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Reports on the death of third party cookies at the hands of Google have been exaggerated for some time now.
The giant digital platform has finally decided to keep cookies, and give users the decision whether or not to allow them. Apparently, this is the path to protect privacy and personal data.
That means business as usual for marketers after four years of uncertainty, and fears of an advertising apocalypse.
Research by Commerce media company Criteo had showed publisher revenue could fall by an average of 60% post the retirement of third party cookies.
However, many had questioned whether Google would be able to recoup the potential ad revenue cannibalisation with the death of cookies.
The decision also gives Google more time to address key issues that regulators have flagged about Privacy Sandbox, Google’s initiative to replace third-party cookies, (which survives the current decision) including being anti competitive and inadequate privacy disclosures
But the now false trail starting in 2020 to the end of cookies did spur many -- with millions of dollars at stake in ad revenue -- to find alternatives.
Publishers, including News Corp and Nine Entertainment, were given extra incentive to invest big in their own first party data, providing a deeply defined audience well for advertisers to exploit.
However, industry experts warned against being complacent, and to continue the drive to be less reliant on cookies.
“Marketers who strive to use personalisation to improve customer experiences must also adopt a privacy-first approach to earn consumer trust and ultimately win competitive advantage,” said Forrester principal analyst Xiaofeng Wang.
“Marketers should be transparent and granular about data collection and usage and learn to communicate to consumers that the value is not just in free content or free samples but better personalisation, more customised services, and products that ultimately yield better customer experiences."
Google’s move isn’t a saving grace for advertisers and publishers but rather solidifies the industry's need to break its co-dependence with big tech to better align with today’s digital ecosystem, according to The Trade Desk’s ANZ VP James Bayes.
“Amidst all of this, the advertising industry has moved on, realising that the digital world extends beyond Chrome,” he said.
“Today, we are engaged on devices, screens and apps across some of Australia’s fastest-growing cookieless channels including streaming, BVOD and digital audio.
“This has paved the way for far more superior identity solutions that aren’t controlled by big tech, like Unified ID 2.0, which represents a significant upgrade to the internet.
“Whilst Google appears to have finally acknowledged that the best option for them is to give consumers choice, the question remains - will Google really give consumers choice? Or will they make the decision for consumers and then bury consumers' access to change it?”
Google's approach has been criticised from within the industry and beyond, coming under scrutiny of the UK's Competition and Market Authority, the IAB and media agencies, for the last few years, Orange Line data and analytics lead Grace De Cruz said.
“By switching the strategy from removing third-party cookies, to giving users the power to decide; Google may actually be listening to feedback from the ad industry that they haven't fully prepared us for a future without third-party cookies (nor with Privacy Sandbox APIs)."
On the other hand, she says, this may anger data privacy enthusiasts who feel like this is Google choosing to place profit over privacy - a broken promise.
“Once Google provides more details on how these 'additional privacy controls' will work, we'll have a better idea on what this means for us,” De Cruz says.
“In the interim, we continue to keep informed and prepare for further data restrictions, just not how we initially envisioned them.”
ADMA, the Association for Data-Driven Marketing & Advertising, said the industry shouldn’t throw away the good work done in developing a post-cookie strategy.
"There is already a move away from relying on third-party cookie strategies as deprecation has already taken place across other browsers and consumer expectations regarding how their data is used, with consent, in fair and reasonable ways, is becoming the required standard,” said Andrea Martens, CEO, ADMA.
“Those who embed their marketing strategies in these more evolved fundamental principles will be ahead of the curve in this new paradigm."
Google's decision to give consumers more control over their online data settings aligns with the transparency requirements under Australia’s proposed privacy reforms.
Under the new plan, users of Google’s Chrome browser will be prompted to decide whether or not to turn cookies off or on.
"Customers expect to have control over how their data is used, and any move to provide better control should be welcomed by marketers. It is a key factor in building consumer trust in the marketing ecosystem," said Martens at ADMA.
“For marketers, the proposals put forward in the Privacy Sandbox to date have been concerning due to the negative impact they would have on advertising effectiveness and campaign performance, whilst still not meeting privacy laws.
