Last Thursday, 26th June, Google announced in a blog post that it will be delaying the phase-out of the third-party cookie in Chrome to 2023 to allow more time for discussion with regulators, publishers and advertisers.
The move blindsided both the publishing and advertising industries who have spent the last eighteen months not just battling a global pandemic but also coming to grips with Google’s decision in January 2020 to phase out third-party cookies in their Chrome browser from next year onwards. This decision has now been kicked into the long grass with Google proposing that Chrome could phase out third-party cookies over a three-month period, finishing in late 2023 – essentially a two-year delay.
Dieter Bohn over at The Verge outlines Google’s predicament in no uncertain terms, “The more Google cuts off third-party tracking, the more it harms other advertising companies and potentially increases its own dominance in the ad space. The less Google cuts off tracking, the more likely it is to come under fire for not protecting user privacy. And no matter what it does, it will come under heavy fire from regulators, privacy advocates, advertisers, publishers, and anybody else with any kind of stake in the web.”
In March 2021 the search giant started testing its Federated Learning of Cohorts (FLoC) as a method to replace third-party identifiers. The scheme, which divides internet users into thousands of anonymous groups (cohorts) based on interests and demographics, has received a decidedly lukewarm reaction with Amazon’s decision to block the controversial tracking method earlier this month a sign of which way the tailwinds are blowing.
The main problem for the publishing and advertising industries, however, is that there’s still no industry consensus on the way forward, and there are legal issues to navigate as Google alluded to by adding that its new proposals would be, “Subject to our engagement with the United Kingdom’s Competition and Markets Authority (CMA)”.
So how has the industry reacted to Google’s announcement?
We reached out to a number of executives to gauge wider industry reaction:
CEO and Co-Founder of Quantcast
“Google may have called extra time on the third-party cookie, but brands, agencies, publishers, and technology companies should remain focused on finding a long-term alternative. This will avoid swapping a mad-dash in the second half of 2021 for a mad-dash in the first half of 2023. Post-cookie solutions have value now, regardless of the time extension.”
CEO & Co-founder at Permutive
“There is a heavy fixation on the cookie deprecation date instead of the removal of third-party cookies in Chrome being one milestone among an entire movement towards protecting user privacy…rather than focusing on this one deadline, publishers and advertisers need to look at what’s happening at the macro-level and continue to prepare for data deprecation.“
“Don’t place your reliance on Google coming out with a solution in all this. Cookie-less solutions that scale and meet regulation are already live, and many advertisers are spending heavily here.
Advertisers don’t need to wait for FLoCs; a scalable and privacy-safe solution already exists — and they can test with publishers today.Joe Root, CEO & Co-founder at Permutive
“It’s why there is a privacy-safe solution in advertisers having closer relationships with publishers. Publishers work across 100% of the web and make 100% of the web addressable, and the data is consented and safe — this is the only stable foundation to build on top of in the adtech ecosystem. Advertisers don’t need to wait for FLoCs; a scalable and privacy-safe solution already exists — and they can test with publishers today.
“Advertisers should continue to test Publisher Cohorts — these are cohorts built directly at the source, using publisher first-party data, without the use of individual identifiers. There are already billions of ad impressions being traded every single month on Publisher Cohorts.“
Chief Data Officer at Teads
“While the industry has extra time to prepare for the end of third-party cookies, this is a long journey and the preparation should still continue, we can’t let up. Even with Chrome’s updates being delayed, cookieless data is already a reality with high business impact today. For example over 50% of web traffic in the US is currently cookieless. And the limitations introduced by Apple with IDFA utilization (iOS 14.5) and upcoming IP deprecation (iOS 15) still require an immediate need for privacy-compliant data solutions. This is a positive trend the industry should continue to drive and find solutions for changes in areas such as measurement.”
“FLoCs are only deployed on a really small section of Chrome traffic (-0.5%), which prevents ad-tech players from fully testing it and using it for media activation and campaign optimisation. Without the necessary scale, seeing the true effectiveness of FLoCs was always going to be a challenge.
“Going forward, we expect marketers to pursue their first-party data strategies with relevant online and offline data collection. In that regard, first-party data strategies don’t really change.”
