Chrome cookies will start to vanish in early January, when the clock starts counting down to a completely rewired Google ad machine. And many marketers, publishers and ad tech firms still don’t have a clear picture of how internet advertising will look in the aftermath: Will there be effective ad retargeting? Will publishers see a reduction in the value of ads? Will there be measurement and attribution?

“This is not a simple solution,” said one ad tech partner from a demand-side platform that buys internet ads through Google-run auctions. The partner was referring to Google’s post-cookie ad plan, moving away from the internet trackers to a system known broadly as Privacy Sandbox. At the most basic level, Privacy Sandbox establishes a series of APIs, application programming interfaces, that veil consumer internet activity so participants in ad markets can’t decipher personal information about consumers.

The data restrictions mean advertisers and publishers must overhaul their ad technology, which can be pricy and resource-intensive, according to ad tech insiders. There are companies that waited to get involved in Privacy Sandbox, in part, because Google has delayed the proposal before. But now, it seems, Google is really ready to eliminate cookies.

“Google is very serious about this. They’re committed,” a second ad tech partner said, speaking on condition of anonymity, “and I should be more specific, the Chrome team is very serious and committed. The reason it hasn’t gone forward to date is because the proposal wasn’t ready.”

Google’s cookie transition comes with layers of complexity. First, the Chrome team oversees Privacy Sandbox. Chrome has a tremendous footprint, operating on more than 60% of devices worldwide, according to Statista, an internet data site. Separate from Chrome, Google also is the largest internet advertising business in the world and it operates Google Ad Manager for publishers, as well as a demand-side platform for advertisers.

Google is in the middle of an antitrust fight with the U.S. Department of Justice over its role in ad markets, and regulators have alleged it has a 90% market share on the publishing side and an 80% market share on the advertising side. Google must implement Privacy Sandbox in a way that doesn’t raise concerns from publishers and advertisers about favoring its own ad business. U.K.’s Competition and Markets Authority is also watching Privacy Sandbox implementation to ensure that data restrictions don’t stymie businesses that depend on the internet.

Privacy Sandbox will also affect advertising on Chrome on Android devices.

Advanced ad tactics

Google has been taking feedback from all sides of the ad market, and in some cases, has made changes to Privacy Sandbox to accommodate advertisers, according to multiple ad tech executives.

“You can now do an awful lot of advanced advertising tactics in the sandbox,” an executive from a demand-side platform said. For instance, Chrome has made it so advertisers can retarget, say, an ad for a sneaker that a consumer viewed in the previous week. Google’s Protected Audience API enabled it so a demand-side platform could find that consumer on another website, which was a tricky problem for an ad platform built for anonymity. In this case, retargeted ads only get served if there is a group of at least 50 people eligible to see it, hiding identities in crowds of potential consumers online. Google wants to eliminate data slippage through the bid stream, so auction players on the advertising and publishing side can’t reverse engineer a transaction to collect precise signals.

So far, there has only been limited testing of cookieless advertising, because Google only made it possible to simulate advertising in Privacy Sandbox this year. To facilitate real-world experiments, Google committed to a slow rollout, shutting off cookies on 1% of web traffic in the first six months of next year, according to Google’s privacy timeline. Google called this phase of the trials “Mode B.” Then, it plans to fully shutter cookies by the end of 2024. Previously, Google announced that it would turn off 1% of cookies in early 2024. Many ad tech executives, who spoke with Ad Age on the condition of anonymity, said that they thought Chrome could do a slow rollout, gradually increasing the percentage of cookies it deprecates throughout the year. The Mode B phase, with 1% deprecation, is confirmed to at least last for the first half of next year.

Google has been working closely with a select few demand-side platforms on the advertiser side, including RTB House and Criteo, and supply-side platforms on the publisher side, including OpenX and Index Exchange. Other ad tech firms have committed to start testing Privacy Sandbox in January, according to documentation on GitHub, an open-source, software developer site.

Another executive from an ad tech partner from one of the DSPs in the program said that at the very least, “the pipes work.”

“We have really near complete support for our use cases,” this partner said. “We can spend, we can bid, we can buy, we can get clicks, we can get conversions, we can bill, we can pay. We’ve done it end to end without really any showstoppers.”

Auction caution

Publishers and their supply-side ad tech partners have some concerns about Privacy Sandbox. At least seven publishers, including CNN Brasil, Vocento and Globo, are listed as being “interested in testing or early adoption” of Privacy Sandbox, according to GitHub documentation. However, many top supply-side platforms are set to test soon, and those platforms work with large and small publishers.

The main fear is that Privacy Sandbox will be a “black box,” where the auction is controlled by Google Ad Manager inside Chrome. “There definitely is a concern in the industry, because we are starting off fresh with a new kind of system,” said one executive from a supply-side platform. “We want to see if anything can be done so there is a level playing field and there’s no black box inside of Google Ad Manager.”

Publishers want to be able to customize the Protected Audience API. Many publishers use Prebid, which is open-source software that runs ad auctions alongside Google Ad Manager. Prebid gives publishers a source of ad demand outside of Google’s ad pipes. The Protected Audience auctions occur in the browser, where the dynamics could be obscured.

“It doesn’t have to be [Google Ad Manager] that always runs the top-level auction, it can be a third-party like Prebid, which is open source, and Google could participate in that one, publishers would like to see that,” said an executive from a supply-side platform.“Where we have concerns is with the auction, and how much control [Google Ad Manager] has, and how much we are allowed to compete at the same level,” said another publishing executive.

Winning bids

Google insists its demand-side platform, Display and Video 360, has no advantage in Privacy Sandbox. Google’s Chrome team is developing Privacy Sandbox separate from Google’s ad business. “As we’ve said before, Google Ad Manager does not share the bid of any auction participant with any other auction participant prior to completion of the auction, including in multi-seller auctions,” Dan Taylor, Google’s VP of global ads, said in an email. That means Google’s Display and Video 360 won’t have any extra knowledge about the auctions in Privacy Sandbox, compared to other bidders.

“Google Ad Manager runs a fair auction, where the highest bid wins, and Google Protected Audience API demand is not being advantaged over Protected Audience API demand from other sellers,” Taylor said.

Publishers and their SSPs will have to wait until January to truly run Privacy Sandbox through its paces, though, when 1% of cookies are turned off. That's when they can really see what customization is on offer and how to manage their auctions through Protected Audience.

“That’s when partners will see what they’re getting, what their win rates look like, what their bid rates look like, what they’re seeing in the bid requests,” said another publishing executive.

Even figuring out the basic dimensions of the ads will have to be thoroughly tested, multiple ad tech executives said. Publishers will likely start by testing simple display ads, a 300-pixel by 250-pixel rectangle, before considering more advanced units, such as video.

There are potential benefits to Privacy Sandbox, said a second publishing executive. The same technology that guards consumer data will keep publishers’ data from slipping into the bid stream. Publishers have long harbored suspicions in programmatic ad markets because they broadcast data about their readers, which could be used by opportunistic ad retargeting firms to reach those same readers on other sites.

“One of the parties that kind of gets the toughest treatment in the status quo actually are publishers,” the second publishing executive said. “Publisher data has been exploited and harvested by people doing bid harvesting for a really long time. The idea is that all of that information is going to be much more tightly controlled with real technical guarantees.”