Why Google's delay of the death of the cookie is dividing the advertising industry

The advertising industry is divided over Google's surprise reprieve for cookies, giving internet advertisers until 2023 to plan for a future without these pervasive web tracking tools. On one hand, major brands and ad agencies are worried that Google's decision to delay blocking cookies exposes the flaws in its strategy and puts advertisers in a tough spot responding to legitimate privacy and data security concerns. On the other hand, many ad tech companies welcome the extra time to test alternatives to cookies. On Thursday, Google made the call that it would slow down its timeline to phase out cookies, which are trackers that websites implant on browsers to build profiles on consumers. While Apple has been stymieing cookies every step of the way, blocking tracking on iPhones and Safari, Google has been more deliberate about how it will evolve, and now says it won't drop cookies until the end of 2023. “I’m pissed. I don’t know if every brand is pissed, but I’m pissed,” says Jonathan Halvorson, VP, consumer experience, Mondeléz. “[Marketers are] losing time. Consumers are losing trust in the industry, so why are we continuing with this?” Halvorson says a harder deadline would force the industry to find a new solution. “I want cookies to deprecate because it will advance other proposals and get things moving. Rolling it back to a later time will keep us in a purgatory of mediocrity.” Luiz Felipe Barros, VP of global media and data center of excellence at Anheuser-Busch InBev, says that Google's delay extends the horizon for a doomed technology that needs replacing. “We’d love to have had a final solution already that can replace third-party cookies that’s privacy compliant and transparent for consumers,” Barros says, adding that Google’s move creates uncertainty for the industry. Brands are eager to move beyond the cookie because they are already developing their next-generation digital advertising strategies. These involve first-party data, which unlike third-party cookies, comes from a direct relationship with the consumers, who presumably consent to sharing their information. There are multiple alternatives for cookies in development, with varying degrees of privacy safeguards. Google had been developing one such alternative called FLoC, or Confederated Learning of Cohorts, which groups consumers into anonymized buckets for mass targeting of ads. Google delayed its phasing out of cookies due to hiccups in FLoC testing, with advertisers pointing out privacy flaws. Advertisers say that Google's FLoC tests were limited and that they were barely able to try it. “There hasn’t been a clear roadmap. There hasn’t been significant testing,” says Ellie Bamford, senior VP and global head of media at R/GA. Bamford says that one of the privacy drawbacks to FLoC seemed to be that internet users could not remove themselves from "cohorts" assigned to them. “Nobody’s even answered whether you can un-FLoC yourself when you’re assigned to a cohort, and that makes people nervous,” Bamford says. “These are all concerns of mine, and they haven’t been tested out.” Several agency executives say Google's mixed signals about ditching cookies and embracing FLoC shows its haphazard approach. In its blog post, Google said it would be more transparent about the testing and rollout of its replacements for the cookie. "We received substantial feedback from the web community during the origin trial for the first version of FLoC," Google said in its announcement on Thursday. "We plan to conclude this origin trial in the coming weeks and incorporate input, before advancing to further ecosystem testing." Google is in a sticky spot as it has to appease regulators, lawmakers, brands, web publishers, ad tech partners and consumers, who are demanding privacy. Google made close to $150 billion in digital ad revenue in 2020, and commands more than 25% of the internet advertising market, according to eMarketer. More than 2 million websites, major media companies and small publishers alike, use Google Ads to manage their ad inventory and sell the space in Google's auctions. Any tweaks to Google's ad technology has widespread implications for all the stakeholders. Ad tech solutions The ad tech industry is busy pushing its own crop of solutions, like LiveRamp’s Authenticated Traffic Solution and The Trade Desk’s Unified ID 2.0. Google's move gave them some padding to proceed. “We appreciate Google’s decision to create more time for the industry to prepare, but the extended deadline does not in any way change or impact Criteo’s strategy,” a Criteo spokesperson said in a statement. “The delay will give stakeholders across the industry more time to scale privacy-conscious approaches to addressability that provide long-lasting benefits,” The Trade Desk wrote in a blog post addressing Google’s decision. Andrew Casale, president and CEO of ad marketplace Index Exchange, was less forgiving of Google. “There’s a need to rip the Band Aid off,” Casale says. “No matter how much of a time extension we gain, nobody will feel ready. But the lack of preparedness right now feels beyond the bare minimum."

Why Google's delay of the death of the cookie is dividing the advertising industry

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