Senior Director of Product Management at Xandr
“The extended timeline gives the industry an opportunity to more thoroughly and calmly consider approaches to addressable advertising. There are various questions about Google’s proposed solutions, concerning feasibility and privacy, that still need to be answered. Rushing any solution that may not address consumer concerns around privacy would be no better than the third-party cookie status quo.”
CTO at Blis
“This is a massive turnaround from Google, but there have been inklings of it emerging over the past few weeks with their statements about following the guidance of the CMA. The additional two years, including the late 2022 phasing, is more of a ‘stay of execution’ than a true respite. Marketers and the whole industry will face another two years of limbo with significant uncertainty over what comes next and how viable it’ll be.
It’s becoming more clear, however, that Google shouldn’t be unilaterally defining the tech to replace third-party cookies.Aaron McKee, CTO at Blis
It’s becoming more clear, however, that Google shouldn’t be unilaterally defining the tech to replace third-party cookies. And the industry still needs to be readying for this privacy-first world that is becoming more of a reality by the day and coming together to create viable solutions that put the consumer first.”
“The dark truth about most third-party data in the programmatic ecosystem is that it’s mostly rubbish. With first-party data, marketers can understand the provenance and quality of what they’re using. This is essential to get good results and a good understanding of audiences. Although Google may have given third-party data a lifeline, regulators have not, and we expect to see significant additions to privacy regulations worldwide over the next few years. First-party data remains a critical asset to help drive strong performance.”
Digital Consultant at Talon
“There was widespread skepticism around the different solutions proposed by Google – and they were always vague. However, most clients and agencies were firmly of the opinion that this would herald the end of micro-targeting (and re-targeting) at scale. Less following people around the web using high levels of frequency with low-quality creatives and more broadcast messaging. Bigger and better advertising. It remains to be seen whether this happens.”
Head of Advertising Strategy, Insight and Marketing at Azerion
“One big problem with the end of the third-party cookie was the overall lack of consensus from the industry on how best to replace them. Clients, publishers, and agencies were presented with a complex array of data solutions, with the waters muddied further by Google’s ban on alternate identifiers back in March. Today’s extension at the very least gives some welcome breathing space – and crucially, protection – to those who depend on an open web. The challenge will be to make sure the extension is spent wisely so that an industry (and Google supported) solution benefits all advertising stakeholders, and consumers alike.”
“Many commentators have expressed concerns that Google wasn’t playing by the same rules it forced on the industry. This came to a head when Google announced it would not support alternate identifier solutions and a consequence of that decision meant the industry moved the magnifying glass on FLOC and the Privacy Sandbox. When interrogated, it became clear that it raised more questions than answers, with holes of mistrust appearing.
“The fact that testing has stalled appears to highlight that Google still doesn’t have the answers to those questions. And there’s surely a whiff of convenience that today’s news has come at a time when the EU recently opened an antitrust probe into Google’s advertising practices.
Google is testing the industry’s patience, though, and trust from marketers and tech companies alike is wearing thin.Paul Lowrey, Head of Advertising Strategy, Insight and Marketing at Azerion
“Let’s be clear, the third-party cookieless future is coming eventually and it would be naïve of the industry to settle back into a third-party cookie comfort zone. Over the last couple of years, great strides have been made to make first-party data strategies and contextual advertising “better”, and that focus can’t go away. Google is testing the industry’s patience, though, and trust from marketers and tech companies alike is wearing thin. The markets bounced on today’s news but only certainty will make it stay that way.”
SVP Addressability and Ecosystem, LiveRamp
“This announcement isn’t a surprise. The combination of recent regulatory investigations, GDPR concerns about FLOCs and the delays in testing Privacy Sandbox proposals suggests that early 2022 would be an unrealistic deadline to withdraw third-party cookies from Chrome browsers.”
“However, the world is already 40% cookieless. So while the deadline for cookie deprecation has extended, urgency persists and the industry should remain committed to moving beyond this identifier. This is simply a delay, not a change in strategy.
“There’s no need to wait until cookies disappear to move to a better solution. Marketers and publishers alike should continue, full steam ahead, towards the cookieless future by tapping into a people-based, authenticated solution.”