Following the announcement that Google has delayed the phaseout of third-party cookies in its Chrome browser until 2024, we take a look at the reasons, potential effects, and industry reactions to the news
We have written extensively about the privacy issues facing the digital advertising industry.
From the shock revelations of the Cambridge Analytica scandal and the introduction of GDPR to Apple’s assault on cross-app tracking and Google’s 2020 announcement that it intended to phase out third-party cookies on its Chrome browser within two years, the days of third-party tracking data have been numbered for some time.
However, despite this seemingly inevitable demise, Google recently announced that it would be delaying the phaseout of third-party cookies on its Chrome browser for the second time in little over a year. The first delay was announced back in June 2021.
So what are the reasons for this additional delay? What does it mean for both advertisers and users? And how is the industry responding?
Why has Google delayed ending third-party cookies in Chrome for the second time?
While privacy and the responsible use of personal data need to be addressed to ensure a safe and transparent internet, we cannot forget the multi-billion-dollar digital advertising industry that has historically relied on third-party data.
Google is the biggest player here, commanding 28.9% of the market. This dominance reportedly generated over $147bn in revenue in 2020, which made up over 80% of parent company Alphabet’s revenue.
Of course, there are countless other bottom lines at stake around the world – and arguably the fate of the entire free internet – which brings us to Google’s reasons for this second delay.
Anthony Chavez, Vice President of Google’s Privacy Sandbox initiative, explained in the recent announcement that the technology that is currently being developed to replace the third-party cookie requires further testing before release.
“The most consistent feedback we’ve received is the need for more time to evaluate and test the new Privacy Sandbox technologies before deprecating third-party cookies in Chrome.
“This deliberate approach to transitioning from third-party cookies ensures that the web can continue to thrive, without relying on cross-site tracking identifiers or covert techniques like fingerprinting,” wrote Chavez.
Admittedly, this does not come as a big surprise for many. With the initial cookie replacement, Federated Learning of Cohorts (FLoC), being met with widespread opposition, Google’s Privacy Sandbox had to go back to the drawing board.
It has since announced a FLoC replacement called Topics, and, more recently, My Ad Center, which aims to give users more control over the ads they see. At the time of writing, both are still in development and testing, with no set date for release.
What does Google’s cookie delay mean for advertisers?
This additional delay to Google’s cookie phaseout may have come as welcome news to some advertisers who have been scrambling to devise an alternative strategy in the face of such a big industry shakeup.
However, experts have warned against complacency, advising advertisers and agencies to continue their work in establishing alternative strategies, such as contextual targeting, with sustained vigor.
In a recent blog post from IAB UK, the industry body for digital advertising, CEO John Mew wrote of the importance of advertisers and agencies using this extension to further strengthen their positions.
“It’s critical that businesses across the supply chain maintain momentum on trialing alternative targeting and measurement strategies,” wrote Mew.
He continued to talk about the opportunities this presents for advertisers, before concluding: “My message is simple: use this time wisely. By being proactive and adopting alternative ways to effectively target and measure campaigns – regardless of this delay – businesses are not only future-proofing their operations, but making sure they are in line with our increasingly privacy-first present.”
What does the delayed cookie phaseout mean for users?
While in the short term this means Chrome users will have to live with third-party cookies for another year, Google has made clear that the extension is for the greater good as it better enables it to achieve the Privacy Sandbox’s overall goals.
“Improving people’s privacy, while giving businesses the tools they need to succeed online, is vital to the future of the open web,” wrote Chavez. “That’s why we started the Privacy Sandbox initiative to collaborate with the ecosystem on developing privacy-preserving alternatives to third-party cookies and other forms of cross-site tracking.”
With many fearing an uplift in historically more nefarious tracking techniques such as browser fingerprinting, Google says its aim is to ensure its technology finds the right balance between privacy and insight.
In Chavez’s words, the delay “aligns with our commitment to the CMA (the UK’s Competition and Markets Authority) to ensure that the Privacy Sandbox provides effective, privacy-preserving technologies and the industry has sufficient time to adopt these new solutions.”
This suggests that while privacy-conscious users may lose in the short term, the longer wait will pay off when the new technology is perfected to provide the optimum experience for all involved.
Besides, with Apple’s Safari and Mozilla’s Firefox browsers both already blocking third-party cookies as standard, concerned users do have alternative options.
What’s the industry reaction to Google’s delayed cookie phaseout?
As we have seen, the IAB UK has advised the industry to keep calm and carry on in the face of this delay, warning that organizations may live to regret any slowdown in preparations for what it feels is the unavoidable exit of the third-party cookie. But others have taken a more cynical view on the delay, saying that Google is simply making hay while the sun shines.
A report from Digiday quoted one anonymous industry professional saying they believe Google’s delays are to please regulators and keep them at bay amid continued scrutiny of its ad tech – not least from the recently introduced Digital Advertising Act in the US.
Another anonymous source opined that the tech giant is prolonging the delay simply because it’s still making money during all the uncertainty and wants to make the most of this revenue stream before it runs dry.
Conclusion
Whatever the outcome and whenever it happens, there’s certainly no harm in ensuring a solid contingency plan is in place. Whether it’s by feeding contextual targeting into an overall strategy or leveraging the power of first-party data, it’s always prudent to be prepared.
As for the reasons behind the holdup? Only Google really knows for sure, but if we see any further delays, many may begin to question whether a cookie can go so stale it simply doesn’t crumble.
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