Google’s latest privacy decision knocked it out of the park, but marketers and the ad-tech industry can’t rest on their laurels, experts say.
Google’s decision to phase out third-party cookies in 2023 – rather than by early 2022, as originally planned – was welcome news to the advertising industry, which has had to plan for a cookie-free future amid other data privacy changes.
But even with a clearer timeline for when Google will do away with cookies, there will still come a day when advertisers, ad-tech providers and publishers will no longer be able to use third-party cookies to track consumers and target ads and content.
“It’s like if you find out that the math test you’ve been dreading for the last two weeks is canceled because the teacher is sick,” said Hugo Loriot, a partner at fifty-five, a data consulting firm. “At some point you’re going to have to tighten your knowledge anyway, and the worst thing marketers can do today is leave it for later.”
Over the next year, the ad industry will have time to work on new privacy solutions — whether or not they are developed by Google — as it prepares for a future without cooks. And in the short term, marketers will have to decide whether they will continue to rely on the content and commercial games they used to get data from first responders when the deadline was even closer.
The tech giant’s June 24 announcement was called a responsible, right decision and good news by numerous experts who shared their email comments with Marketing Dive. It also definitively confirmed what many experts had expected: that Google’s initial deadline for cookies would have to be delayed due to a variety of technical factors – not to mention renewed interest from regulators and antitrust authorities in the United States, the United Kingdom and the EU in how Google handles its advertising business, which may have made the company cautious about taking such an important step.
In January, Google began backing its Federated Cohort Learning (FLoC) proposal, claiming that advertisers could expect at least 95% of the conversions per dollar spent they now get with cookie-based advertising, a claim that has caused skepticism in the industry. As the name implies, FLoC uses cohorts of consumers rather than individual tracking, an approach that many advertisers and agencies find less relevant and effective for marketing purposes.
“Google may have extrapolated Facebook‘s problems to those it may face after devaluing third-party cookies and their impact on its revenue.”
Google recently hit a major roadblock when Amazon sites, including Amazon.com, WholeFoods.com and Zappos.com, began blocking FLoC, according to a Didigay report, which, according to Patrick O’Leary, founder and CEO of publishing CRM firm Boostr, “knocked the foot out” of the technology.
“Amazon is quickly displacing Google as the leader in product search with the best data on customer intent online. Without that data, the effectiveness of Google’s FLoC for targeting by purchase intent will be limited,” O’Leary said.
Amazon isn’t the only technology competitor that has made the privacy landscape more difficult for Google. Along with a host of upcoming privacy features announced at the Worldwide Developers Conference, Apple has finally made its mobile identifier for advertisers (IDFA) optional. The move has already disrupted the advertising business of major competitor Facebook and may have forced Google to rethink its timeline.
“Targeted retargeting on Facebook disappeared literally overnight. Google may have extrapolated Facebook’s problems to those it may face after the devaluation of third-party cookies, which will affect its revenue as a result,” said Udayan Bose, founder and CEO of digital agency NetElixir.
More time for privacy
As part of its announcement, Google set a new timeline for privacy changes. The new technologies will be rolled out at the end of next year, after which publishers and the advertising industry will be given a nine-month period to transition to the new services before a final three-month cookie phase-out that ends in late 2023. The timetable, which until now has been uncertain, will give the advertising industry a foundation and more time to build on the progress made over the past 18 months.
“Many ad technology vendors were so hasty to pounce on their cookie-less solutions and ended up with a lot of half-finished offerings…..
In that time, many cookie-free tracking technologies — including offerings from Verizon, Nielsen and Lotame — have emerged that have attracted partners from across the advertising, data and publishing industries. The Trade Desk’s Unified ID 2.0 has been a leader among these technologies because of its widespread adoption, but none of the solutions have been a win-win option.
“While dozens of proprietary identifiers based on email, registered users and other identifiers have emerged, many lack the scale or compatibility needed to be a viable alternative to cookies,” said Andre Swanston, CEO of Tru Optik, a data processing company that is part of TransUnion.
Google’s initial deadline may have contributed to a large number of solutions as companies rushed to fill the impending void. According to Oz Etzioni, CEO of personalization company Clinch, a longer deadline could help the industry work toward more robust, mature solutions that integrate the needs of creativity, strategy, A/B testing and more.
“Many ad tech vendors have been so quick to pounce on their cookiel-less solutions that they end up with a lot of half-finished products that can’t stand up to the reality of a cookiel-less world,” Etzioni said.
However, many experts cautioned the advertising industry not to rest on its laurels over the next 18 months by continuing to over-reliant on third-party cookies, which is inconsistent with the coming changes in privacy and consumer demands. According to Adswerve’s consumer privacy survey, 69% of respondents said control over the information collected about them is “extremely” important, with 39% uncomfortable sharing data with brands.
“If you leave cookies in the oven longer, they will only burn even more,” said Ann Hunter, vice president of product marketing for analytics platform DISQO. Cookies remain an imperfect measurement tool, and marketers should look for zero-input data sources to get a fully resolved and complete view of their consumers’ journeys.” Ultimately, over-reliance on cookies is fraught with a mismatch between brand goals and consumer values.”
What’s next for advertisers
Along with the development of cookie-free solutions, the changing data privacy landscape is prompting marketers to prioritize data collection — whether from the first or second party — through a variety of tactics. In the first half of 2021, this increasingly meant deploying content and e-commerce to help collect such data. It remains to be seen how Google’s delayed enforcement of the third-party cookie decision will affect these experiments in the second half of 2021 and beyond.
“We advise clients to continue to focus on building first-party data infrastructure through targeted targeting and content activation. H2’s strategies in this area will remain the same, and extending the deadline may attract more brands,” said Doug Grumet, senior vice president of media at AMP Agency.
The deadline extension will allow brands to test multiple approaches and assess the value of collected data before implementing it in 2023, and brands with limited first-party data infrastructure will get additional time to build their technology and data stacks in H2, Grumet explained.
“Although [dynamic creative optimization] campaigns will remain sufficient for some time as a result of the news from Google, the lesson remains that consumers are often anxious, distrustful and skeptical about how their personal data is used.”
The main lesson, however, remains that third-party cookies are a thing of the past, and that they were a flawed technology to begin with. Google’s decision could ultimately lead to better data, better campaigns and better results for brands.
“Brands have long relied on third-party cookie data because it was easy to collect, but as they realized during H1, it’s not the most effective way to make creative decisions and build relationships with consumers,” said James Donner, head of media strategy at Decoded Advertising, the agency that was acquired by S4 Capital in January.
“While [dynamic creative optimization] campaigns will remain sufficient for some time as a result of the news from Google, the lesson remains that consumers are often anxious, distrustful and skeptical about how their personal data is used,” he explained. “Our challenge is to help brands become more proactive in providing creative experiences where the benefits and impact of personal data are understood by consumers and they feel motivated to start that relationship.”