"ADMA is encouraged to see that Google has taken a different approach, rather than dogmatically pursuing a solution that would not benefit either the consumer or the marketer. We look forward to Google engaging with industry as it rolls this out.
“While putting more control into consumers' hands will likely see a reduction in third-party cookie tracking over time, the ability to still use third-party cookies will take some pressure off those who are still heavily reliant on them.”
IAB Australia tech lead Jonas Jaanimagi said Google’s announcement still left questions in terms of execution, consumer opt-in versus opt-out, and the potential impact on volumes of ad campaigns that will require the use of Google's various Privacy Sandbox APIs for competent management and measurement.
“Ultimately the ongoing engagement between Google and the UK's CMA will remain critical on this one - and it’s worth noting the deadline of August 12 for global industry feedback for them to take into consideration,” Jaanimagi told AdNews.
David Kennedy-Cosgrove, managing partner, WiredCo, described the cookie story as a long ride, with an unsurprising ending.
"There’s two sides to this story," he said. "After years of uncertainty, performance marketers will be relieved that it’s business as usual in a data rich world.
“On the other side, for brand marketers, a cookie-less future did present an opportunity to liberate brands from a performance and data addicted world by reaching broader audiences.
"It does leave one question slightly unanswered, if the Cookie Apocalypse was brought in as an answer to privacy - which many other platforms like Apple have run with - and GDPR, then what now? They’ve made some hints about a new experience in Chrome that lets the user choose, but let’s see."
Angela Hampton, founder and managing director, WiredCo, said nothing really changes for her agency.
"It's always been about Brandformance at WiredCo," she said. "We'll continue to focus on wiring the science of performance marketing, with the power of broad reach brand building to help inform, enhance and achieve growth for our clients."
Analytic Partners Australia MD, Paul Sinkinson, said consistent testing has shown that relying on cookie based measurement for planning your media leaves a load of money on the table.
“And you could already be missing more than half the clicks and views anyway due to issues with third party data,” he said.
“It’s been very encouraging to see so many alternative solutions start to emerge, many of which were providing more certainty for marketers, and our hope is that those continue to build and gain traction as cookies continue to fade out, albeit more slowly.
“The message for all marketers is simple: don’t miss this opportunity to put in place the solutions and learnings that will actually improve your performance.
“The biggest benefit of all the work that’s been done over the last four years isn’t about offsetting the harm of cookie loss, but about realising they actually never worked the way many people thought, and you could have been doing better.”
Quantcast commercial director ANZ Daniel O’Connor said all indicators suggest Google struggled to identify a viable solution. However, the advertising landscape has indeed evolved.
“Many businesses have effectively ‘moved on’ from third-party cookies, embracing innovative solutions developed in recent years by companies eager to mitigate the implications of a future without these cookies,” he said.
Consequently, the industry now witnesses a marked reduction in reliance on third-party cookies, which is a positive development.
“These cookies were never designed for advertising purposes and are certainly not a dependable means of measurement in a world where consumer preferences can shift in an instant,” he said.
“The reality is that this announcement does not alter the fact that, in Australia, over 50% of the open web is currently ‘cookieless’. No marketer can afford to overlook such a significant and substantial audience that exists in this landscape.”
Frank Arthur, co-founder at publisher Man of Many, said third-party cookies play a crucial role in the digital advertising ecosystem despite privacy concerns that initially drove Google's move to phase them out.
“For publishers and advertisers, they provide essential data that helps deliver more relevant and personalised content to users,” he said.
“The deprecation of cookies posed a particular disadvantage to independent publishers who do not have the resources to develop complex first-party data systems, so this is a welcome development that helps publishers of all sizes to continue to deliver quality content supported by effective advertising.
“However, it's important that this comes with greater transparency and control for users. Google's promise to introduce new features that allow users to make informed choices is a positive step in balancing privacy with the need for effective advertising.
“As the digital landscape continues to evolve, it will be crucial for all stakeholders to work together to ensure that user trust is maintained while supporting the economic viability of online content."
Joe Frazer, head of digital and co-founder at Half Dome, said Google’s shift shouldn’t mean a lick of difference for any advertiser and if it does, you are already cooked.
