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February 11, 2020

Understanding Google’s “Cookie-Pocalypse”

Written by Jess Beldon
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Have you heard the news? The apocalypse is coming . . . at least that’s what some marketers would have you believe.

Indeed, the news certainly seems big: Due to the rise of privacy concerns, Google announced that it will stop supporting third-party cookies on Chrome, the web's most popular browser.

Google is not alone in phasing out third-party cookies. Apple blocks cookie tracking on Safari, and Mozilla does so on Firefox. However, they represent less than 25% of the web browser market share. With the addition of Chrome’s 56%, this could indicate the definitive end to the third-party cookie. 

Considering that the advertising industry relies heavily on third-party cookies to serve up personalized advertising, the “Cookie-Pocalypse” will unequivocally change the marketing landscape.

As expected, the industry has weighed in with varying opinions in the subject. In strong opposition are the Association of National Advertisers (ANA) and American Association of Advertising Agencies (the 4A’s), who issued a joint statement condemning the move.  

Not sure what the fuss is about? Let’s take a closer look at what’s going on.

What Google Announced about Third-Party Cookies

In a blog post, Google acknowledged that over the next two years, it will not support third-party cookies on its Chrome browser. For context: a third-party cookie consists of a tiny piece of data stored on a person’s computer that is created by a website other than the site that user is visiting. Through a vast network of third-party cookies, advertisers can follow a person’s browsing history and create user profiles based off of the information these cookies collect. This enables advertisers to serve relevant, personalized ads across the web.

Google is not exactly abolishing the ability for advertisers to offer personalized content. Google said that the company is working with its ecosystem of partners to come up with an as-yet-defined browser-based mechanism that will support publishers while protecting user privacy. The mechanism will be a byproduct of Google’s “Privacy Sandbox,” which is an open-source initiative that Google rolled out in 2019 to come up with new standards to protect consumer privacy.

What, exactly, Google will develop to replace third-party cookies remains unclear. When Google announced the Privacy Sandbox in August 2019, the company hinted at a new mechanism, as follows:

Some ideas include new approaches to ensure that ads continue to be relevant for users, but user data shared with websites and advertisers would be minimized by anonymously aggregating user information, and keeping much more user information on-device only. Our goal is to create a set of standards that is more consistent with users’ expectations of privacy.

One thing is clear: Google is moving to make the web more private.

How Advertisers Have Reacted

Not surprisingly, many advertisers have reacted with concern, as have data companies that built their businesses on the ability to track third-party cookie data. The joint statement by the ANA and 4 A’s said, “It may choke off the economic oxygen from advertising that startups and emerging companies need to survive.”

Others are concerned that the move will make Google’s own advertising products more dominant because Google will still be able to use data from its own search and other properties to target ads to people even after it phases out third-party cookies.

While many are stoically preparing for the eventual change, or figuring out how to prosper from it, some industry experts are questioning the value of third-party cookies in the first place. In a blog post, Clarivoy CEO Steve White wrote, “Most third-party data sources are ineffective because they use modeled data that tries to guess if someone is in-market based upon random or non-corollary attributes of a consumer profile.” He concluded, “ . . . now is the time to prepare for a world without third-party cookies and third-party-cookie-based audiences. Now is the time to be first and invest in a first-party data strategy for attribution, ad targeting, and identity management.”

What’s Next

Change is not just coming – it’s already here. The enactment of legislation in Europe (GDPR) and in the United States (the California Consumer Privacy Act) are signs that the online world is become a more private, consumer-centric one (as we’ve discussed on our own blog). But Google also wants to make it possible for publishers to continue to offer personalized content, which is where the Privacy Sandbox comes into play. No one knows yet what will replace third-party cookies – but we have two years to find out.

In fact, there is some speculation that Google could scale back its plans to phase out third-party cookies if it faces enough opposition. As this situation evolves, we recommend you work closely with your privacy and paid media teams to understand where Google is headed. Monitor Google closely for updates, or talk with Google directly if you are a partner. Meanwhile, we’re also monitoring the situation to help our clients sense and respond to change.

Contact Investis Digital 

It’s going to be another big year for businesses that understand how to adapt to the dynamic performance marketing landscape. Investis Digital can help you succeed. Our performance marketing solutions help you reach, influence, and convert the people who matter most to you. Contact Investis Digital to learn more.

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