Google’s decision to again postpone the end of third-party cookies sent sighs rather than shockwaves through the advertising industry.
Following competition concerns by a UK regulator, Google’s plans by the end of 2024 to have killed off cookies, which are used by digital advertisers to track users, looks unlikely to progress beyond the 1% of users of Chrome who had their third-party cookies disabled back in January.
Publishers and adtechs said that while a delay may have been somewhat expected, the upside to the postponement helps to firm up advertiser strategies on what they can do in the meantime as they prepare for the inevitable.
GumGum’s GM of JAPAC, Niall Hogan, said advertisers should be focusing on finding future-proof, privacy-first solutions that they can start working with today and rely on into the future.
“At present, less than half of the market can be targeted using third party cookies,” he said.
“Some marketers think they now have another year while smart marketers are making, or have already made, strategic moves to counteract the need for third party cookies to effectively reach their target consumer.”
CEO and co-founder at Prophet, Jordan Taylor-Bartels, said that the further delay should indeed be seen as an opportunity to be proactive and fine-tune marketing strategies for what’s ahead.
"To avoid Google ‘grading its own homework’ in a cookieless future, keeping track of what advertising ran where and on what dates is key. It doesn’t hurt to keep an onsite log either to enable data science," he said.
'Leveraging something like data science will be extremely important for filling in conversion data when the time comes for cookies to finally end. At the very least, marketers should be enabling the capability to use open-source MMM tools by moving their ad spend data in-house and overlaying it with revenue."
Taylor-Bartels said that while Google will continue to operate with its ‘Privacy Sandbox’ tools, the death of the cookie will harm the ability of any multi-touch attribution solution to provide independent estimates of ROI.
"Likewise, Google’s plans for a complete shutdown of Universal Analytics services and APIs on July 1st will kill years worth of data history that could enable cookieless proactive modelling," he said.
"However, with all this in mind, cookie-based attribution methods are strongly biased in favour of late funnel search activity. To get an accurate and unbiased picture of ROI, a minimum requirement is to separate the ad vendor from the evaluation process."
Yahoo’s director of data and insights for AUSEA, Dan Richardson, said that when Chrome’s third-party cookie deprecation started in January, it was "incredibly worrying" to see how many brands and agencies were caught not having trialled and understood third-party cookie alternatives.
“Businesses failing to do this run the real risk of being left without the right partner when Google does eventually eliminate the cookie solution once and for all,” he told AdNews.
Magnite’s SVP of product management, Garrett McGrath, said that designing a system like Privacy Sandbox is incredibly complex and Magnite applauds the work that has gone into it on Google's part so far.
“That said, in addition to the concerns noted by the [UK’s] Competition and Markets Authority, large functionality gaps remain, any one of which on its own could be considered a viable reason to extend the deprecation date. In addition to the product deficiencies, the impact to publisher revenue is unknown and the industry was simply not ready, given the large lift and unknowns,” he said.
InfoSum’s GM for ANZ Richard Knott that with over 50% of digital environments already being third-party cookieless, and the rest still on their way out, this shouldn’t be a reason for the industry to put a hold on their plans.
“Pausing any post-cookie strategies would be a mistake,” he told AdNews.
“Organisations should seize this extra window of opportunity to refine and test their strategies, focusing on building robust first-party data assets to explore data collaboration opportunities that enhance data value and efficacy, and prioritise consumer privacy.”
Knott said that for marketers, it is critical to continue spending with online publishers to support a free and open web, and they should also capitalise on emerging media platforms that offer authenticated, addressable audiences.
“Retail media, gaming, CTV, and streaming audio are already incredible opportunities to reach engaged consumers. As digital-first platforms continue to dominate consumer behaviour, innovation and preparation is essential to avoid being caught unprepared when changes ultimately occur,” he said.
Nine and Seven focusing on first-party data and innovation
Nine's chief sales officer, Michael Stephenson, said that the pushback of third party cookies from Google wasn't unexpected in light of the UK regulator's recent decision.
“However, Nine has been employing a number of different strategies to mitigate any reliance on third party cookies, and we are building out our first party data strategy as the cornerstone of Nine's digital capabilities,” he said.
Seven chief digital officer Gereurd Roberts said that Seven was surprised by the delay, especially after January’s announcement to phase out 1% of Chrome browser traffic, which was the clearest statement of intent from Google.
“All the messaging had pointed to this happening by the end of the year, which we were certainly ready for,” he told AdNews.