“Despite Google's shift, global and local privacy regulations continue to tighten,” he said.
“In Australia, new privacy laws set to be introduced in August 2024 (just two weeks away) will impose stricter data protection standards, focusing heavily on automated decision-making and children's privacy.
“These privacy changes will mean advertisers already need to be thinking about how they better consent, and leverage their own data assets in digital marketing. Yes, there will be a grace period, but acting now is your only feasible option.
“All brands who are reliant on third party cookies still face challenges in reaching Safari and other browser users due to their far more stringent privacy measures.
“This gap needs addressing regardless of Google's opt-in process. More or less, if you haven’t moved yet, you are already missing out.
“Merely promising accurate audience targeting without transparent practices perpetuates the already highly questioned value of data in digital advertising (see Ben Shepherd’s LinkedIn for vigorous but widely accepted debate on this very topic).
“Third party data and cookie based data targeting as a whole is crap – you shouldn’t be reliant on it and you won’t miss it.
“For the industry to maintain credibility, we must prioritise transparency, integrity, and accountability with online data and nothing that involves the ongoing use of third party cookies ticks these boxes.”
James Dixon, chief data officer and partner at Atomic 212°, said marketers are breathing a sigh of relief with one less thing to worry about, at least for now.
“An interesting outcome from three years of cookie speculation is a fresh interest in non-targeted approaches, with a 180 degree turn back to reach over targeting and the principles of Byron Sharp. Google have unintentionally kicked a soft own goal,” he said.
Moritz von Sanden, Audience360 head of sales and member of the IAQBData Council, said Google's decision shouldn’t come as a surprise to anyone who has been following these developments closely.
"Between questions from publishers about the impact on their ability to monetise content, concerns around the technological execution of the privacy sandbox, probes into privacy compliance and not least of all, a few legal enquiries and suits that are probing the anti-competitive outcome that the proposed changes would have - continuing as planned was always going to be a challenge," said von Sanden.
"However, if you read the announcement in the early hours and jumped for joy because there was no longer a need to change the way digital media operates, you may have missed some key points, as changes are still very much required and imminent.
"Whilst details are still to come, in any case, a user opt in/out option in Chrome will likely lead to an effective end of 3rd party cookies.
"Privacy legislation is still going to dramatically change the way we need to operate as an industry and a lack of transparency and willingness to lean into black-box targeting methodologies will continue to drive wastage and create a lack of trust in digital media.
"The calls to action at this pivotal time remain the same as bad data remains bad data. We need total transparency, more accountability and a greater focus on ensuring we take this opportunity to move the digital media industry forward to unlock its full potential as part of the marketing mix."
Ogury CEO Geoffroy Martin said advertising iidentifiers have already been phased out from Safari and Firefox, they are shrinking overtime on Chrome as well, and 50% of traffic on the open internet doesn’t have cookies. As a result, advertisers are already experiencing a decrease in cookie availability for their campaigns, while heightened demand is driving up prices.
“The reality is our industry is at a decisive turning point in the protection of consumer data, and this shift began long before Google made the decision to deploy the Privacy Sandbox," he said.
“With all the above in mind, advertisers should not view Google’s announcement as an opportunity to postpone their move to solutions that are not exclusively relying on 3rd party identifiers. It’s pointless for our industry to cling to a model that is doomed to disappear. Rather, it’s time for advertisers to invest in alternative solutions which allow them to scale independently of future industry decisions, while prioritising consumer privacy.”
The fate of third-party cookies will be as a small part of an ever-expanding array of data points, becoming less relevant over time as more privacy-first, platform-agnostic solutions evolve, Lotame chief revenue officer Chris Hogg said.
"No one that wishes to remain competitive should think they can take their foot off the pedal of first-party data collection and strategic data collaboration.”
According to Mantis MD Fiona Salmon, this latest development benefits the ecosystem by preventing the implementation of inadequate solutions (like FLoC, FLEDGE or Topics), and enabling meaningful conversations with advertisers about embedding contextual advertising and its performance advantages.
“Continuing to implement contextual tools and first party data strategies should be an ongoing priority for advertisers looking to reach their target audiences in an effective way," she said.
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