Google begins the end of the cookie, and the industry needs to adapt

Following an announcement that it would begin testing tracking protection for 1% of its millions of Google Chrome users, Thursday 4th January is finally the day that Google began to truly kill off the cookie. 

“On January 4, we'll begin testing Tracking Protection, a new feature that limits cross-site tracking by restricting website access to third-party cookies by default. We'll roll this out to 1% of Chrome users globally,” the company explained. 

It called the event “a key milestone in our Privacy Sandbox initiative to phase out third-party cookies for everyone in the second half of 2024, subject to addressing any remaining competition concerns from the UK’s Competition and Markets Authority.”

Why Google’s announcement matters

Quite simply, most advertisers just aren’t ready for the world that comes next. According to research in WARC’s Future of Programmatic Report, nearly three-quarters (73%) of UK marketers are not well prepared for the withdrawal of third-party cookies, while a majority (58%) of global marketing leaders lack a working understanding of how changing privacy regulations will affect their work. So this is big news, which will fire the starting gun on a deep process of adaptation across the online ecosystem. 

What comes next? 

Aside from Google’s Topics, part of the audience-targeting measures that form part of the overall Privacy Sandbox initiative, some advertisers and publishers are taking matters into their own hands:

• First-party data, consented and held by the data controller, is of prominent interest across both advertisers and publishers.
• Attention measurement, which is seeing more and more research backing the idea, is similarly interesting to both parties.
• There is disparity between publisher and advertiser hopes for Google’s Topics. It suggests that advertisers are more sanguine about a one-stop-shop solution than publishers, for whom even more control over their advertising dollars presents a growing concern.

It’s worth noting that for all cookies’ interoperability and relatively democratic nature, they have been deeply flawed for a long time. They are a desktop technology in use during a mobile age, and two-thirds of the devices used to access the internet simply don’t support cookies. 

Despite this, they remain fundamental not only to advertising but also to website analytics at the level of the user. Plenty of new solutions have emerged, but they do require new techniques and skillsets. 

Preparedness 

The extent of preparations is a key concern among marketers. According to Mediaocean’s 2024 Market Outlook report into digital advertising, brands’ preparations for privacy in a cookieless world and effectiveness measurement in this new era are the top concerns cited in the study. 

The timing of the change has sparked anger among trade groups, with the IAB’s CEO Anthony Katsur criticising the eventual ban’s planned launch in late 2024 as a “terrible decision,” in comments to the Wall Street Journal. The same report quotes ad tech providers who perceive in the change the possibility of an even more entrenched Google. Agencies, meanwhile, have found some success with Google’s new technology.

In a statement to WARC, The Trade Desk's UK VP, Phil Duffield, commented: "Removing third-party cookies appears to be just an exercise to position Chrome as a privacy-conscious browser, while attempting to do just enough to avoid the watchful eye of antitrust authorities, while in my view stopping digital advertising from reaching its full potential."

The Competition and Markets Authority question

Observers of the online advertising industry will be aware of the many false starts, delays, and tactical switches that have made up the deprecation of the cookie, not least the competition question asked by UK regulators the CMA, beginning in 2021. In its announcement, Google mentioned the ongoing need to fulfil its commitments to the regulator as a key factor in a global rollout. 

Given concerns that Google’s place at the heart of online advertising could reduce competition in what is already a relatively saturated market, the company has emphasised its commitment to collaboration both to the industry and formally to regulators.

Sourced from Google, WARC, Wall Street Journal, CMA, Mediaocean.

SPT