Google has reversed course again, announcing that rather than phase out third-party cookies in Chrome, it will instead explore a “new path” for online privacy. The dramatic cancellation of Google's plans after more than four years of promises and delays comes as the company's vision for a cookie-free future continues to face resistance from across the advertising industry.
While many marketers will welcome a moratorium on a technology that has long been a bedrock of digital marketing, the move is likely to deal a major blow to the growing field of alternative IDs. Consumers and regulators have yet to pass judgment, but the decision may not be as relevant as the continued growth of cookie-free segments like connected TV (CTV) and mobile.
“This news is sending ripples throughout the industry. While it may seem like a breath of fresh air for advertisers who rely heavily on cookie-based tracking, it does not change the industry's trajectory toward increased privacy and user consent,” Marcal Serrate, Azerion's director of data technology, said in emailed comments.
Google did not go into detail about what the new approach would entail, but said it was discussing “new paths” with regulators and would work with the industry to develop it. The company will continue to offer and invest in its Privacy Sandbox API, a proposed alternative to cookies, as well as provide additional privacy controls, such as IP protection in Chrome's Incognito mode.
“We're proposing a modern approach to empowering users with choice: rather than eliminating third-party cookies, we're introducing a new experience in Chrome that gives users the ability to make informed choices that apply across their web browsing, and adjust those choices at any time,” Anthony Chavez, Google's vice president of Privacy Sandbox, said in a blog post.
It is unclear whether Google will choose an opt-in or opt-out mechanism as it moves forward with its cookie rollout, leaving advertisers in even more limbo. By comparison, Apple introduced its App Tracking Transparency (ATT) framework in 2021, requiring consumers to opt-in to tracking by apps.
Consumer behavior around opting in has evolved since then: 50% of users worldwide are now opted in to being tracked by ATT, according to AppsFlyer data, up 10% since its debut. If Google decides to continue using cookies with opt-out options, consumers should prepare to see pop-ups similar to those we see today due to the EU's General Data Protection Regulation.
“Expect to see an increase in annoying EU-style popups on every site you visit, which is bad for UX but will satisfy regulators on both sides of the Atlantic,” Rio said. Longacre“These are the kinds of companies that are looking to make money online,” said managing director of advertising and marketing transformation at consulting firm Slalom in emailed comments.
Winners and Losers
Google first announced in 2020 that it would end support for cookies, a key technology in digital advertising, but the plans were postponed several times, most recently to April. Throughout this process, advertisers, publishers, the ad tech industry, trade associations, and perhaps most importantly, regulators such as the UK Competition and Markets Authority (CMA) and the UK Information Commissioner's Office (ICO) expressed concerns that removing third-party cookies would disrupt the digital advertising industry and put too much control in Google's hands. This significant backlash makes Google's latest decision more of a minor surprise than a true shock.
“We don't expect this announcement to change the situation significantly,” Epsilon chief analytics officer Rock Rose said in an emailed statement. “The expected outcome is essentially the same; the only difference is that more users may ultimately choose to hold. [third-party cookies] It’s really just another step on the journey rather than if Google were to force the change.”
The journey to a cookie-free future will continue despite Google's previous delays, as the advertising industry has spent countless hours and money on privacy solutions. Additionally, the continued development of cookie-free channels such as CTV makes the post-cookie environment an integral part of advertising, regardless of Google's plans.
“A lot of the good work being done to prepare for a cookie-free future will still apply to omnichannel advertising,” Grant Parker, president of Mediaocean personalization platform FlashTalking, said in emailed comments. “Privacy regulations continue to evolve, and keeping consumer choice and consent in mind remains essential.”
Much of the work vendors have done so far has been directed at developing alternative IDs that would enable tracking and targeting while still preserving privacy, and Google's announcement is likely to accelerate a shakeout process in a field that already has several strong competitors.
“Looking out over the next 12 months, all but a few of the big ID spines will probably be gone. My guess is that walled garden IDs, The Trade Desk's UID2, and LiveRamp's RampID will be the only ones left,” says Slalom's Longacre.
AI regulation still in progress
While this news may lead to a rethinking of alternative ID vendors, not all ad tech providers are created equal, and companies offering cookie-based solutions to advertisers may find new hope, especially as they embrace one of the hottest technologies of the moment: artificial intelligence (AI).
“In the coming months, we expect to see a proliferation of new advertising solutions that leverage AI to analyze cookie-based data and more precisely target customers,” Eli Goodman, CEO of clickstream data provider Datos, a Semrush subsidiary, said in emailed comments.
Meanwhile, potential regulatory and legislative action continues to loom large over Google's moves and the future of online advertising. While privacy legislation in the form of the United States Privacy Rights Act is unlikely to be voted on again by Congress, the Supreme Court's recent Chevron decision has muddied the waters around regulating internet privacy.
While advertisers wait for Google’s new course plan to materialize, they will need to continue working to address the signal loss that’s already impacting consumer tracking and ad targeting.More than half of U.S. consumers use mobile web browsers that block cookies, and more than 30% use ad blockers, according to Andrew Richardson, senior vice president of advanced analytics and measurement at digital marketing agency New Engen.
“Brands and agencies may breathe a sigh of relief at this news, but they should not let their guard down – signals were already declining even without this development,” Richardson said in an emailed statement. “As an industry, we need to prioritize consumer privacy and adapt to a cookie-free world, rather than trying to head off the inevitable decline of these signals.”
