After four years and several postponements, Google has unexpectedly halted its planned phaseout of third-party cookies within its Chrome browser. Instead of complete removal, the technology giant intends to roll out a new privacy control system, empowering users to make deliberate choices regarding their browsing data. While the specifics are still unclear, it's evident that the push for privacy-centric solutions in the industry will continue.
Current Status: Google's Policy Shift
Google has reversed its decision to eliminate third-party cookies in Chrome. The new approach will implement a system enabling users to manage their privacy settings.
The Privacy Sandbox initiative remains in place, focused on improving online privacy without negatively impacting websites that rely on advertising revenue.
With the 2025 deadline no longer firm, should advertisers halt their efforts or press on with privacy-first strategies? Let's examine the situation.
Understanding Google's Original Cookie Deprecation Plan
Google's long-standing plan was to gradually discontinue third-party cookies in Chrome to enhance user privacy and transform digital advertising. Since its initial announcement in 2020, the plan has faced numerous challenges, including technical issues, regulatory reviews, and industry concerns about viable alternatives.
Google has now altered its strategy. On July 22, 2024, the company officially announced it would not proceed with the planned phaseout of third-party cookies on Chrome.
According to Anthony Chavez, VP Privacy Sandbox:
"Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they'd be able to adjust that choice at any time."
Reasons Behind Google's Decision
Considering Google Chrome's dominant position in the global browser market, accounting for over 67% of users, the deprecation of third-party cookies would have significantly affected the majority of users and advertisers. Consequently, the plan met with resistance from the ad tech sector, which heavily relies on cookie-based tracking, and drew scrutiny from privacy regulators like the UK Competition and Markets Authority (CMA) and the Information Commissioner’s Office (ICO).
CMA Concerns About Privacy Sandbox: The CMA and ICO expressed worries that the Privacy Sandbox could potentially solidify Google's market power, creating an unfair advantage that could negatively impact advertisers, competing ad platforms, publishers, and users. The ICO also identified potential vulnerabilities in the Privacy Sandbox that could compromise user privacy.
What is Privacy Sandbox? The IAB's Perspective
The IAB Tech Lab conducted a six-month evaluation of the Privacy Sandbox, raising significant concerns. They argued that the Privacy Sandbox could impede the industry's capacity to deliver effective advertising and put smaller media companies at a disadvantage. In essence, regarding the functionality of the Privacy Sandbox, the Tech Lab concluded: "No. The Privacy Sandbox initiative, while aimed at bolstering user privacy, introduces significant hurdles for the digital ad economy." (IAB Tech Lab)
Ad Industry Concerns: A study by Epsilon revealed that 70% of advertisers believe that cookie deprecation would impede the progress of digital advertising. Publishers were concerned that reduced targeting capabilities would lower ad premiums and revenue, with research suggesting an 18% decline in ad impression prices without user tracking.
Michael Connolly, CEO of Sonobi, commented:
"Changing out the cookie is like ripping out the roadways in a major city. It will simply take more time to develop a real alternative that maintains a free and open internet, while also serving consumer privacy."
Early Performance Reports: Ad-tech company Criteo reported that publishers could lose approximately 60% of their revenue from Google Chrome if third-party cookies were deprecated and they had to rely solely on Privacy Sandbox. Supply-side platform Index Exchange found that CPM (cost-per-thousand-impressions) decreased by 33% when advertisers utilized Privacy Sandbox.
The Future of Privacy Sandbox
The Privacy Sandbox initiative will continue. Google's testing of the Privacy Sandbox APIs revealed the following:
- Without Privacy Sandbox, removing third-party cookies led to a 34% decrease in programmatic revenue for Google Ad Manager publishers and a 21% decrease for AdSense publishers.
- With Privacy Sandbox, revenue losses were lower: 20% for Ad Manager and 18% for AdSense publishers.
Based on these findings, Google will continue to refine its APIs, expecting improved performance as more companies adopt the Sandbox.
Cookie Deprecation: The Dawn of Privacy-First Marketing
Despite Google's pause, the industry still needs to prepare for a future without third-party cookies. The focus is on identifying superior, privacy-friendly solutions that benefit both users and advertisers. The upside? More time to experiment with new technologies without a looming deadline.
Research indicates that 70% of consumers are blocking cookies online.
First-Party and Zero-Party Data: These data types provide direct insights from the source. First-party data is collected directly from your audience or customers through interactions on your own platforms (e.g., purchase history, sign-ups). Zero-party data is information customers voluntarily share with a brand (e.g., preferences, feedback).
Adobe states that 62% of marketers believe the importance of using first-party data will increase in the coming years. A report by HubSpot found that 73% of customers expect businesses to understand their needs and expectations.
Action Plan:
- Data Collection: Utilize direct customer interactions like loyalty programs, email subscriptions, and surveys. Implement forms and preference centers for collecting zero-party data.
- Data Management: Employ robust CRM systems to manage and leverage first-party data effectively.
- Personalization: Use this data to create personalized and relevant marketing experiences.
- Consent-First Approach: Ensure compliance with data privacy regulations (GDPR, CCPA) by giving users control over their data and obtaining explicit consent.
Contextual Advertising: This approach targets ads based on the content a user is currently viewing, rather than tracking their behavior across websites using cookies. This makes ads relevant to the content, improving user experience and reducing privacy concerns.
A DoubleVerify study notes that 69% of consumers are more likely to look at an ad if it is relevant to the content they are reading. According to the Harris Poll, 79% of consumers are more comfortable seeing contextual ads than behavioral ads.
