In a move with broad potential impact on the ad tech industry, Google says it will embrace its own ad targeting and tracking solution, rejecting other industry efforts to replace the third-party cookie.
The decision by the world's largest internet platform complicates the prospects for alternative solutions, including Unified ID 2.0, an identity solution spearheaded by The Trade Desk. Unified 2.0 has found support from a lengthy list of ad tech players who have signed on, such as LiveRamp, Nielsen and Criteo. On Wednesday, Xandr announced that it would work with almost any of the ad targeting products in development across the industry, including Unified ID 2.0. Unified ID 2.0 uses an anonymized database of user browsing habits created through user sign-ins.
Google says its decision is unrelated to other industry efforts and "aligns with our work within the Privacy Sandbox which we announced in 2020," a Google spokesperson said. "We believe advances in aggregation, anonymization, on-device processing, and other privacy-preserving technologies offer a solution for relevant advertising grounded in protecting user privacy—and we encourage the industry to partner with us in developing and adopting them."
David Temkin, director of product management, ads privacy and trust at Google, added in a statement: “Once third-party cookies are phased out, we will not build alternative identifiers to track individuals as they browse the web, nor will we use them in our products." Temkin said solutions provided by other providers will not meet “rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions, and therefore aren’t a sustainable long-term investment.”
“We realize this means other providers may offer a level of user identity for ad tracking across the web that we will not,” said Temkin in the announcement.
Google, of course, remains an advertising behemoth: the company reported fourth quarter ad revenue of $46.20 billion, a 22% increase compared to the same quarter in 2019. Google’s Chrome web browser held more than 60% of browser market share worldwide in February, according to Statcounter.
Google has not yet named a definitive replacement to third party cookies, and says it is working on several potential solutions within its Privacy Sandbox. The Privacy Sandbox is Google's initiative to develop open standards to make the web more private and secure for users, while also supporting publishers. Within the Sandbox, Google's FLoC (Federated Learning of Cohorts) ad targeting technology is leading the pack as a replacement for third-party cookies. Google said FLoC-based cohorts are expected to enter tests with Google Ads advertisers in the second quarter.
Google is vowing to take a more privacy-focused approach to what advertising looks like post-cookie. Instead of relying on personally identifiable information such as email addresses and other markers, its plan is to use aggregate sets of data. In aggregate, it is harder to identify individual users, and could make ad targeting less efficient, Google itself acknowledges in a blog post.
