July 25, 2024

In a surprising twist, Google has decided not to phase out third-party cookies in its Chrome browser.

In a surprising twist, Google has decided not to phase out third-party cookies in its Chrome browser. Instead, Google is introducing a new experience that empowers users to make informed choices about their web browsing privacy. For more details on Google’s new approach, you can read the official announcement here 

This decision comes after significant feedback from industry stakeholders, regulators, and ongoing technical challenges. Here’s a friendly and comprehensive look at what this means for the future of online advertising and privacy.  

A New Era of User Choice

Google’s new approach is all about giving you, the user, more control. You’ll see a one-time prompt that lets you set your cookie preferences, which you can tweak anytime you want. Anthony Chavez, VP of Privacy Sandbox, mentioned that this change aims to elevate user choice while keeping the balance between privacy and advertising effectiveness. It’s a bit like Apple’s App Tracking Transparency but for your web browsing. 

Privacy Sandbox is Here to Stay

Despite the change in plans for third-party cookies, Google isn’t abandoning its Privacy Sandbox initiative. This suite of tools, including the Topics API and Attribution Reporting API, is designed to enhance privacy while still supporting effective advertising. Plus, Google is rolling out new privacy features, like IP Protection in Chrome’s Incognito mode, to help keep your browsing more anonymous. 

Listening to Feedback

This decision didn’t come out of nowhere. Google has been in constant dialogue with various stakeholders, including the UK’s Competition and Markets Authority (CMA) and the Information Commissioner’s Office (ICO). These regulators had concerns that getting rid of third-party cookies might unfairly boost Google’s dominance in the ad market. So, Google will continue to collaborate with them to refine its Privacy Sandbox and new user choice features. 

Impact on Advertising and Publishing

If you’re in the advertising or publishing business, this news might feel like a rollercoaster. Google’s tests with its Privacy Sandbox tools showed some promising results, like recovering 86% of advertiser spend in DV360 and 89% in Google Display Ads. But not everyone agrees—Criteo’s reports indicated significant revenue drops without third-party cookies. Clearly, the road ahead is still bumpy. 

Impact on Business: From a business lens, Google’s decision to retain third-party cookies while rolling out new user choice mechanisms has several implications: 

  1. More Time to Adapt: Businesses now have a bit of breathing room to transition to alternative data strategies. While the immediate pressure to move away from third-party cookies has eased, it’s still wise to prepare for a future where user privacy is front and center. 

  2. Focus on First-Party Data: Companies should keep investing in their first-party data infrastructures. By gathering data directly from your customers, you can create a sustainable, customer-centric marketing strategy that drives growth and long-term success. First-party data helps you understand your customers better, providing insights that can improve personalization and engagement. It also builds trust with consumers who are increasingly concerned about their privacy. By investing in strong first-party data systems, your business will be better prepared to adapt and thrive no matter what changes come your way. 

  3. Room for Innovation: This period is a golden opportunity to experiment with new data collection and advertising strategies. Tools like Google’s Privacy Sandbox, Conversions API, and other privacy-focused technologies can give businesses an edge and help them stay ahead of the curve. 

  4. Stay Ahead of Regulations: With global privacy laws tightening, staying compliant is crucial. Businesses need to stay vigilant about evolving regulations to avoid penalties and maintain consumer trust. 

  5. Diversify Ad Strategies: Even though Google’s Privacy Sandbox is showing promise, it’s smart to keep a diverse approach to advertising. Exploring alternatives like contextual targeting, Universal IDs, and other privacy-friendly solutions will help ensure that advertising remains effective. 
The Trade Desk’s Take

Over at The Trade Desk (TTD), they’re staying the course with their Unified ID 2.0 (UID2) framework. TTD’s CEO emphasized that UID2 is about more than just replacing cookies. It aims to create a user-centric identity ecosystem across all devices and environments. So even with cookies sticking around, TTD will continue developing UID2 to improve ad targeting in places where cookies don’t work well, like Connected TV and streaming audio. 

General Recommendations and POV

In light of Google’s decision, it’s important to continue focusing on building a strong first-party data strategy and enhancing your tech infrastructure. First-party data, along with tools like Google’s Privacy Sandbox and Gtag, will remain crucial in creating a robust foundation for your advertising efforts now and in the future. 

While the pace of adopting new strategies may adjust, the direction remains clear: continue to innovate and test new methods for data privacy and measurement. It’s vital to stay ahead of potential privacy legislation and evolving consumer expectations. Agencies and their clients should keep moving forward, even if at a different pace, rather than scrapping plans altogether. By doing so, you ensure readiness for future changes and maximize potential returns. 

LinkedIn and Meta's Take on Conversions API

Our LinkedIn and Meta representatives also emphasize the importance of continuing to set up Conversions API (CAPI). Despite the changes, CAPI remains crucial for providing high-quality data and efficient results. According to our LinkedIn rep, “I would still recommend Conversions API because it provides added signal to your current Browser Events, to help provide better quality data and efficient results. With CAPI, you will get more in-depth data about the events that you share, such as more down-funnel signals (i.e., conversion, leads data) that will be helpful to measure performance.” 

The Meta rep echoes this sentiment, highlighting that CAPI is necessary for testing on the Meta platform and for measuring performance through tools like Conversion Lift studies. 

Benefits of Conversions API

The main benefits of using Conversions API include: 

  • Enhanced Data Quality: CAPI allows for the sharing of detailed event data directly from your server, providing more reliable and comprehensive data compared to browser events alone. 
  • Better Performance Measurement: With CAPI, you can track down-funnel events like conversions and leads more accurately, enabling better measurement of campaign performance. 
  • Privacy Compliance: By using server-to-server integration, CAPI helps in maintaining user privacy while still collecting necessary data for ad targeting and performance tracking. 
Exploring Alternatives

Even with Google’s new plan, alternatives to third-party cookies are still in the mix. Think Universal IDs, Data Clean Rooms, and contextual targeting. Google’s Privacy Sandbox will now have to prove its worth against these other solutions. 

Wrapping Up

Google’s decision to keep third-party cookies while enhancing user choice marks a big shift in its privacy strategy. By continuing to develop the Privacy Sandbox and introducing new privacy controls, Google aims to address the needs of both users and advertisers. As this new approach unfolds, it will be essential for everyone to stay engaged and adapt to the changing landscape of online privacy and advertising. 

For more details on Google’s new approach, you can read the official announcement here. 

Sources

Have more questions? Connect with Kat.

Kat Van Biene
Director, Ad Operations

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Blair Naylor
SVP, Global Client Partner

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