Google’s cookie phase-out hits a snag; data vendors won’t mind the delay

It all started in 2020 when Google announced that it was going to put an end to its third-party cookies accumulated via its web browser Chrome. Even back then, Apple’s Safari and Mozilla Firefox had already taken the lead in parting ways with the practice. It has been four years since, and Google has hit snooze on its cookie deprecation, for the third time since 2020. 

The tech company postponed its plans to phase out cookies, citing challenges encountered in testing programmatic ad markets sans cookies. The company disclosed this setback on Tuesday, attributing it to UK regulators. Google stated officially in a blog post that the UK Competition and Markets Authority (CMA), the antitrust regulator overseeing the Chrome Privacy Sandbox, requires more time to completely assess the efficacy and fair practice of the company’s alternative to cookies.

The Privacy Sandbox, piloted first in August 2019, is an initiative by Google aimed at enhancing online privacy while still allowing for effective digital advertising, as a viable alternative to third-party cookies. 

Bear in mind that Chrome constitutes about 60% of the total browser market globally. So, having an adtech platform integrated within its own browser rightfully raised concerns about competition fair practices, particularly for other adtech platforms. This has prompted regulators to get involved. 

Rajiv Dhingra, who is the founder and CEO of ReBid, a full stack Advertiser’s Customer Data Platform (CDP), weighs in on Google's decision, emphasising the need for a non-anti-competitive alternative. Dhingra points out that while Google may not rely heavily on cookies due to its dominance in web browsing, mobile operating systems, and online services, other advertising players, especially those operating large demand-side platforms (DSPs) heavily depend on them.

He says, “One needs to realise that Google doesn’t need cookies to run its advertising business, other advertising players do. Especially those who run large demand-side platforms (DSPs) like The Trade Desk and Xandr. Google owns Chrome which is the largest web browser, it owns Android which is the largest mobile OS and it also has the largest website on the planet called Google Search and the largest email in Gmail.”

From a marketers' point of view, Dhingra highlights that the delay in cookie deprecation provides marketers with additional time to ready themselves for a cookieless future, aiming to make this transition less impactful. He outlined key preparatory steps, advising marketers to commence the collection, management, activation, and enrichment of first-party data across various touchpoints, encompassing web, app, and offline channels.

He says, “Just like financial institutions have a KYC, each and every business needs to have a Know your customer/prospect policy wherein they collect and index profiles that help them activate them later. Of course, all of this needs to be done with a consent framework in place so that it’s by the laws of the country.”

In the light of consistent postponements at the hands of Google, and the CMA concerns surrounding the Sandbox, Tejinder Gill, the general manager for India at The Trade Desk, has emphasised the ongoing opportunity for industry innovation in improving identity on the open internet. 

The Trade Desk, a technology company specialising in digital advertising solutions, operates a demand-side platform (DSP) that enables advertisers to execute targeted campaigns across various digital channels.

However, Gill remains optimistic. He says, “Whether Google delays the deprecation of third-party cookies tomorrow or in 2025, the industry still has the opportunity to improve identity on the open internet. Innovations such as Unified ID 2.0 support the needs of the modern marketer, maintaining the value exchange of relevant advertising and enabling brands to put their first-party data to work. We aspire to make the internet better and put both advertisers and publishers in control of their own destiny.”

Unified ID 2.0 is an identity solution developed by The Trade Desk as an alternative to third-party cookies for digital advertising targeting and measurement.

Sajal Gupta, CEO of Kiaos Marketing Pvt Ltd, raises valid concerns about Google's Privacy Sandbox. He highlights the current structure of the Privacy Sandbox, suggesting that it primarily serves Google's interests by not sharing data with its competitors.

He says, "Privacy Sandbox, with the way it is built right now, continues to benefit Google, and does not let this data pass on to its competitors. This is why regulators had to step in and ask Google to sort its affairs, which has essentially become the roadblock in Google's journey to phase out the cookies."

Gupta also mentions a drop in efficiency of about 8-10% based on initial tests of the Privacy Sandbox. This decrease in efficiency could potentially impact advertisers and marketers who rely on precise targeting and tracking for their campaigns. The delay, therefore, is favourable for many, as per Gupta.

"The delay in this phasing out is only going to benefit the adtech platforms, who can now have more time to prepare for a cookie-less world. Initial tests on Privacy Sandbox have shown that efficiency has dropped by about 8-10%. The delay therefore works in favour of other players, at the moment," he says.