Google faces new pressure to delay cookie demise—breaking down the IAB Tech Lab report

Google’s Privacy Sandbox, which represents an ad tech overhaul of the entire web, received a public takedown from a contingent of industry players concerned about how the platform could break the internet’s business model. IAB Tech Lab, the influential ad trade organization, released a report on Tuesday claiming a litany of shortcomings with Privacy Sandbox. IAB Tech Lab scrutinized dozens of Google’s new ad protocols that change parts of the ad tech ecosystem that are vital for publishers and advertisers. The report looks at Privacy Sandbox’s effects on measurement and attribution, shifting ad auction dynamics and the heavy technological lift imposed on companies to build for the new ecosystem. Also read: Google responds to ad tech critics over cookie timeline Privacy Sandbox is an ambitious platform developed by Google’s Chrome team to remake programmatic advertising without third-party cookies and other trackers that follow people’s online footprints. Google wants to sunset third-party cookies by the end of the year, but IAB Tech Lab questions that timeline. “The industry needs more time,” Anthony Katsur, CEO of IAB Tech Lab, told Ad Age following the release of the report. Check out the latest Ad Age events and award programs Google responded by saying IAB Tech Lab misunderstood how parts of Privacy Sandbox work. Privacy Sandbox is based on APIs—application programming interfaces—that move ad auctions directly into the Chrome browser, preventing personal data from leaking to participants in the marketplace. The problem for publishers and advertisers is that some of that data also is useful to their operations. “We always welcome input from the industry, however, IAB Tech Lab’s report includes dozens of fundamental errors, inaccuracies and instances of incomplete information,” a Google spokesperson said in an email. Google has been steadfast it is meeting its cookie goal and it reiterated that on Tuesday. “We continue to move forward with our plans to phase out third-party cookies in H2 2024, subject to addressing any remaining competition concerns from the UK CMA,” the spokesperson said in a statement. “We are confident the industry can make the transition in 2024.” Google’s project represents a massive change for internet advertising, affecting publishers, ad tech vendors on the supply and demand sides, and advertisers. Google’s proposal changes how marketers will measure ads, target audiences and manage their internet ad campaigns. It also changes how publishers engage with online auctions and load their websites with ads. Given Google’s dominance as an internet advertising business, the company is being watched by regulators, including the U.K.’s Competition and Markets Authority, which is overseeing how Privacy Sandbox affects businesses that depend on the open web. Some in the industry appear sympathetic to Google’s plight as it conducts a balancing act between maintaining advertising on the open web and preserving privacy. Google has been locked in a technological debate about advertising, and it has been critical of some alternative solutions it claims basically reinvent cookies along with their privacy problems. “Everyone wants to criticize Sandbox, and it’s clearly a work in progress,” said Brian Lesser, CEO of InfoSum, a data clean room firm. “But nobody else is proposing solutions that work without cookies or a cookie substitute.” Here are some key points raised by IAB Tech Lab: Attribution and reporting “All of advertising keys off of attribution,” Katsur said, adding that Privacy Sandbox, and its Attribution Reporting API, limit advertisers’ ability to run routine ad operations. For instance, the IAB Tech Lab claimed Privacy Sandbox doesn’t support attribution on cost-per-action ads, which are ads intended to drive a website click or a sale. The advertiser pays “per action.” Google’s APIs use a technique to inject “noise” into data to hide personal information within faked signals. That will make it impossible to accurately attribute cost-per-action ads, Katsur said. IAB Tech Lab lists a handful of billing metrics and attribution techniques that would either be degraded or only “temporarily supported” under Google’s proposal. Ad formats There also are concerns about the types of ads that publishers could run through Privacy Sandbox. For instance, the current infrastructure “severely degrades” the ability to run video ads, according to IAB Tech Lab experts. “It’s a pretty big change from how publishers do digital video today,” Katsur said. “It’s nontrivial.” The same applies to native ad units, which are ads that are customized to each publisher’s website to fit in with the content. “As of right now when we looked at use cases, rendering native ads is not supported,” Katsur said, In a “frequently asked questions” post on its site, Google touched on some of the points raised by IAB Tech Lab, including native and video ads. Google said that ad sellers could use already established ad standards to move native and video ads through Privacy Sandbox’s Protected Audience API. Also read: A guide to Google’s post-cookie ad tech Double bidding Advertisers worry about inefficiencies in bidding on ads in the Protected Audience API, including bidding against themselves for the same ad impression, according to IAB Tech Lab. The IAB Tech Lab explained it like this: In Privacy Sandbox, advertisers bid on “interest groups,” comprised of consumers associated with certain traits. An advertiser could wind up bidding on the same impression multiple times, because it detected multiple interest groups that overlap with its intended audience. The limited insights into the auction dynamics also put frequency capping at risk, tracking how often an ad was served, and restrict advertisers’ ability to pace and budget campaigns, according to IAB Tech Lab. Cloud questions Another question the tech group had about Google’s plans revolved around cloud services. Much of Privacy Sandbox development involves making changes to how ad tech companies interact with the Chrome browser. But there are cloud services that need to be deployed for some advanced advertising tasks in what Google calls Trusted Execution Environments. IAB Tech Lab criticized Google for only certifying Google Cloud and Amazon Web Services as trusted partners. “The requirement to require a [Trusted Execution Environment], while simultaneously restricting TEEs to only Google and Amazon, ensures that a duopoly can dictate commercial terms,” the IAB Tech Lab report said, “a setup highly unlikely to result in competitive pricing.” Google said in its FAQ this week that it is open to working with the industry on cloud proposals. “We expect to support other cloud providers in the future,” Google said.

Google faces new pressure to delay cookie demise—breaking down the IAB Tech Lab report

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