Tinuiti's Experts Weigh In On Google's Third-Party Cookie Decision
The phasing out of third-party cookies, which are used for tracking user activity across different sites, was first announced by Google in 2020. Since then, there have been numerous delays (as recently as April 2024) and widespread uncertainty about the future of a world sans third-party cookies and what this truly meant for advertisers… until now.
What Happened?
Back in May 2024, Google’s Privacy Sandbox Proposal and plan to deprecate third-party cookies within Chrome had hit a major roadblock in the form of a report from UK Competition & Markets Authority. At the time, Google stated they were still committed to moving forward with their proposal, albeit absent of any firm timeline. Despite the original announcement of their plans, now, almost 5 years later, Google has shifted gears.
On July 22, 2024, Google announced they are adjusting course on their original plans and ditching the third-party cookie deprecation initiative. In a blog post released by Google, Anthony Chavez, VP of Privacy Sandbox, noted that Google is “proposing an updated approach that elevates user choice. 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.”
Tinuiti’s EVP of Innovation and Growth, Simon Poulton, and Senior Director of Innovation & Growth, Brian Binder, sit down to discuss their takes on the announcement and the real impact for advertisers in the video below.
At the core of this announcement is not that Google will not be deprecating third-party cookies, rather, that they are shifting the burden to the user and will provide the option to opt-out of third-party cookies (which will likely function as a proxy opt-in for the Topics API targeting). This is not too dissimilar from Apple’s approach to App Tracking Transparency several years ago where users were provided with a prompt in apps. At the time, this resulted in mass-opt outs, and depending on how Google approaches the option to opt-out within Chrome, we may see something similar here. Poulton notes that this news “will likely lead to the death of third-party cookies as consumers will inevitably opt-out.”
It’s currently not clear when this opt-out feature will roll out or how this new feature will work within Chrome, but Chavez shared that they are “discussing this new path with regulators, and will engage with the industry as we roll this out.”
Michelle Merklin, VP of Paid Search Innovation & Growth at Tinuiti, and former Googler, shared that she wasn’t shocked to see this development from Google as they “have been doubling down on privacy and durability topics for a while now, and this pivot essentially just transitions the onus from Google to the end user who will have to proactively opt out of tracking if that’s what they want. In general, people do want privacy controls and choices, but I’m curious to see how many actively take the step to opt-out.”
Kolin Kleveno, SVP, Head of Partnerships at Tinuiti suggests that “Google is taking the safe route by addressing ad tech complaints that raised concerns about potential anti-competitive outcomes of Privacy Sandbox. By giving consumers the power, Google can seemingly remain neutral. This is a “have your cake and eat it” moment for Google. But it prolongs the inertia that this industry has been in since Google first announced the deprecation of third-party cookies. Clients still need to take action and move towards more durable solutions to futureproof data collection and measurement.”
Privacy Sandbox Impact
Google’s announcement hones in on the importance of still having privacy-preserving alternatives and noted that the Privacy Sandbox, an open-source initiative by Google that aims to protect user privacy online while providing tools for developers and companies to build digital businesses, isn’t going anywhere.
Key elements in the Privacy Sandbox that are coming into play include the Protected Audiences API for Remarketing and the Topics API for Contextual Targeting. Early tests reveal challenges in latency and accuracy, which have led to up to a 33% decrease in CPM, impacting publisher revenue. Stakeholders are working to address these issues while navigating evolving privacy regulations.
In the latest Google announcement, Chavez goes on to say that Google will “continue to make the Privacy Sandbox APIs available and invest in them to further improve privacy and utility. We also intend to offer additional privacy controls, so we plan to introduce IP Protection into Chrome’s Incognito mode.”
Advertising Impact
While this announcement may come as a surprise to some, it’s important to remember that we’re already living in a post-third-party cookie world as both Safari & Firefox eliminated 3P cookies several years ago. Simon Poulton, EVP, Innovation & Growth at Tinuiti, encourages advertisers to “remain calm, continue to diversify media types and realize that this change doesn’t mean 3P cookies won’t go away. They will, just on a slower timeline and likely without a “cliff” cutover moment that was somewhat inevitable with the hard landing timelines that Google was presenting.”
Future-Proof Your Privacy and Measurement Strategy
So does this mean the scramble to find privacy alternatives was all for nothing? The short answer is, no. Josh Brisco, Managing Director, Growth Portfolio, and Michelle Merklin, VP of Paid Search Innovation & Growth at Tinuiti highlight the importance of future-proofing your measurement strategies and underscore how privacy will continue to be a theme in the world of performance marketing for years to come…
“In terms of advertiser impacts, yes the shorter-term impact will be less stark with an opt-out approach vs. complete deprecation, but the long-term challenges to cookie & cookie-like measurement remain. As such, our strong recommendation is that advertisers continue to invest in the upgrading of their measurement infrastructure & approach in signal-durable ways, to ensure the ability to continue running optimized performance media programs. Advertisers should not let this shift make them complacent in the pursuit of future-proofing their measurement and activation strategies, as privacy-centricity will continue to be a pervasive theme in the world of performance marketing.”
Josh Brisco Managing Director, Growth Portfolio at Tinuiti
“From an advertising perspective, Google’s guidance isn’t changing. They’ve recommended we embrace the innovations of new privacy-preserving technologies, continue leveraging AI-powered solutions, and build stronger connections with your customers with first-party data. To me, this indicates we need to continue empowering our advertisers to be as future-ready as possible (ie: Enhanced Conversions).”
Michelle Merklin VP of Paid Search Innovation & Growth at Tinuiti
Continue to Diversify Your Media Mix
Continuing to invest in durability involves developing a diverse inventory strategy across various media platforms. Embracing robust ID technologies like UID 2.0 is crucial, alongside adopting a mindset of “minimum viable data” beyond traditional cookie-based identifiers.
It’s important to recognize that the decline of third-party cookies does not stall the progress of Privacy Enhancing Technologies (PETs). Notably, the absence of third-party cookies does not affect tracking or advertising performance on Search, Social, or other enclosed platforms. So, while this shift is significant, advertisers predominantly utilizing Google, Meta, or Amazon platforms would not see any impact from third-party cookie deprecation anyway.
Conclusion
Google’s decision to pivot its third-party cookie deprecation plan marks a significant turning point in the digital advertising landscape. While this move might temporarily alleviate concerns for advertisers grappling with the complexities of a future without third-party cookies, it’s crucial to recognize that this is not a permanent reprieve.
The industry’s journey towards privacy-centric solutions remains essential. Advertisers should continue investing in first-party data strategies, exploring alternative identifiers, and embracing privacy-enhancing technologies. Diversifying media channels and building robust measurement frameworks should also be top-of-mind moving forward.
Ultimately, while Google’s decision to prioritize user choice over cookie elimination might delay the inevitable shift, it underscores the urgent need for the advertising ecosystem to adapt to a privacy-first world. By proactively preparing for a future with reduced reliance on third-party data, advertisers can position themselves for long-term success.
Interested in learning more about durable measurement and targeting solutions? Have questions about Google’s recent announcement? Contact us today to learn more.
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