead of deprecating third-party cookies, we would 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.’
Following this announcement, the Competition and Markets Authority (CMA) is widely reported as saying, there were concerns that ‘Google’s Privacy Sandbox proposals could distort competition by causing advertising spend to become even more concentrated on Google’s ecosystem at the expense of its competitors. We will need to carefully consider Google’s new approach.’
In turn, the Information Commissioner’s Office (ICO) said they were disappointed, and cited potential privacy issues and vulnerabilities with Google’s privacy initiative.
A transitional phase
Google say that their proposed cookie alternative – their Privacy Sandbox solutions – will enhance user privacy, while preserving advertising effectiveness. But advertisers and publishers have expressed their doubts and concerns about the likely impacts on advertising campaign performance.
In response, Google pointed to their recent round of testing, which suggests that their Privacy Sandbox APIs can deliver strong results. With an 89% recovery of ad spend in Google Display Ads and an 86% recovery of ad spend in Display & Video 360.
Google also maintains that their same API tech will help mitigate revenue losses from the increasingly anticipated lack of third-party cookies. Google plans to continue refining their Privacy Sandbox technologies, and expects performance to improve over time as the industry adopts the new tech.
Implications for advertising and marketing agencies
Naturally, for advertisers, marketers and brands, the continuation of cookies provides a welcome reprieve.
Now, marketers can continue using cookies while exploring and transitioning to Google’s proposed alternatives. While agencies will be able to maintain their current tracking and targeting practices, ensuring continuity in their ad delivery and performance metrics. However…
Lingering uncertainties
Arguably, Google’s decision risks creating a false sense of security. After all, consumers are increasingly likely to opt-out of tracking, leading to a significant reduction in the number of consumers allowing cookies to report their user data. As this continues to happen, there are increasing concerns for marketers.
Google’s decision to effectively delay the phase out of cookies motivates us as B2B marketers to focus on new ways of collecting and leveraging first party data. For example, through the activation of engaging content campaigns; promoted through paid, earned and shared channels. At The Think Tank, we’re already helping our clients adapt to this significant change. We’re adopting strategies that can build robust databases of relevant direct interactions, and also gather first party data through intentional and contextual targeting. That is to say, we’re boosting engagement and effectiveness by placing ads in front of highly relevant audiences where fitting or suitable content is being consumed.
The future of data collection
Google’s alternative to third-party cookies aims to anonymise user data while still enabling targeted advertising—in essence, it’s a compromise. It offers a transitional phase for advertisers to adapt to new privacy-focused technologies, maintaining the status quo for now. However, it also underscores the ongoing shift toward more privacy-conscious data collection methods marketers, brands, and agencies must use this time to innovate and prepare for a future where consumer privacy is prioritised while still delivering effective digital advertising campaigns.
If you’re looking for help with your next online campaign, reach out to us and let’s discuss your needs.
