Google says killing the cookie has consequences
Google, warning that strict privacy measures can limit online publishers' ad revenue, is developing new ways to serve higher-value ads without exposing too much of consumers' personal data in the process.
Google’s Chrome web browser team wrote a blog post today discussing changes in the digital ad industry, especially the recent push to limit web tracking and cookies. In the post Google says it's launching an initiative called "Privacy Sandbox," a collaboration with other industry players to find alternatives to cookies while limiting the fallout to publishers and the rest of the ecosystem.
Cookies are the digital tokens that websites leave on people’s browsers to log information about their whereabouts online. They can inform a website of the type of ad to serve a person, for instance. “Relevant advertising plays a major role in funding the open internet,” says Chetna Bindra, senior product manager of user trust and privacy at Google, in an interview.
To illustrate the point, Google studied how much money is generated from advertising with cookies and without. Publishers’ potential revenue drops 52 percent when cookies are removed from the equation, Google says in its blog post. The ads are less relevant when the publisher can’t make a data connection to the user, so they cost less.
There is a growing backlash against cookies and other forms of online tracking, which has forced major digital platforms like Google, Facebook and Apple to restrict their use. The platforms are responding to the stricter regulatory limits established by the EU’s General Data Protection Regulation and increased scrutiny from U.S. lawmakers.
Apple led the way on anti-tracking over the past two years with its Intelligent Tracking Prevention, that essentially made it impossible to retarget ads in Safari, its web browser. Just this week, Facebook released a long-awaited anti-tracking feature called “off Facebook activity,” which lets users erase data that advertisers give to Facebook to target ads. It’s similar to clearing a web browser of its cookies, making it difficult to personalize the ads afterward. Facebook has warned that it could see revenue declines from less-valuable ads the more people delete their ad data history.
Google has sought a less drastic path than Apple when it comes to killing tracking. Google, most known for search, YouTube, the Chrome browser and Android phones, also operates an ad network that serves 3 million websites and apps. The company generated more than $32 billion in ad revenue last quarter.
At its developer conference in May, Google announced it would implement new safeguards around tracking, giving users more transparency over what sites collected data and more control to prevent data collection.
On Thursday, Google cautioned that some of the focus on cookies was leading to alternate tracking tactics. Advertisers and publishers are finding ways to identify users without relying on cookies, Google said.
“Just talking about cookies isn’t what’s needed,” Bindra says. “We need to think about all the data-collection mechanisms that take place across the ecosystem.”
Google used its blog post to call out “fingerprinting” techniques, which are ways that websites create new methods of identifying people by their devices or the types of fonts they use. “Users cannot clear their fingerprint, and therefore cannot control how their information is collected,” Google said in its blog post.
Google says it just started working on new ways to think about serving targeted ads while maintaining privacy. One method could be to keep consumer data in large enough pools of fellow web users so that individuals maintain anonymity, but also share characteristics that would be useful to advertisers.
Publishers like The Washington Post have already been adjusting to the new realities of online advertising. The company is developing technology to evolve the first-party data it generates from users, relying less on tracking technology and more on the intent of a reader and what goes on within a user’s session on its own site.
“We’re going outside the creepiness of advertising and trying to bridge user experience and ad performance,” says Jarrod Dicker, VP of commercial technology and development at The Washington Post, in an interview.