‘Another turn around the merry-go-round’: Ad industry both relieved and frustrated by Google’s extended cookie deadline
Industry experts dive into the factors they believe informed Chrome’s latest delayed cookie deprecation and the fallout it will cause
Aug 01, 2022 04:40:00 AM | Article | Jessica Heygate
Google says its rationale for pushing back its deadline to eliminate third-party cookies in Chrome is to give the industry more time to test alternative solutions – but digital advertising experts believe there’s more going on behind the scenes.
News broke last week that the ad industry would get one more year, until the second half of 2024, to eliminate third-party cookies from their Chrome marketing playbooks. It is the second time Google has moved the goalposts since it announced it would deprecate cookies in Chrome in January 2020.
For many, the delay was expected while Google attempts to untangle a complex set of technical and regulatory challenges.
"These phasing out delays have become pretty commonplace, to the point that—for both the industry and consumers — we'll believe it when we see it," said Jo Hayes, director of data insights and analytics at Barbarian.
Ad experts cited a laundry list of reasons for the delay, including slow progress of Chrome’s Privacy Sandbox solutions—designed to enable advertisers to target and measure consumers without cookies—as well as pressure from struggling advertisers and regulatory probes.
Privacy Sandbox lacks traction
Google launched the Privacy Sandbox initiative in 2019 to encourage a collaborative approach to creating new privacy standards for the open web.
But several proposals that have been put forward, including Topics and Federated Learning of Cohorts (FLoC), have received a lukewarm response from the industry.
Google has also struggled to get a wide enough portion of the industry to test its proposed cookieless solutions—the tech company previously told Campaign engagement in the initiative was muted in Asia-Pacific, for example.
“Google is trying to not just deprecate third-party cookies but replace them with something that could at least come close to preserving the value that they brought to the ecosystem. In order to do this they have to get the rest of the ecosystem to go along with it, test it and validate it,” said Myles Younger, VP go-to-market, data at Media.Monks.
Several digital advertising experts believe Privacy Sandbox’s lack of traction is one of the reasons for the cookie deprecation delay.
Vlad Golinder, SVP group director of martech and data consulting at Havas Media Group said: “I don’t think Google was ready in developing some of the Privacy Sandbox technologies. All of that takes time to develop and get alignment across the industry, so they couldn't yank the third-party cookie knowing some of their technology wasn’t yet ready to deploy at a mass scale.”
“Google’s Privacy Sandbox is yet to be fully tested and vetted as an end-to-end solution providing targeting, frequency management and—most importantly—attribution and measurement. This additional time can be used for more preparation and readiness by both Google and ad tech players,” said Subhag Oak, SVP of product data and intelligence at Amobee.
Jonathan Yantz, managing partner of M&C Saatchi Performance, said: “Google appears to be using this extra time to shore up the alternative solutions they will inevitably introduce, hopefully leading to market-ready solutions when third-party cookies do go away.”
Privacy Sandbox initiatives have attracted low testing partly because Chrome’s origin trials — in which developers test new features on a pool of users — are too small, according to Paul Bannister, chief strategy officer, CafeMedia. Google outlined plans to expand origin trials to a wider range of desktop and mobile users on Wednesday.
The technical complexity of post-cookie solutions makes them difficult for many in the industry to follow, suggested Media.Monks’ Younger. “The R&D effort required to play a meaningful role in Chrome’s process can be a full-time job. A lot of the ecosystem is running into the same challenge of not having enough time to follow it all. There is a high barrier to entry on a time, resource and intellectual basis,” he said.
Reticence to participate in Privacy Sandbox initiatives could also be due to its connectivity limitations. “Google is not the only platform that our clients work with, and Google products don’t necessarily connect to other non-Google products or platforms. A lot of this is further cementing a reliance on Google,” Havas’ Golinder said.
Cookies are “free, neutral, open-source technology that is not owned by any one company,” a situation that is difficult to replicate, said Jeremy Hlavacek, chief commercial officer at Experian Marketing Services. “I think regulators and large tech companies are starting to realize that replacing cookies is not going to be a simple ‘lift and shift,’” he said.
Given its lack of interoperability, it has been suggested that Privacy Sandbox could further entrench Google’s dominance over the ad supply chain, leading to antitrust probes. The UK’s competition regulator launched an investigation into the initiative in January 2021 and continues to supervise its development.
Mounting regulatory pressure was cited by several industry leaders as another factor in the deadline delay.
“Even if Google was ready but the industry was not, that would further cement Google’s dominance in the industry and it might not work out well for the legal community. Google is being cautious, and rightfully so,” said Golinder.