Roberts said that the impact on publishers will depend on how they choose to utilise the extra time provided.
“Those who use it to innovate and adapt may emerge stronger in the long term, while others may face greater challenges,” he said.
“Ultimately publishers should experiment with new technologies and move their strategies to those that improve user experience, engagement and monetisation, all in the absence of third-party cookies.”
Act sooner
The Association for Data-driven Marketing and Advertising (ADMA) director of regulatory and advocacy, Sarla Fernando, said that the wording in the report by the CMA gave some hints to a possible delay on the horizon.
The report confirmed that Google had met their commitments but also mentioned Google’s inability to proceed with cookie deprecation until the CMA’s concerns were resolved. It also mentioned the 60–120-day standstill period, after Google notifies the CMA of its intention to implement their removal, which Fernando said combined with feedback requested, meant that it was always possible that full deprecation in 2024 would be "tight".
“That said though, this date isn’t a key focus of ADMA’s,” she said.
“Businesses that are focussing their ‘go forward’ strategies on the date of actual deprecation are doing themselves a disservice. Reliance on third party cookies is already changing and alternative options are already available to test and adopt.
Fernando said that marketers should try to understand the privacy enhancing technology that may be compliant beyond first party data.
“There is a lot to be considered and actioned – and none of that work needs to wait for an actual date of either cookie deprecation or privacy act reforms. Every brand and size of business will need to prepare themselves for these inevitable changes – why wait when there are best practice principles that can be adopted now?” she said.
Impact on publishers
Meltwater’s marketing director for Asia Pacific, Upali Dasgupta, said the delay in the depreciation of third-party cookies will give publishers the opportunity to implement systems to capture first-party data and deploy tools such as media intelligence and social listening.
“This will allow them to extend their understanding of audience preferences and tailor their content thanks to real-time data insights,” Dasgupta told AdNews.
GumGum’s Hogan said that the delay will mean the forward-thinking publishers have even more time to perfect their third party cookieless tech, and others now have more time.
“Really, we are all still in the exact same place — preparing for a privacy-first digital advertising landscape that doesn't involve cookies and IDs. I think this just delays the inevitable,” he said.
Fernando said that ADMA’s experience is that many publishers have already begun implementing identity solutions in anticipation for the sun going down on third party cookies, with many proactively testing identity tools with data privacy being their key motivator and the shifting landscape of cookies being only a component of that bigger picture.
“Each business has its own priorities, whether that is maximising loyalty, prospecting, or any of the other important goals they may be developing data strategies towards. Forward thinking businesses are already investing in further education, experimentation and effective infrastructures to enhance their digital advertising options beyond the cookie,” she said.
“In fact, in some ways, the publishers have been more proactive than some marketers who have, unfortunately, been driven by the date announcements of these changes rather than accepting that the changes are inevitable and they would be better off preparing themselves now. It is likely their competition is!”
Agencies
Yahoo's Richardson said that while it's clear change is needed and phasing out of third party cookies will be a net positive for the industry, eliminating them before agreed solutions are in place would have been damaging for agencies.
"Clearly more testing is needed. The recent IAB Tech Lab Privacy Sandbox Fit-Gap Report, shows that of the 45 use-cases submitted - all of which are critical for programmatic advertising - 23 are currently not supported by the Privacy Sandbox initiatives," he said.
Dasgupta said that agencies have a great opportunity to focus on strengthening their offering by casting their net wider as cookies are representative of a limited set of consumers.
"That could include building their expertise in first-party data analytics, deploying specialist social listening and media intelligence tools, using audience segmentation, and privacy-compliant targeting methods, as well as actively exploring influencer marketing that allow them to understand and analyse audience behaviour, ultimately enhancing their audience engagement and therefore their competitiveness," said Dasgupta.
"The introduction of models like algorithmic attribution would also allow them to improve their understanding of which channels, activities, and messages are generating the highest return in the absence of cookies.
"Those agencies that get on the front foot with these different approaches will be able to position themselves favourably to navigate the transition away from third-party cookies and emerge stronger and more resilient in the long term."
Hogan said that agencies are already preparing for a third party cookieless world, organising their own and clients’ data strategies and identifying suppliers with future-proof privacy-first solutions.
"This will continue to develop and speed up over the coming months. Everyone claims to have the best cookieless solution, so it will be interesting to see where agencies place their bets and I think that we can expect to see a lot more technical RFIs, as agencies start to scrutinise everyone’s targeting claims," he said.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.