Google is delaying the deprecation of third-party cookies until mid-2023. Vinay Goel, Chrome’s privacy engineering director, said in a blog post that while there is considerable progress with the Privacy Sandbox initiative and its plan to phase out support for third-party cookies, “it has become clear that more time is needed across the ecosystem to get this right”.
The move to phase out third-party cookies was first announced last year and the initial timeline was set for 2022. In March this year, Google said it will not build alternate identifiers to track individuals as they browse across the web once third-party cookies are phased out. Meanwhile, Google has also touted that its Federated Learning of Cohorts proposal “ can provide an effective replacement signal for third-party cookies”.
According to Goel, the deprecation of third-party cookies on Chrome’s part will come in two stages, and subject to its engagement with the UK’s Competition and Markets Authority. The first stage begins in late 2022 once testing is complete and APIs are launched in Chrome.
In stage one, publishers and the ad industry will have time to migrate their services. Goel said Chrome expects this stage to last for nine months and will monitor adoption and feedback carefully before moving to phase out third-party cookies in stage two. Stage two will commence mid-2023 and last for three months concluding in late 2023.
To allow for the web community to collaborate and develop a set of open standards to enhance web privacy, Goel said Chrome needs to “move at a responsible pace” to allow sufficient time for public discussion on the right solutions. He added that sufficient time should also be allocated for continued engagement with regulators and for publishers and the ad industry to migrate their services. “This is important to avoid jeopardising the business model of many web publishers which support freely available content,” he added.
The latest announcement coincides with the conclusion of a recent probe by the UK’s Competition and Markets Authority on whether the deprecation of third-party cookies will impact competition in the online ad industry. The UK competition watchdog previously investigated whether this move will lead to advertisers focusing their spending on Google’s online ad tools “at the expense of its competitors”, Wall Street Journal said. Google said on 11 June that it would give the Competition and Markets Authority at least 60 days notice before removing cookies to review, and potentially put in place changes concerning any plan, WSJ added. On a broader level, the company has also been pulled into an anti-trust probe by the European Union for allegations that it abuses its role in the adtech sector” and favoured its own display adtech services, multiple reports including the WSJ and CNBC said.
Immediate market reactions
Following Google’s announcement, CNBC reported that adtech players saw a rise in their stocks. Shares for The Trade Desk closed up 16%, while PubMatic’s was up 13% at closing time. Criteo’s shares closed up 12%, while Magnite and LiveRamp each closed up nearly 10% and 6% respectively, CNBC reported.
Criteo’s spokesperson told MARKETING-INTERACTIVE that it welcomes the news and appreciates Google’s decision to create more time for the industry to prepare. “However the extended deadline does not in any way change or impact Criteo’s strategy,” the spokesperson said, adding that it continues to build products that will enable its customers to reach and engage their audiences without third-party identifiers. This includes investment in its first-party media network, cohort-based targeting, initiatives in Google’s Privacy Sandbox, and contextual advertising.
Andrew Burke, Outbrain’s MD, APAC and growth markets, said in a Linkedin post that the delay will be welcome news for many advertisers struggling to change legacy marketing strategies. The extra time will also be well spent fine-tuning one’s strategies.
Meanwhile, Andy Monfried, CEO of Lotame, said:
Cooler heads seemed to have prevailed at Google to delay the sunset of third-party cookies rather than jamming through unproven, siloed proposals that favour the few but harm the vast majority.
"If only Apple took the same hint. We look forward to continuing to work with the industry and Google to create growth and value for all on an equal playing field," he added.
Not a two-year delay but an active industry engagement
Nonetheless, this does not mean that the industry will have to wait for the next 24 months and watch Google launch the new Privacy Sandbox through another blog, Gowthaman Ragothaman, founder and CEO of Aqilliz, said. “It is now an active industry and regulatory engagement starting now for the next two years,” he added.
Ragothaman said he is glad to see a plan where there is time for the industry to jointly transition to the world beyond cookies, instead of having a cliff moment. This helps in setting some benchmarks, do some proper A/B testing for six to nine months and then transition. “This is a responsible response from Google. At the same time, its alternative in the form of FLoC failed to gain acceptance and meet compliance. Cohorts needs to codified by the industry for the industry,” he explained.
Marketers should take this golden opportunity to focus on establishing proper universal measurement standards. Long-tail publishers get a lifeline.
In fact, Ragothaman said both marketers and publishers should use this time to establish direct relationship with their consumers.
Similarly, MediaCom Malaysia MD, Saurabh Chandrashekhar, said marketers and publishers should not take their foot off the accelerator. Marketers need to constantly push for attribution and go beyond last-touch to multi-touch. According to him, doing so would push publishers to evaluate as many tech solutions available or need to be created in order to form new ID solutions.
On the publisher front, Chandrashekhar said they will need to continue understanding their own audiences and creating their own ID solutions. Publishers that have already done so include Bloomberg Media , Mediacorp , South China Morning Post , and The Washington Post . Meanwhile, Astro Media Solutions in Malaysia also has various solutions based on different platforms such as TV subscription and digital subscription.
