Why Google's cookie confusion is splitting the ad industry

Google’s not-so-shocking move to postpone killing cookies in Chrome has divided the ad industry, yet again, with advocates of a post-cookie web saying, “let the cookie go already.” Other stakeholders in the complex ad tech landscape are giving Google a pass, asserting that the industry is not ready for such drastic changes without longer preparation, and especially during an economic downturn. On Wednesday, Google changed its post-cookie timeline, marking the second time the company pushed back the date to shutter third-party cookies in Chrome. Google now says third-party cookies will go away in the second half of 2024. Last year, Google had set the termination date in late 2023, and before that Google signaled it would be ready to ditch cookies by 2022. Google’s plan to replace cookies is clearly facing more difficulties than the company initially expected, and this new delay is just the latest sign that its privacy-enhanced roadmap is a bit of a mess, according to ad tech industry insiders. “This is about Google finding a way to balance how they maximize revenue while minimizing privacy implications,” said Mark Pearlstein, chief revenue officer of Permutive, a next-generation publisher and advertising platform. “The challenge is they are four years into this initiative, so it’s logical to wonder how high a priority this really is for them.” Google has to walk a fine line because it is such a dominant player in browsers and ad tech, raising complicated competitive questions any time it makes a change. Apple, for instance, implemented Intelligent Tracking Prevention in 2020, basically banishing cookies from its popular Safari browser on iPhones and Macs. Google, however, has had to consult with regulators like U.K.’s Competition and Markets Authority, to make sure it doesn’t make any changes to Chrome and the ad tech ecosystem that would unfairly benefit Google’s own ad fortunes while harming independent publishers and ad tech vendors. Ad Age Small Agency Awards See all of the 2022 winners Click here Google's broader approach Google’s plan to deprecate cookies is just one part of its planned overhaul of online advertising. Google has also been working on what it dubbed Privacy Sandbox, which applies to Chrome and Android devices. In both cases, Google is trying to develop new application programming interfaces—APIs—which could be used by other players in ad tech. The principle is basically that Google would share aggregated data points, which can’t be tied to an individual user, but still publishers of websites would see basic general interests of the web visitors. Those general interest “topics” could be used to target ads, instead of cookies. Google’s Privacy Sandbox Topics API is currently in “origin trials,” or limited tests, and Google said it would generally be available late next year. That is if it even works. “The whole premise of Privacy Sandbox is junk,” said one ad tech executive, who works with publishers and spoke on condition of anonymity. Google has garnered some sympathy, though, because of how complex a challenge it could be to rearrange the entire ad tech ecosystem. “We expected [the delay] to happen,” said Matt Barash, senior VP of Americas at Index Exchange, the programmatic ad tech firm. “We think that ultimately there’s a sense of responsibility here and that Google is acting responsibly.” One major factor to consider is the broader economy, Barash said. A year ago, when Google was preparing to turn off cookies, the macro economy was performing better. For a long time, companies that underpin the personalized ads business have argued that robust access to data helps businesses grow. Facebook owner Meta, for instance, has long argued that Apple’s singular focus on anonymizing data on iPhones and the web would make it more difficult for marketers to keep growing. Now, facing an economic downturn, those warnings could hold more weight and could factor into decisions such as whether to totally ditch online cookies. “The cookie is still alive and relevant and used universally,” Barash said. Mathieu Roche, CEO of ID5, the London-based identity advertising firm, is skeptical that Google even cares about killing cookies in the name of privacy, or helping the industry come up with alternatives. When Google postponed cookie deprecation this week, the company cited its ongoing work with U.K.’s CMA. “It gives [Google] a good reason to delay,” Roche said. To say, “It’s not our fault anymore.” Roche said the “confusion is beneficial to Google,” because in the meantime it continues to be the dominant player in ad tech, with or without cookies. 'The time is now' Cookies have been the backbone of the digital, programmatic ad industry for years; they are files that publishers and ad tech vendors drop on consumers’ web browsers to build profiles about their behavior for easy, real-time ad targeting. Cookies have come to embody everything wrong with loose data policies that track everything a person does online, often without permission. The real-time bidding online ad auctions, backed by cookies, have sparked a number of regulations from the U.S. to the EU, trying to give consumers more control over how their data is collected and shared. “Regardless of the timeline Google has set, 45%-plus of the internet is already cookieless,” said Travis Clinger, senior VP of addressability and ecosystem at marketing platform LiveRamp, “mobile in-app is cookieless, and CTV is cookieless. The time is now for publishers and marketers to control their destiny and transition away from cookie-based identity.” In the meantime, Google is working with regulators like the CMA to show it has a practical path to implement new privacy rules for internet advertising, and that it is working with stakeholders to make sure they understand the changes. Part of the reason for this week’s delay was to give stakeholders more time to prepare. In fact, on Thursday, the CMA issued a progress report on Google’s post-cookie plans, but it was vague. ”We are not necessarily able to provide all the details that some stakeholders may want,” the CMA said about its analysis of Google’s systems. “We have tried to be as transparent as possible within these constraints.” Lukasz Olejnik, an independent privacy researcher and consultant, said that one aspect of the CMA’s work with Google is potentially non-transparent. The CMA’s latest report outlines a new process for oversight, but Olejnik said that questions still remained about the role of a “trustee-tech” expert. “The process of trustee-tech expert now looks rather unclear,” Olejnik said. “Specifically, if the chosen trustee model is seen by Google or CMA as inadequate (and it seems it is, hence the current changes), then why did they decide on it in the first place? This is at best unclear. ” ~ ~ ~CORRECTION: A previous version of this story mischaracterized statements made by Lukasz Olejnik, an independent privacy researcher and consultant. Olejnik’s comment has been updated. Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here

Why Google's cookie confusion is splitting the ad industry

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