The advertising industry has been involved in a waiting game since 2020, which is when Google said it would eradicate third-party cookies in the Chrome browser. The wait came to an end on July 22, when Google reversed course and said it would not kill third-party cookies after all. This was quite a dramatic change for Google. So, now what? Is everything going back to the way things were pre-2020, when advertisers relied on tracking third-party cookies to personalize their content? Not quite. Here’s what you need to know:
Third-Party Cookies Might Still Go Away
There was some important fine print in Google’s announcement about walking back on its plans for third-party cookies: Google is enacting an important privacy control that could signal the demise of third-party cookies, anyway. Users will be prompted to choose whether they want to allow cookies, similar to Apple’s App Tracking Transparency feature. The exact wording and timing of this prompt remain unclear, and the advertising industry is anxiously awaiting details. The specific language used could significantly affect user choices and the amount of data available to advertisers. Concerns exist that Google might adopt a strict approach like Apple’s, which has negatively affected many in the digital advertising business.
Chrome is the most popular web browser globally and the only major one still supporting cookies. Its dominance makes it crucial for the digital ad industry, which is expected to generate $677 billion this year. Depending on how Chrome users respond to the prompt, there could be major repercussions for ad-tech companies and web publishers. When Apple introduced its tracking prompt, Facebook suffered a $10 billion revenue loss in 2022 alone.
Google hasn’t finalized the details of the new feature, but it emphasizes user choice. The outcome of this decision could still affect the future of digital advertising.
You Can Still Play in Google’s Privacy Sandbox
The Google Privacy Sandbox is an initiative by Google to develop new web technologies that prioritize user privacy while still allowing businesses to thrive online. It aims to replace third-party cookies and limit cross-site tracking, which are currently used for targeted advertising and personalization.
Google had launched the Privacy Sandbox as an alternative to using third-party cookies. But since users will still have the option of opting out of being tracked online, Google plans to keep the Privacy Sandbox. In a blog post, Google said, “Early testing from ad tech companies, including Google, has indicated that the Privacy Sandbox APIs have the potential to achieve these outcomes. And we expect that overall performance using Privacy Sandbox APIs will improve over time as industry adoption increases.”
First-Party Data Is as Important as Ever
One of the lessons from the past few years: advertisers need to find alternatives beyond Google. If they don’t, Google will continue to shape their futures. In fact, a number of advertisers have done just that. For instance, increasingly, businesses have shifted their advertising dollars to retail media networks.
Retail media networks experienced a robust 16.3 percent growth in 2023, indicating a shift towards targeted advertising on eCommerce platforms, which is likely to persist as retailers capitalize on the value of their digital channels. One of the big reasons for their popularity is that retailers collect extensive first-party data from their customers through transactions, loyalty programs, and browsing behaviors. This data is immensely valuable for advertisers because it is precise, consent-based, and reflective of actual consumer behavior, allowing for highly targeted and personalized advertising campaigns.
In addition, advertisers are learning how to tap into their own first-party data to generate more personalized, targeted ads. With first-party data, advertisers can target new customers based on data you collect about your current customers. Based on data collected from your site visitors, your social media following, and email subscribers, you can pinpoint other demographics and geographical locations likely to be interested in purchasing your products. You can use this information to build out campaigns that target fresh audiences.
What Advertisers Should Do
- Accept the reality that third-party cookies might meet their demise, anyway, under Google’s pending opt-in protocol.
- Try alternatives beyond Google’s Privacy Sandbox. These include alternative IDs, contextual targeting, and universal IDs.
- Invest in ways to leverage your own (first-party) customer data to create personalized ads.
- Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.
At True Interactive, we have extensive experience helping clients succeed with all forms of digital advertising. Learn more about our capabilities on our website.
Image by Gerd Altmann from Pixabay
