Google No Longer Deprecating Third-Party Cookies

Facing mounting pressure from all sides of the advertising ecosystem, Google's Plan to Ban Third-Party Cookies Crumbles After several delays, Google began testing its new Tracking Protection feature on January 4, 2024. The goal was to restrict website access to third-party cookies by default, initially affecting just one percent of Chrome users worldwide, approximately 30 million people. Google planned to eliminate cookies for all Chrome users by the end of the year. However, less than eight months later, Google abandoned this plan.

The main reason for phasing out cookies was to enhance user privacy. Instead of taking an all-or-nothing approach, Google announced on Monday, July 22, 2024, that they would no longer deprecate cookies. Instead, they are introducing a "new experience in Chrome" that allows users to choose and adjust their cookie settings at any time. While the specific privacy measures are not yet clear, they are expected to be similar to Apple's App Tracking Transparency controls.

The Importance of this Announcement

Google's choice to maintain third-party cookies allows advertisers to continue campaigns without disruption. While presenting a prompt to Chrome's billions of users is less drastic than altering the default settings, it could still significantly decrease the number of users permitting third-party tracking. As such, adaptability and compliance with privacy standards will remain vital for advertisers.

Ensuring user privacy while maintaining data accuracy is central to our data strategy. Although this approach is fragmented, data interoperability across platforms and signals will help us create a more streamlined and targeted strategy. Audience quality measures and outcomes will remain the key factors in evaluating the effectiveness of our approach, and this will not change with Google’s recent decision.

Why did Google change its approach to deprecating third-party cookies?

According to Google, they realized that the transition required substantial effort from numerous stakeholders and would significantly impact publishers, advertisers, and everyone involved in online advertising (including Klick and our clients). Feedback from various stakeholders, most notably the UK’s Competition and Markets Authority (CMA), highlighted concerns and challenges related to this deprecation. Ad Industry Pressure: Advertisers and publishers heavily rely on third-party cookies for targeted advertising, audience segmentation, and measurement. With over 65% of web browsing being performed on Chrome, the discontinuation would have disrupted established practices and workflows within the advertising industry. Publishers, in particular, have faced challenges dedicating resources to Privacy Sandbox testing.

The CMA was concerned about Google favoring its own ad tech providers and ad inventory. An additional, more significant concern arising from initial testing is the presence of latency issues and a potential loss in ad revenue.

Competitive Landscape: The CMA noted that Privacy Sandbox could give Google an unfair advantage over other ad tech platforms and publishers, potentially harming advertisers, users, and competitors. For example, Google could benefit from granular profiling and targeting tools while limiting rivals' access to the same data. Meanwhile, Google's competitors were developing alternative tracking methods that could potentially bypass Google's restrictions on third-party cookies. This competitive pressure likely influenced Google's decision to maintain a level playing field.

Privacy Concerns and Regulation: While Google emphasized its commitment to user privacy through initiatives like Privacy Sandbox, removing third-party cookies without a suitable alternative raised concerns about unintended consequences and potential regulatory scrutiny. The CMA also expressed concerns about imposing unfair terms on Chrome users. By maintaining third-party cookies for now, Google can continue to work on privacy-preserving alternatives while minimizing disruption.

Adoption Challenges: Transitioning away from third-party cookies requires widespread adoption of new technologies and standards across the industry. While Privacy Sandbox has shown promising results, it has only been tested by 1% of Google’s audience. Google may have determined that the timeline and readiness of this alternative is not yet sufficient to meet the needs of advertisers and publishers without causing significant disruption. Additionally, the CMA has expressed concerns about unequal access to user tracking functionality.

Preparing You for an Uncertain Future

The good news is that Klick’s programmatic team has been proactively developing a variety of data strategies for the past few years in anticipation of cookie deprecation. Following the July 22 announcement, we will continue our test-and-learn approach, focusing on contextual targeting, cookie-less audience models, and exploring alternative identifiers.

By leveraging your programmatic leads' and managers' expertise and partnership, you can ensure readiness and adaptability for a future without third-party cookies, regardless of Google's next steps. Reach out to prepare for what’s next. No matter what it is, we’ve got you covered.