In a move that’s rattled the global technology and marketing sectors, Google has today announced it will delay the deprecation of the third-party cookie — the ubiquitous tool used to track users’ activities across the web. The company originally planned to sunset the technology in early 2022. Here’s what you need to know.
Google has long been the gatekeeper of the third-party cookie, the seemingly omnipresent technology lurking in the background of nearly every website and app that a user visits, enabling advertisers to track individuals’ web behavior and serve targeted ads to users. In the increasingly privacy-focused world, the technology has come under fire from lawmakers, privacy advocates and consumers.
Google’s answer to the mounting pressure was multifaceted. It announced it would be sunsetting the third-party cookie in early 2022, but so as to not leave businesses and marketers at a total loss, it introduced what it calls a “Privacy Sandbox.” Rolled out in January of this year, the Privacy Sandbox introduced new proposed solutions — including the hotly debated Federated Learning of Cohorts (FLoC). It suggested that these solutions will offer greater privacy for consumers while still enabling advertisers to access some (purportedly more obscured and less granular) data on users' web behavior.
In the wake of these announcements, adland has fallen into chaos, not only seeking to understand the company’s new proposals (alongside similarly privacy-centric changes introduced by Apple), but also attempting in many cases to develop its own solutions that seek to balance consumers’ need for privacy with advertisers’ demand for tracking abilities.
The pressure facing marketers, technologists and publishers leading up to the repeal of the third-party cookie has grown to a fever pitch. In response, Google has changed course. It will “phase out third-party cookies over a three-month period, starting in mid-2023 and ending in late 2023,” per today’s statement. The tech giant cited the need to “move at a reasonable pace….[to] allow sufficient time for public discussion on the right solutions, continued engagement with regulators, and for publishers and the advertising industry to migrate their services.”
The extra cushion will offer advertisers, engineers, publishers and regulators more bandwidth to develop, test and deploy new solutions to fill the gap left by the death of the cookie. Immediate reactions in the marketing world are — considering the already-controversial debate over balancing consumer data privacy with advertising effectiveness — predictably mixed.
“The death of the cookie then and even more so now, is greatly exaggerated,” says Kamyl Bazbaz, vice president of communications at DuckDuckGo, the famously privacy-focused search engine and outspoken opponent of the Privacy Sandbox’s proposed solutions. DuckDuckGo, Amazon, GitHub and others have announced they will be blocking Google’s FLoC, with many arguing that its protections do not go far enough and that the technology is if not equally, then proximally, invasive as third-party cookies. “Marketers should understand that Google’s ‘pro-privacy’ commitment to reduce their reliance on cookies was a means to strengthen their already dominant position in the ad market,” Bazbaz continues. “Despite this change from Google, consumers will continue to take steps to stop third parties from tracking them and marketers should understand the risk they take when they track and target customers without their knowledge.”
Others aren’t so put off. Eric Seufert, analyst at mobile marketing firm Mobile Dev Memo, thinks that FLoC may be an effective and appropriate answer to the death of the cookie. “Ultimately, this seems like a case where the perfect was made the enemy of the good: while flawed at the margins, FLoC is a novel and effective conceptual approach to preserving advertising performance while protecting consumer privacy,” he says. “The delay of cookie deprecation simply means that consumers will continue to be subjected to invasive cross-site tracking via cookies, which I'm sure is not more privacy protective than FLoC.”
Seufert, and others in the industry, didn't find today’s announcement particularly shocking. “Google's decision to postpone the deprecation of third-party cookies is not unexpected, given the vigorous repudiation it received from privacy advocates,” he says.
Myles Younger, senior director of data practice at data and digital media consultancy MightyHive, wasn’t surprised by the move either. Ad tech leaders on Twitter “called it almost a year ago," he says. Indeed, Younger himself posted a thread of tweets last July predicting that perhaps the tech titan would be unable to meet its previously announced deadline of early 2022. Even with the extension, however, Younger feels that the industry faces massive hurdles in grappling with the simultaneous sunsetting of the cookie and the influx of new privacy regulations and privacy-focused policies coming out of big tech. “The complexity is too damn high,” he tells The Drum.
And while Google says the decision was made to allow regulators, publishers and the ad industry more time to prepare, the move is likely to benefit the company, too. In 2020, Google’s parent company Alphabet brought in almost $183bn in revenue, with over 80% attributable to Google’s ad business. The extension could give the company some increased legroom to optimize its business plan for the future. “Apple pushed back iOS 14 changes for similar reasons. Since the majority of Google’s revenue is impacted by the change, a delay was expected,” says Chris Comstock, chief product officer at data integrity firm Claravine. “Brands and marketers should still prioritize overhauling their marketing operations and measurement strategy for a world of walled gardens so marketers are in control when the change happens, not if it happens."
The resounding sentiment among technologists, marketers and publishers today, however, seems to be, if not surprise then relief. Patrick O’Leary, chief executive of publisher CRM Boostr, for one, feels that the announcement is a welcome chance for the sector to work together to develop some cookie alternatives that could be more effective than those outlined in Google’s Privacy Sandbox. “This delay presents a good opportunity for the ad industry to unite and align on alternative solutions to FLoC, which raises more questions than answers,” he says. “The industry needs to find a compelling solution that solves the competing needs of consumers and advertisers who fund the free web as we know it, without letting the biggest monopoly decide how this should be solved when, historically, their intentions have been self-serving.”