“[Astro], for example, will obviously continue to create those identity solutions and use this additional time to test the solutions with advertisers, execute real campaigns and ensure all the results are ready. Eighteen months is a good time to create all that,” he explained.
Nonetheless, he said the impact of change when it comes to the deprecation of third-party cookies “is not massive”. “As the rebalance between brand building spending and performance marketing spending continues to happen in favour of long-term demand creation, it is very likely that this whole topic about sharp targeting is going to be affecting 20% of the ad spend,” Chandrashekhar explained.
In light of this, Chandrashekhar said Google must have realised that the stakes are not as high as of right now because publishers are not ready and so is the technology as well as the regulation. Hence, instead of scrambling towards phasing out third-party cookies, Google decided it would be better to let everyone take their time and get ready for the change.
At the same time, this also happens to be a year in which companies are not ready to invest. The reason being, while several unified ID solutions have been created to help lead the industry forward into a cookie-less world, Chandrashekhar explained that plenty of internal investment in technology is still required on the publishers’ part. “In a year where everyone has bled, you have to scramble to create new technology and incur that cost. Why would anyone do it?” he said.
Despite this, since plenty of time and investment has gone into building actual tech to support a cookie-less world, Chandrashekhar said the investments should still not be looked at as a waste and should continue.
Reiterating the importance of first-party data
The extended timeline reiterates the need to build their own first-party data and leverage first-party datasets to better measure and compare ad performance across all channels in real-time, Mitch Waters, SVP of Southeast Asia, Australia and New Zealand at The Trade Desk, said. According to him, this is critical as consumers are increasingly spending their time on the thriving open internet which includes OTT video streaming, audio streaming and on mobile apps.
Publishers that are looking to maintain user privacy while empowering advertisers to make the most of their first-party should continue to pursue identity solutions beyond cookies, he added. In preparation for a cookie-less world, The Trade Desk created the Unified ID 2.0 and has received support from other firms in the industry including Nielsen, PubMatic, Xandr, Tubi, Magnite, Criteo and LiveRamp. Unified ID 2.0 aims to enable mobile app companies and marketers around the globe to better understand their audiences across platforms in a simple way, while giving consumers better, more personalised digital experiences.
Echoing this sentiment about first-party data was Adobe's Southeast Asia MD, Simon Dale, who said the shift from third-party cookies towards first-party data puts consumers in control of how their data is used, while companies can deliver real-time experiences that are most relevant to consumers.
Like the other industry players, Dale said Google's delay gives brands more time but won't change the trend. "First party data is the future of brand-consumer relationships built on trust—not just for advertising, but for all digital experiences," he added.
Also weighing in on the conversation was Rakuten Advertising's APAC SVP, Stuart McLennan, who said marketers need to include server-side integration, which are not affected as of yet, in their tracking technologies. They also need strong first-party data strategies in place and must continually upgrade their tracking technologies, both for efficiency and security purposes.
Additionally, with the loss of personalisation, marketers should begin thinking about new ways to reach consumers, as consumers themselves continue to have more control over how their behaviour and data are being used by marketers, McLennan said. Though marketers cannot target every individual consumer specifically, he added that there are many ways brands can still connect with their most loyal consumers.
For example, through improving the customer experience so users are encouraged to opt-in to tracking. Affiliate is another way to reach consumers, he said. "Affiliate technology such as post-transaction referral codes or live commerce also helps performance marketers personalise and target consumers through partners and their own data. Brands can work with select publishers that share similar audiences to their existing customers. This will go a long way in the collection of first-party data," McLennan explained.
Meanwhile, the chatter around a cookie-less future has also brought about the importance of context in marketing strategies. Integral Ad Science's CMO, Tony Marlow, said brands should test, learn, and ensure their strategy matches their brand values.
"Based on the past few months, a significant shift from audience-based targeting to contextual targeting is already well underway. More advertisers and publishers are integrating contextual strategies to optimise their digital media quality, especially as the focus on consumer privacy increases. This week’s news should be a call to action for every marketer and publisher to consider how they can make every impression count," he added.
Can the industry achieve a standardised Unified ID solution?
In addition to The Trade Desk's Unified ID 2.0, Verizon Media also has its own unified identity solution , Verizon Media ConnectID. With alternatives available in the market, marketers might be unsure of which unified ID solution best fits them. MediaCom Malaysia's Chandrashekhar said there needs to be a common language or code based on the solutions created. "Are these solutions created based on user consent? Or are they still created based on inferred data or is it data moderated from multiple signals with some consent? That has to be consistent across all solutions before choices are made to consider which one suits best," he explained.
The next consideration is the scale of the solution itself followed by its applicability across multiple platforms. Chandrashekhar said it cannot be a case where a particular solution is only applicable to a news organisation, for example, and therefore only works on display media. According to him, the solutions should be interoperable and work as well for a video or OTT publisher as it does for a news publisher. "Most importantly, the solutions should work in a very publisher agnostic way. It cannot be that every publisher has their own solution built on a different language and principles," he said.
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