Google has once again announced it will be delaying third-party cookie deprecation in its Chrome browser—this time until the second half of 2024. The search and digital advertising giant said it was doing so to provide advertisers, AdTech companies, and other stakeholders more time to evaluate and test its proprietary Privacy Sandbox tools.
What are Third-Party Cookies and Why are They Being Deprecated in Chrome?
Third-party cookies are placed on your device by a website other than the one you're currently visiting. This happens so that this third party can remember something about you for later. Oftentimes, these advertising networks will set these kinds of cookies to attract more customers or generate higher traffic numbers overall.
The main reason that third-party cookies are being deprecated in Chrome is because they pose a privacy risk. By collecting user data, advertising networks can build profiles of users which can then be used for targeted advertising. This is a problem because it can be difficult to opt out of targeted advertising and many users are not aware of the extent to which their data is being collected.
There are also security concerns with third-party cookies. Because they are placed by someone other than the site owner, they are more vulnerable to attack. This means that they can be used to steal user data or track user activity online.
While third-party cookies do have some drawbacks, they can also be useful for website owners. They can be used, for example, to track how users interact with a website and to improve site performance. As such, there is no one-size-fits-all solution when it comes to cookie policies. It is important that website owners take into account the pros and cons of using third-party cookies before deciding whether or not to use them.
Why is Google’s Decision to Move Away from Third-Party Cookies Important?
Google’s Chrome is the internet’s dominant browser by far, accounting for well over 60 percent of the global market. Although Apple and Mozilla phased out third-party cookies in their Safari and Firefox browsers years ago, Google was slow to follow given its dependency on ad revenue. Of the $75 billion the company posted in revenue for Q4 2021, $61.2 billion came from advertising. Search advertising alone made up $43.3 billion of that total.
Given Google’s massive market share, any changes it makes to advertising models has a tremendous impact on the advertising and marketing industry. When companies build their marketing strategies and digital advertising budgets, they make many decisions based on what they believe will increase their visibility for Chrome users. Safari and Firefox’s cookie policies didn’t have much of an impact on overall strategies because of their limited reach, but Chrome’s third-party cookie deprecation will force them to rethink their approach.
How Will the Privacy Sandbox Affect Marketing and AdTech companies?
The Privacy Sandbox is Google’s attempt to find a way to deliver targeted advertising without compromising user privacy. Topics API is one of the technologies being used in the Sandbox. Google claims that it will allow businesses to target ads more effectively while still protecting user privacy. The API provides up to three topics from each of the past three weeks to websites and their advertising partners who use it as a signal for interest-based digital ads.
AdTech companies and other stakeholders have been given more time to evaluate and test the new API. However, it is not yet clear how effective the API will be in replacing third-party cookies.
Many advertisers feel that if topics are too broad, it will be more challenging to locate potential customers for their products. They're also skeptical about the current time frame of 1-3 weeks allotted per topic, as this may not give them enough opportunity to draw in an audience and create interest. In order to maintain privacy standards, there is a 5% chance that a random topic will be selected instead. This is supposed ensure that only a minimum number of members have access to any given topic at one time.
It remains to be seen how well the Privacy Sandbox will protect user privacy while still allowing businesses to deliver targeted advertising. However, the fact that Google is trying to find a balance between these two competing interests is a positive sign.
How Will the Delay Impact the Digital Advertising Industry?
By delaying Chrome's third-party cookie deprecation, Google has given the industry more time to evaluate their alternatives before making any lasting decisions in their marketing strategy. It's important, however, that advertisers don't use this respite to simply put off the inevitable.
The deprecation of third-party cookies provides the industry with a chance to fix longstanding issues with consumer privacy. The majority of privacy solutions presently being created are merely exploiting loopholes and getting around legislation rather than addressing the core problem. And because they are not actually honoring the increasing calls for enhanced data privacy, these loophole-solutions will undoubtedly be temporary.
Cookie deprecation will also have an impact on measurement and attribution. Advertisers need to start looking at other ways to measure their digital campaigns, such as using first-party data or working with Google's new ad products that don't require cookies. First-party data is a valuable resource for advertisers because it is more reliable than third-party cookies. Since people have given consent for the advertiser to use their data, there is no issue with privacy or fraud. First-party data also allows advertisers to target their audience more accurately, increasing the chances that they will reach their target consumers.
Overall, the cookie deprecation is a positive development for the digital advertising industry. It will force companies to focus on developing more privacy-conscious solutions that will benefit both consumers and businesses in the long run.
Preparing for the Future
Despite delaying the deprecation of third-party cookies yet again, Google remains committed to phasing them out by the second half of 2024. This means that third-party cookies will no longer be supported in Chrome, which accounts for over half of all internet traffic.
The delay gives advertisers more time to adjust, but they should not use this as an excuse to procrastinate. Privacy concerns are only going to become more prevalent over time, so the industry needs to find a way to address them head-on. Third-party cookie deprecation presents an opportunity for them to do just that. Advertisers will need to find new ways to measure their campaigns and target their audiences, which may lead to more innovative solutions when it comes to data privacy.
Not ready to face a world without third-party cookies? Our digital team has you covered. We can help you formulate a strategy to gather actionable data that keeps you connected to the audiences that matter. Let’s talk.