Google's New Approach: What Does the Retention of Third-party Cookies Mean?

In July 2024, Google announced on its blog that it would no longer (at least for now) remove third-party cookies from its Chrome browser as originally planned.

Instead, Google plans to give users more control over their browsing data and allow them to make and change informed choices during their browsing sessions. This decision marks a significant shift in Google's privacy strategy and reflects the company's desire to balance privacy protection and the needs of the advertising industry.

Why Did Google Change Its Approach?

Google's decision to change its original plan to remove third-party cookies stemmed from several key reasons:

Regulatory Concerns: Google has been in close discussions with regulatory authorities, such as the UK's Competition and Markets Authority (CMA) and the Information Commissioner's Office (ICO). Regulators expressed concerns that removing third-party cookies could limit competition and harm the advertising ecosystem, potentially strengthening Google's market position.

Privacy Issues: The original plan aimed to enhance user privacy, but Google realised this change required more careful consideration and phased implementation. The company focused on giving users more control over their browsing data and developing new privacy settings, such as IP protection in Incognito mode.

Industry Feedback: The advertising industry has expressed significant concerns about removing third-party cookies. Many publishers have been preparing for this change for years, and removing cookies could have significantly impacted their business. Industry players were also worried that alternative technologies were not yet sufficiently developed to replace the functionality and accuracy of cookies in targeting and measuring ads.

What Challenges and Concerns Does the New Approach Face?

Google's new approach faces several challenges and concerns. Protecting privacy remains a significant concern, as users need to make complex decisions about managing their data, which can be confusing.

The advertising industry is worried about the impact of new privacy settings on ad effectiveness and targeting because new Privacy Sandbox solutions may not be as precise or performant as third-party cookies. Regulators, like the CMA and ICO, have also expressed concerns that Google's new approach could still strengthen its market position and weaken competition.

What’s Next? What Does the Future of Digital Advertising Look Like?

Google plans to continue developing the Privacy Sandbox interfaces, improving privacy protection and usability with new APIs and privacy settings, such as IP protection.

In the future, users are expected to have more control over their data, which can enhance trust in online services and advertising. Privacy Sandbox aims to develop effective and privacy-respecting ad technologies that enable ad targeting and measurement without compromising user privacy. This could create new business opportunities and challenges for publishers as the digital advertising ecosystem evolves and adapts to new requirements and technological innovations.

Privacy Sandbox is expected to offer solutions that balance privacy protection and ad effectiveness. Google aims to collaborate with regulators and industry players to ensure the new practices are transparent and competitive.

Over the coming years, the digital advertising ecosystem will likely see significant changes as new technologies are adopted and industry players adapt to evolving regulatory and privacy requirements. Continuous development requires publishers to be flexible and ready to adopt new methods and technologies that respect user privacy while improving ad targeting accuracy.

What Should Publishers Do Now?

Publishers should continue preparing to target and measure advertising without third-party cookies, as more users may block cookies when they gain more control over their data. Here are some concrete steps:

• Leverage Privacy Sandbox Options: Google’s Privacy Sandbox offers several APIs, such as Topics API and Protected Audience API, that enable ad targeting and measurement without third-party cookies. Publishers should explore and test these solutions.
• Develop First-Party Data: Collect and utilise more data directly from your users, such as newsletter subscribers or registered users. This helps replace third-party cookies and provides valuable ad targeting and measurement information.
• Invest in Contextual Advertising: Contextual advertising will become increasingly important based on the context of the content being viewed rather than personal user data. This approach does not require third-party cookies and can effectively reach target audiences.
• Focus on User Experience and Trust: Building and maintaining trust is crucial as users gain more control over their data. Clear and transparent communication about data collection and use and secure and privacy-respecting practices can enhance user experience and increase their willingness to share data.
• Stay Updated on Industry Developments and Regulations: The digital advertising ecosystem and related regulations continuously evolve. Stay informed about the latest changes and adapt to new requirements and practices.

By taking these steps, publishers can adapt to a future where third-party cookies will likely play a diminished role. They can also prepare for a scenario where users have more control over their data and effectively utilise new privacy-respecting technologies and advertising solutions. Keeping up with developments and preparing for changes will help maintain competitiveness and ensure business continuity in the evolving digital advertising landscape.