How publishers can capitalise on Google's cookie reversal

The deprecation of third-party cookies finally fizzled out last month, as Google reversed its stance and instead said that users of its Chrome browser would be prompted to decide whether or not to turn cookies off or on.

For publishers - owners of digital ad space who have long relied on third-party cookies in order to generate dollars by serving targeted advertisements to users - such a reversal helped to maintain a reliable revenue source.

LiveRamp's MD for Asia Pacific, Melanie Hoptman, said that Google's decision doesn’t significantly change the direction of where the industry is headed, however - that of a privacy-first environment where tracking and targeting are concepts of the past.

"The focus remains the same: marketers still aim to reach their audiences effectively through personalised messages, while consumers continue to prioritise their privacy and trust. Thus, advertisers must maintain consumer trust and privacy as core principles, using a combination of cookies and authenticated identifiers as a strategy moving forward," she said.

Hoptman said that LiveRamp, a data connectivity platform, saw the uptake of first-party data strategies among clients in the anticipation of a ‘cookie apocalypse’, but now marketers have the flexibility to evolve by implementing different solutions, with omnichannel "likely near the top of their to-dos".

“Marketers want to reach consumers where they’re spending time, and that’s increasingly on CTV and mobile apps, two of third-party cookies’ most glaring blind spots," she said.

“Furthermore, to address consumers on cookieless browsers - or looking ahead to the future of AI, chatbots and the Internet of Things - marketers need to have strong cookieless strategies to connect and personalise every touchpoint with consumers.”

If and when third-party cookies are eventually deprecated, Google's recent testing of interest-based advertising (IBA) may help to chart a path for the industry.

The giant digital player's ads platforms conducted an experiment in the first quarter of 2023 to understand how interest-based audience solutions perform. These signals included contextual information, the Topics API from the Privacy Sandbox and first-party identifiers such as Publisher Provided IDs.

The research did not compare the performance of third-party cookies to the Topics API alone, but rather a broader suite of signals available in a privacy-first world.

The experiment showed that when using IBA solutions with privacy-preserving signals on the display network, Google Display Ads advertiser spending on IBA fell by 2%-7% compared to third-party-cookie-based results. For conversions per dollar, the decrease was 1%-3%.

Hoptman said that making every consumer experience addressable and measurable will be important for advertisers and marketers, with the third-party cookie remaining a key part of this while Google keeps it alive.

“The advantage that third-party cookies have is that they enable all parts of the ecosystem to power advertising and do business with other stakeholders,” she told AdNews.

“However, every innovation that has been developed following the third-party cookie has been proven to drive better results, while also enabling the personalised, engaging experience that consumers want. To power results using these newer innovations, marketers can benefit immensely by using more than just cookies on their own.”

Index Exchange's regional MD for APAC, Adele Wieser, said Google’s recent reversal will be welcomed by many in the industry, but companies should proceed cautiously until understanding the exact details of the new 'user choice' plan.

"Until we have more details of the exact implementation, it is impossible to know what strategic changes need to be made," she said.

"The new proposal may very well mirror Apple's iOS 'ask app to track' or 'allow tracking' framework which has led to around a 70% reduction in identifier availability. A similar outcome in Chrome could see a similar number of users opting out of sharing third party cookies."

Despite the death of cookies being placed on hold for now, publishers aren't out of the woods yet - the Privacy Act overhaul, speculated to be unveiled by the government in coming weeks, is set to have a transformative impact on the industry.

The IAB CEO Gai Le Roy said the ability of advertising-backed online publishers to provide free content and services could be severely restricted by proposals in the Privacy Act Review Report, as digital advertising, targeting and trading are too broadly scoped and inconsistent with international approaches.

“Data is at the heart of IAB members’ businesses and key to the relationship they have with consumers," said Le Roy.

"We strongly support a modernised privacy framework that is fit for purpose and meets consumers’ expectations – both in terms of protecting their privacy, as well as enabling them to engage in the digital economy. These goals are not mutually exclusive."

Other industry groups are also concerned about the proposed changes to privacy laws. The Australian Association of National Advertisers (AANA) defended the use of targeted advertising, highlighting concerns over potential wide-sweeping proposals by the federal government.