In what many saw as a shock announcement, last week, Google confirmed it was delaying the demise of third-party cookies in its Chrome browser. As third-party cookies are already blocked by Firefox and Safari, some people may wonder what all the fuss is about. The issue lies with the dominance of Google, and its Chrome browser, which has a global market share of almost 65%.
As you can imagine, many AdTech platforms and publishers have welcomed the news, as they now have additional time to get to grips with the new technologies that will need to be developed to fill the void left by web browser providers making steps to protect the privacy of their users. In the wake of the announcement, AdTech stocks soared, demonstrating just how damaging this shift to a more private browsing experience will be to the industry.
Why are third-party cookies such a big deal?
Third-party cookies are primarily utilised for remarketing. Once a third-party cookie is dropped, the website has collected data about your browsing activity during your visit and as a result, can now serve highly relevant ads to you. And although some people find them intrusive and a bit creepy, they work well, due to the level of personalisation they enable.
For example, a user who previously visited a website and added products to their basket without checking out could be retargeted after leaving the site when browsing the internet, with bespoke messaging, like a discount, to encourage them to make a purchase. A B2B business could target users who showed an interest in specific pages with content such as white papers, demonstrating their expertise in the industry to tempt decision-makers back.
While there are some strong cases for audience and demographic targeting, ultimately, customers who are familiar with a brand that can also deliver tailored messaging, are more likely to convert.
So why has Google decided to hold fire on third-party cookies?
Citing the complexity of removing cookies, and delays to the development and implementation of its own Privacy Sandbox system, which includes technology known as the Federated Learning of Cohorts, or FLoC for short, Google has said it now plans to complete the phase out by the end of 2023.
Another big reason is likely to be regulators taking issue with the competitive advantage this technology could provide Google when it comes to online advertising – an area where Google is already dominant.
Vinay Goel, Privacy Engineering Director, Chrome, said:
“We plan to continue to work with the web community to create more private approaches to key areas, including ad measurement, delivering relevant ads and content, and fraud detection. Today, Chrome and others have offered more than 30 proposals, and four of those proposals are available in origin trials. For Chrome, specifically, our goal is to have the key technologies deployed by late 2022 for the developer community to start adopting them. Subject to our engagement with the United Kingdom’s Competition and Markets Authority (CMA) and in line with the commitments we have offered, Chrome could then phase out third-party cookies over a three month period, starting in mid-2023 and ending in late 2023.”
Because Google will be developing this new cookie-replacing technology, which will instead categorise users into ‘cohorts’, questions have been raised about whether this gives them an unfair advantage over their competitors, leading Google having to acknowledge the UK Competitions and Markets Authority (CMA) investigation. The CMA was looking into whether this move by Google could result in advertisers shifting more budget into Google Ads. As of this month, Google and the CMA have agreed to work together to develop its Privacy Sandbox further.
In a statement from the CMA, it confirmed that:
“The CMA is now reviewing Google’s commitments and, if accepted, the commitments would be legally binding.
“Google has agreed to engage with the CMA and the industry on changes, timelines, tests, etc. eThe company also firmly states that they “will not build alternate identifiers to track individuals as they browse across the web, nor will we use such identifiers in our products. Further, our ads products will also not access synced Chrome browsing histories or publishers’ Google Analytics accounts to track users for targeting and measuring ads on our own sites, such as Google Search.
“Lastly, Google commits to not giving themselves any advantages. As the Privacy Sandbox proposals are developed and implemented, that work will not give preferential treatment or advantage to Google’s advertising products or to Google’s own sites.”
An alternative to third-party cookies is most certainly required, but many seem to be skeptical about Google’s latest play in this space. In fact, so far, no other browser vendor has expressed any intention to support FLoC.
How do you think this will play out? Is FLoC dead in the water, or, with proper oversight, could it become the privacy-friendly solution marketers and consumers need?