Google has clearly learned some negotiation lessons from my teenage children: I’ll take care of it, I’ll take care of it, I’ll take care of it. Oops.
The digital advertising giant’s announcement yesterday that, after four years of fear, uncertainty, and doubt, it was abandoning its plans to kill cookies and instead moving to a browser-based consent model was as shocking to some as it was inevitable to others. Google had already delayed its cookie kill three times since first announcing the move in 2020.
The general view is that Google is stuck between a regulatory anvil and the rock on which it built its fortune – that immense fortress of solid gold, built on the exploitation of its near-monopolistic control of search (despite AI incursions) as well as its broader advertising ecosystem.
Contextual changes
The context of this announcement is important. The UK Competition and Markets Authority (CMA) is due to publish its quarterly update on this assessment of Google’s approach to third-party cookies, and there has been little that the CMA has published in the past year to be encouraging for Google.* In fact, the regulator appears to have hardened its stance. The fact that Google made this announcement before the CMA’s latest update is probably no coincidence.
Meanwhile, the Justice Department will launch an antitrust case in September, and if it loses, Google could see its adtech division dismantled. Justice Department prosecutors say the company takes at least 30 cents of every digital dollar that flows through its channels and wires — sometimes much more — as the market has few alternatives and competitors are squeezed out.
According to Arielle Garcia, Director of Intelligence at Check My Ads, “The next quarterly report from the CMA should be out in the next few days, 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 engine here is that they’re about to get into an antitrust lawsuit. There’s all this buzz about spinning off the sell side of their ad tech business. There are people saying, ‘So you’re going to move everything into the browser and then spin off the sell side of the ad tech business… that doesn’t really solve the problem.’”
“I think it’s very clear that this decision is not independent of the fact that Google knows that this [DOJ Antitrust] The trial begins and minds and eyes begin to turn to what real cures might look like.
I saw it coming
According to research firm Forrester, a majority of B2C marketers in the Asia-Pacific region did not believe cookie abandonment would ever happen – and that number was growing.
“It’s no surprise that Google has finally abandoned its plan to delete cookies after three postponements in four years,” Forrester principal analyst Xiaofeng Wang told Mi3.
“Most marketers in Asia Pacific saw this coming. According to Forrester’s 2024 Marketing Survey, 53% of B2C marketers in Asia Pacific did not believe Google would phase out third-party cookies, up from 49% in 2023. This would further dampen the urgency for advertisers to embrace Privacy Sandbox, Google’s initiative to replace third-party cookies with privacy-preserving technologies.”
Wang stressed that the abandonment was happening with or without Google’s plans.
“Consumers in the Asia Pacific region are increasingly privacy conscious. For example, 42% of online Australian adults already clear their browsing history, 23% install ad blockers and 21% use private or incognito mode in their browser to protect their online privacy,” she said, citing Forrester’s 2023 Consumer Benchmark Survey.
“Major consumer data privacy regulations such as GDPR and CCPA, as well as APAC-specific regulations like Singapore’s PDPA and India’s DPDPA 2023, impose rules on the use of third-party cookies, requiring transparency and user consent,” she said.
It’s also worth noting that, according to Forrester’s Marketing Survey 2024, “64% of B2C marketers in Asia Pacific have invested in more zero- and first-party data collection, and 62% are testing more contextual ads.” This shows that brands have already moved beyond the cookie stage, at least in part.
“We’ve been working hard on planning for the post-third-party cookie era. We’ve taken this opportunity to improve our targeting and measurement by improving our first-party data and audience strategy, and we’ll continue to focus on this,” said Louise Laing, General Manager of Marketing ANZ at Intrepid Travel.
She acknowledged that third-party audiences will continue to be an important part of our toolkit, but told Mi3 that relying too much on them would be risky.
“We want to know our customers better and deliver an experience they value. Collecting first-party and zero-party data through our own channels remains the best way for us to develop this personalized relationship. And we can do this while giving customers control over how their data is used.”
User choice?
As for the specifics of the announcement, Chris Brinkworth, managing partner at consultancy Civic Data, said Google’s plan to introduce more choices around privacy and cookies could end up significantly reducing cookie usage — but the overlap between cookies and the Privacy Sandbox APIs in Chrome could end up creating more confusion.
Brinkworth said brands need to prepare for these changes, but also question why Google “isn’t fully informing them of the impacts they’ve already seen in other browsers, or why they’re pushing the industry toward their preferred advertising methods rather than those that complement a truly open web.”
It’s important to think beyond Chrome, he said.
“Consider that Google’s GA4 analytics tool, as a first-party cookie, can typically only track unique visitor information for up to seven days in Safari as a first-party cookie, but much longer in Chrome. Understanding these basic limitations outside of Chrome is crucial for businesses in today’s digital ecosystem, but somehow Google doesn’t think it’s relevant to educate or warn businesses against such complacency in announcements like this.”
No turning back
The message from industry associations, agencies and service providers was consistent: Brands must avoid the temptation to backtrack and continue to build their proprietary data capabilities.
As reported yesterday by Mi3’s Fast News, in a written statement released shortly after the news broke, ADMA CEO Andrea Martens welcomed Google’s turnaround, but stressed the need for brands to pursue their own initiatives regardless.
“For marketers, the proposals put forward so far in the Privacy Sandbox are concerning because of the negative impact they would have on advertising effectiveness and campaign performance, while failing to comply with privacy laws,” Martins said. “ADMA is encouraged that Google has taken a different approach, rather than dogmatically pursuing a solution that would benefit neither the consumer nor the marketer. We look forward to Google engaging with the industry as this solution is rolled out.”
Media companies have already invested significantly in first-party data architectures and say they can demonstrate the benefits they offer to brands.
Paul Blackburn, News Corp’s director of business data and e-commerce, cited a 150% increase in click-through rates for travel company Beyond Journey via News’ proprietary data stack.
It’s a similar story at Nine, where data director Suzie Cardwell pointed out that the publisher-broadcaster was building proprietary data infrastructure long before the cookie move was launched with Apple’s Safari in 2017 – and cited data matching increasing online visits for Coles by 32%.
Free kick
Google’s ad tech rivals have expressed skepticism about its intentions.
“The advertising industry has evolved, realising that the digital world extends beyond Chrome,” said James Bayes, vice president of The Trade Desk ANZ, who said The Trade Desk’s cookie-alternative initiative, Unified ID 2.0, which creates an identifier by hashing email addresses or phone numbers, is one of many “far superior identity solutions that are not controlled by Big Tech” and represent “a significant upgrade to the internet”.
He questioned whether Google would give consumers a real choice about tracking or would actually choose for them by opting in 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 would have a real choice about whether they would be tracked.