It’s been a quiet week, hasn’t it? After the world’s IT infrastructure came crashing down (and a few other noteworthy events), we were hoping for a sedate Tuesday. Instead, Google has upended the marketing world with a major announcement: that it’s U-turning on its decision to deprecate third-party cookies in Chrome.
The decision to row back on years of messaging about the end of third-party cookies may be bigger for Google than it is for marketers. But what does the bombshell statement from Google really mean for marketing and advertising—and how will the move to continue collecting user data go down with privacy advocates and regulatory agencies?
The role of third-party cookies
More or less since the advent of the General Data Protection Regulation (GDPR), Google and other companies have come under pressure for their use of third-party cookies. In simple terms, cookies are small files that track your interactions with websites, such as whether you are logged in, your preferences, and the pages you visit.
First-party cookies track data for the site you are visiting. Third-party cookies, by contrast, record your data while you are browsing other websites. They most often do this through embedded elements on other sites, such as YouTube videos, images, or ads. The data these cookies collect can effectively track you across the internet, recording data as you hop from page to page and site to site.
Cookies are invaluable for advertisers, as they keep tabs on what you’re looking at and when, allowing for ads to be more accurately targeted at you. The simplest example of this is remarketing, where you’ll see ads for a product you’ve looked at previously pop up in search results, on social media, or on other websites.
Thanks to third-party cookies, data on which websites you’ve looked at can also be used by rival companies to advertise alternative products to you. All of your combined data meanwhile can be used to build a profile of you: what your estimated age, gender and other info is based on what you’re looking at, and thus what other products or services you’re likely to be interested in.
What Google was planning for third-party cookies
Google had come under scrutiny over third-party cookies because of concerns about user privacy. Regulators and activists have long felt that too much data is being collected surreptitiously about user behaviour online, without the full knowledge or consent of users.
The profile built up from cookie data about a person could be seen as intrusive, advertising things to them that they do not want to see, or even allowing them to be identified were the information ever to be leaked.
As a result of this growing pressure—including the threat of fines from the European Commission—Google had pledged to phase out third-party cookies. In January 2020, the company said it would happen within two years, but this was continually pushed back due to objections from advertisers.
In October of last year, Google announced that it would be withholding third-party cookies from 1% of users in Chrome, replacing them with what it called The Privacy Sandbox, a suite of tools to track user behaviour without third-party cookies.
This change was a response to regulators, but it was also an acknowledgement of changing user behaviour. As a result of GDPR, users on most websites now have the option to deny third-party cookie tracking, even if it is often cumbersome to do so (something that should be against the rules).
Browsers are getting in on the act, too, with rivals Firefox and Safari both automatically blocking most or all third-party cookies. As a result, third-party cookies are collecting less data, making it harder to target ads.
What Google’s change to third-party cookies means
Rather than focussing on ending third-party cookies entirely, Google has decided to give Chrome users more centralised control over third-party cookies. The decision to row back on its initial plans reflects a general move to give users more choice, but it’s also an admission that the change had come too fast for advertisers.
Google Ads is arguably the core of Google’s business, and getting rid of third-party cookies at this point threatened to cut right into it. The advantages that third-party cookies afford Google Ads mean that getting rid of them could seriously impact revenues, and the effectiveness of ads for businesses.
The Privacy Sandbox has shown some promise for tracking user behaviour without third-party cookies, with Google reporting near 100% recovery of ad spend across a number of different areas. But the costs are still too high for many, and the tech is still in its infancy.
In an ironic twist, The Privacy Sandbox has also been queried by regulators over its potential to form a new monopoly. While Google Ads is currently the market leader in online advertising, Google’s combination of a dominant market share in Chrome and market-leading tech for cookie-free tracking could incur antitrust penalties.
What’s certain, however, is that the shift away from third-party cookies is here to stay. Google may not be transitioning away from them yet, but it is also continuing to experiment with The Privacy Sandbox, and disabling third-party cookies for 1% of Chrome users.
And while Google tinkers with new tracking tech—and placates regulators—other browsers that block third-party cookies will continue to put pressure on Chrome by advertising their privacy features, and leaning into growing concerns about data privacy.
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While the news will come as a relief to many marketers, publishers and advertisers, it’s still imperative to explore strategies that reduce our reliance on cookies. With so much still unknown, and with consumers increasingly concerned about how their data is used, future proofing a business via alternative solutions (such as first-party data) can only help to earn consumer trust and safeguard the future. While the result may be a short sigh of relief, there’s a lot of road left, and we should prepare for it to be bumpy.