Varying levels of readiness
Several believe the delay was a “responsible step” by Google when many in the ad industry remain woefully unprepared for the shift away from cookies.
“I don’t think the industry as a whole is ready to adapt to some of these changes. There were a lot of commitments based on platforms being built, dollars being committed for certain engagements. It would affect a lot of major retailers and brands in a negative way,” said Golinder.
He added that Google is often “fair” with timelines to give the industry time to adjust to big changes. Apple, by comparison, gave the industry less than a year to prepare for wholesale changes to mobile app tracking on iOS devices.
Yantz said: “Ideally, Google will try to avoid some of the uncertainty the industry saw with Apple’s ATT and SKAN. If delays mean that there is a beneficial privacy-forward solution for consumers, and market-ready solutions are prepared for advertisers, this should be a win-win.”
Some firms are struggling to invest time and resources in post-cookie strategies amid macroeconomic challenges.“Companies that are under short-term revenue pressure due to the economy have been redeploying resources who would have worked on post-cookie tech onto short term projects,” said Bannister.
Industry reaction to the news has been varied, and appears to correlate with post-cookie readiness.
“The reaction is all over the place,” said Bannister. “Some people hate Google and anything they do is viewed suspiciously. Some people are just grateful to have more time. Some people are mad that this keeps getting pushed back. It's hard to generalize anything—I think I've heard every possible response.”
Since many ad tech firms built their businesses around third-party cookie technology, this portion of the industry is expected to be the most relieved.
“They have bought themselves another year to either milk their existing tech stack or migrate to different mechanisms,” said Younger.
Lior Charka, VP product at ad tech firm Outbrain, said the announcement “should come as a relief” given the current macroeconomic environment and its impact on the digital advertising ecosystem.
To the contrary, agencies that Campaign US spoke with are ready to move on.
“I would not characterize our perspective as relief so much as just being resigned to another turn around the merry-go-round,” said Media.Monks’ Younger. “There is definitely a readiness to move on, because on the agency and client side we have had more than two years to work out solutions for this and be proactive.”
“We were hoping Google would rip off the band aid and let the market shake out,” said Golinder. “We have developed our own audience management platform that is designed to take this head on. We thought our tool would be a big differentiator. Now we have a few extra years, which means the competition is going to catch up.”
On the plus side, agencies that have developed tools can spend more time testing them, Golinder said.
Erin Madorsky, chief strategy officer of MiQ, echoed: “The extended time frame specifically affords more time in the arena of measurement, which still has room to develop. Marketers now have more time to acclimate, experiment and perfect approaches for driving campaign success utilizing privacy-centric methods.”
“We're not sensing annoyance from clients and partners. Having a deadline, even a moving one, has motivated a great deal of innovation. I don’t think the progress will dissipate simply because the deadline has been postponed.” she added.
More urgency needed
Others believe that constantly shifting timelines risks stifling progress.
Stephanie Liu, an analyst at Forrester, warned marketers against viewing Google’s decision as a reprieve.
“We saw marketers relax a bit after Google's first postponement and we'll likely see a similar reaction this time around. But marketers must remember data deprecation is bigger than Google alone, and the writing is on the wall that the days of hyper-targeted advertising and tracking users across apps and sites are numbered,” Liu said. “Regulators, non-Google browsers, and consumers are still making moves to protect user privacy, so marketers still need to experiment with tactics that are more privacy-friendly.”
But agency executives said most marketers have decided to continue using third-party cookie-driven tactics right up until they are made redundant.
“It doesn’t mean they are not going to test other things, but they are not going to dump the third-party tech ‘just because,’” said Younger.
“While cookies are here there is no reason not to leverage them and uproot our process from day one,” Golinder said. “However, we should start to deploy in parallel our cookieless solutions so we have a good baseline for testing and comparisons.”
Google has said Chrome will begin eliminating cookies in the second half of 2024, but not having a hard cut-off date reduces the sense of urgency, said Golinder.
“There are a lot of organizations that might need that fire lit under them” he said., “Not having a date creates a lot of ambiguity and work gets put on the back burner.”
“Urgency should not get lost in the messaging,” said Matt Barash, SVP of Americas at Index Exchange. “It’s imperative to continue to drive towards standards and solutions and test aggressively. The problem remains unchanged and acting in the interest of consumer privacy is still paramount. Only the timeline fluctuates.”
Alison Weissbrot contributed to reporting. This article first appeared on CampaignLive.com