Google is clearly learning negotiation lessons from my teenage children: I’ll do this, I’ll do that, I’ll do that.
The digital advertising giant’s announcement yesterday, after four years of fear, uncertainty and doubt, that it would abandon its plans to eliminate cookies and instead move to a browser-based consent model, was as shocking to some as it was inevitable to others. Google had previously delayed eliminating cookies Three times since the move was first announced in 2020.
The consensus view is that Google is caught between a difficult regulatory situation and the rock on which its fortunes are built — the vast river of gold that flows from its near-monopoly control of search (despite AI inroads) along with its broader advertising ecosystem.
Contextual shifts
The context of the timing of the announcement is important. The UK Competition and Markets Authority is due to issue its quarterly update on this assessment of Google’s approach to third-party cookies, and Google has been unimpressed by the CMA’s response over the past year. In fact, the regulator has appeared to harden its views. It is unlikely to be a coincidence that Google is announcing this before the CMA’s latest update.
Meanwhile, the Justice Department’s antitrust case is set to begin in September, and if it loses, Google faces the prospect of having its ad tech business broken up. Justice Department prosecutors allege that the company takes at least 30 cents of every digital dollar flowing through its pipes and wires — and sometimes much more — with few alternatives in the market and competitors squeezed out.
According to Ariel Garcia, director of intelligence at Check My Ads, “The next CMA quarterly report is due out any day now, and we might get some clarity there on the ‘why now’ of this announcement. But if I had to guess the other part of the driver here, it’s that they’re about to go into antitrust trial. There’s all this buzz about separating the sell-side from their ad tech business. People are saying ‘so you’re going to move everything to the browser and then separate the sell-side from the ad tech business… that doesn’t really solve anything.’”
“I think it’s pretty clear that this move is not independent of the fact that Google knows that this [DOJ Antitrust] “Clinical trials have begun and minds and eyes are beginning to turn toward what real treatments might look like.”
I saw him coming
According to research firm Forrester, the majority of B2C marketers in Asia Pacific didn’t think cookie elimination would ever happen — and that number has been growing steadily.
“It is no surprise that Google has finally scrapped its plans to phase out cookies after three delays in four years,” Xiaofeng Wang, principal analyst at Forrester, told Mi3.
“Most marketers in Asia Pacific have been expecting this to happen. According to a Forrester 2024 marketing survey, 53% of B2C marketing decision makers in Asia Pacific do not believe Google will stop using third-party cookies, up from 49% in 2023. This should ease the pressure on advertisers to adopt the Privacy Sandbox, Google’s initiative to replace third-party cookies with privacy-preserving technologies.”
Wang noted that the cancellation was happening with or without Google’s plans.
“Consumers in the Asia-Pacific region are becoming more privacy-sensitive. For example, 42% of Australian online adults have already cleared their browsing history, 23% have installed ad blockers, and 21% use private or incognito mode on their browsers to protect their online privacy,” according to Forrester’s 2023 Consumer Survey.
“Prevailing consumer data privacy regulations, such as GDPR and CCPA, and Asia-Pacific-specific regulations such as Singapore’s Personal Data Protection Act and India’s Personal Data Protection Act 2023, impose rules on the use of cookies by third parties, and require transparency and user consent,” she said.
It’s also worth noting from the Forrester Marketing 2024 study that “64% of B2C marketing decision makers in Asia Pacific have invested in more data collection from primary and zero sources, and 62% are testing more context-based advertising.” This shows that brands have already moved beyond cookies—at least in part.
“We’ve done a lot of good work planning for a world beyond third-party cookies. We’ve made the most of this opportunity to improve our targeting and measurement by optimising our first-party data and audience strategy, and we’ll continue to focus on this,” said Louise Ling, ANZ Marketing General Manager at Intrepid Travel.
She acknowledged that external audiences would still be an important part of our toolkit, but told Mi3 that relying too heavily on them would be risky.
“We want to get to know our customers better and provide them with a delightful experience. Collecting data through our own channels is still the best way for us to develop that direct relationship. And we can do this while giving customers control over how their data is used.”
User choice?
In terms of the details of the announcement, Chris Brinkworth, managing partner at consulting firm Civic Data, said Google’s plan to offer more choices around privacy and cookie options could ultimately significantly reduce cookie usage — but the overlap between cookies and Chrome’s Privacy Sandbox APIs could end up creating more confusion.
Brands need to prepare for these changes, Brinkworth said, but also question why Google isn’t fully educating them about the impacts already seen in other browsers, or why they’re pushing the industry toward their preferred advertising methods versus those that complement the truly open web.
He added that it is important to think outside the scope of Chrome.
“Keep in mind that Google’s GA4 analytics tool as a first-party cookie generally cannot track unique visitor information for more than seven days within Safari as a first-party cookie, but takes much longer in Chrome. Understanding these fundamental limitations outside of Chrome is critical for businesses in today’s digital ecosystem, but somehow Google doesn’t feel it’s important to educate or warn businesses against such complacency in advertising like this.”
No backtracking
The message from industry associations, agencies and service providers was unified: brands must avoid the temptation to backtrack and continue building first-party data capabilities.
like Mi3’s Fast News reported yesterday thatIn a written statement released shortly after the news broke, ADMA CEO Andrea Martins welcomed Google’s decision, but stressed the need for brands to continue with their own initiatives regardless.
“For marketers, the proposals put forward in the Privacy Sandbox so far have been concerning because of the negative impact they could have on ad effectiveness and campaign performance, while still not meeting privacy laws,” said Martins. “ADMA is encouraged to see that Google has taken a different approach, rather than categorically pursuing a solution that will not benefit the consumer or the marketer. We look forward to Google engaging with the industry as they roll this out.”
Media companies have already invested heavily in first-party data structures, and say they can prove beneficial to brands.
Paul Blackburn, News Corp’s director of commercial data and e-commerce, noted a 150% increase in click-through rates to the travel site Beyond Journey through News Corp’s first dataset.
It’s a similar story at Nine, where chief data officer Suzie Cardwell pointed out that the publisher and broadcaster had been developing its first-party data infrastructure long before Apple’s Safari cookie-free rollout began in 2017 – and cited data matching as boosting Coles’ online visits by 32 per cent.
Free kick
Google’s ad tech rivals have expressed skepticism about its intentions.
“The advertising industry has moved forward, realising that the digital world extends beyond Chrome,” said ANZ Bank’s vice-president at The Trade Desk, James Bays, who claimed that The Trade Desk’s alternative cookie initiative, Unified ID 2.0, which creates an identifier by hashing email addresses or phone numbers, is one of a number of “superior identity solutions that are not controlled by big tech” and represent a “major upgrade for the internet”.
He questioned whether Google would give consumers a real choice about tracking or effectively choose for them by selecting Chrome users and then making it difficult to opt out.
Others have raised similar questions about Google’s broader use of consumer data — and whether internet users have a real choice about being tracked.