Action Plan:
- Content Adaptation: Use content themes and keywords for ad placements. For example, display ads for sports equipment if a user is reading an article on fitness.
- AI-Driven Targeting: Utilize AI and machine learning to improve content and context understanding, enabling more effective ad matching.
- Privacy Compliance: Ensure contextual targeting strategies respect user privacy and do not collect personal data. Contextual advertising can be effective without third-party cookies.
Data Clean Rooms: These provide a secure environment for multiple parties to collaborate on aggregated, anonymized data without exposing raw user information. This enables precise audience insights while ensuring compliance with privacy laws.
90% of B2C marketers report using a data clean room for marketing use cases. An IAB report indicates that 64% of companies using privacy-preserving technologies are utilizing data clean rooms.
Action Plan:
- Provider Selection: Choose a clean room provider (e.g., Google Ads Data Hub, InfoSum) based on data-sharing needs and partners.
- Security Setup: Establish governance and technical infrastructure, including access controls, data policies, and encryption.
- Pilot and Scale: Begin with a pilot program with one partner, measure results, and scale based on learnings.
Identity Resolution: This process connects data from various sources (like email addresses, device IDs) to create a unified customer profile without relying on cookies.
According to eMarketer, 60% of marketers plan to use identity resolution to replace cookie-based targeting. In one study, 81% of brands claimed a deep understanding of their customers, but only 46% of customers agreed.
Action Plan:
- Customer Data Platforms (CDPs): Invest in a CDP to aggregate first-party data from multiple touchpoints to build a single customer profile.
- Cross-Device Tracking: Use deterministic methods (email addresses, phone numbers) to track customers across devices without relying on cookies.
Google Topics: As part of Google's Privacy Sandbox, this privacy-focused approach allows advertisers to target users based on broad topics of interest rather than individual browsing behavior. It categorizes interests and assigns users topics based on their online activity.
Researchers found that the Topics API could potentially fingerprint 60% of users across websites after just three observations. Apple has raised concerns about the Topics API, highlighting risks like widespread data access and potential for broader profiling.
Action Plan:
- Ongoing Testing: Test and integrate Google Topics into advertising campaigns.
- Optimizing for Intent: Focus on creating content relevant to the topics Google categorizes to effectively meet user intent.
Server-Side Tagging: This solution shifts data collection and processing from the user's browser to a secure server controlled by the business. While it doesn't replace third-party cookies, it enhances the secure collection and processing of first-party data.
A Google case study showed that financial services company Square improved conversion tracking by 46% after adopting server-side tagging.
Action Plan:
- Server Solution: Select a scalable server-side tagging platform (e.g., Google Tag Manager Server-Side) and migrate client-side tags.
- Testing and Optimization: Verify data accuracy, improve conversion tracking, and monitor performance.
- ROI Tracking: Evaluate improvements in conversion tracking accuracy and overall performance compared to client-side tagging.
Consent Management in a Cookieless Environment: With the increasing focus on privacy, cookie consent is crucial. Instead of forced tracking, the emphasis should be on building user trust through transparency and value-driven data collection. Marketers should:
- Implement clear, user-friendly consent banners without manipulative designs.
- Integrate with Google's Consent Mode and IAB TCF for privacy-compliant ad measurement.
- Respect users' privacy settings like Do Not Track (DNT) and Global Privacy Control (GPC) by automatically honoring opt-out signals.
Conclusion
While Google's policy reversal maintains the current state of affairs, marketers understand that embracing privacy-focused strategies is not a temporary trend but the future. Companies that have already adopted cookieless solutions are seeing positive results, reporting not only improved campaign performance but also reduced reliance on third-party data. By leveraging first-party data and exploring alternative tracking methods, marketers can uphold user privacy while maintaining effective marketing efforts.
FAQ on Google Cookie Deprecation
Is Google deprecating cookies?
Google has abandoned its plan to phase out third-party cookies in Chrome. Instead, the company will introduce a new system allowing users to choose their tracking preferences across Google’s search products. This decision follows significant opposition from the digital advertising sector and regulatory scrutiny. Google had initially planned to phase out third-party cookies for all Chrome users by early 2025, with gradual restrictions starting in 2024. However, in July 2024, the company reversed its decision.
Is Google still removing cookies?
Google has shifted its approach regarding third-party cookies. Initially, Google planned to phase them out entirely by 2025, but it has since dropped this plan. Instead, Google is moving towards giving users more control over their tracking preferences through new systems, such as the Privacy Sandbox, which aims to reduce the reliance on third-party cookies while still enabling personalised ads. The full phase-out of third-party cookies is no longer a part of Google’s immediate plans, but they continue to experiment with and promote privacy-focused technologies such as the Privacy Sandbox.
What are some alternative tracking methods for marketers?
Here are some alternative tracking methods for marketers:
- First-party data: Data collected directly from users through interactions such as website visits, purchases, or sign-ups.
- Zero-party data: Data explicitly provided by users, such as preferences, interests, or feedback through surveys or preference centres.
- Contextual advertising: Ads are targeted based on the content a user is viewing, rather than their browsing behaviour or past interactions.
- Identity resolution: Combining data from multiple sources (e.g., website visits, and social media interactions) to create a unified customer profile across devices and platforms.
- Google Topics: A privacy-focused method where users are grouped into interest categories based on browsing behaviour, allowing for interest-based ad targeting without tracking individual users.
- Server-side tagging: Collects and processes data on the server, bypassing client-side restrictions like ad blockers or cookie-blocking features in browsers.