By Mohini Lakhani, Digital Account Director.
While progress over the years has been gradual, with many delays along the way, Google has pushed full steam ahead over the past few months to complete the much-anticipated transition. To test the waters of what privacy-safe environments could look like, on January 4th 2024, Google removed third-party cookies in 1% of Chrome browsers, equating to approximately 32m of an estimated 3.22bn global users (Digiday, 2024).
Following this, they are now in the hands of the UK’s antitrust watchdog, the Competition and Markets Authority (CMA), which is rigorously testing the PSB APIs. If these do pose viable alternatives to the third-party cookie across all three advertising pillars (targeting, measurement and reporting) while ensuring user protection, then this will be rolled out to 100% of browsers as anticipated.
Initial feedback from CMA representatives released all but a few weeks ago warns that whilst Google has made gradual progress, there is still apprehension around the market dominance it is likely to achieve with the current set-up. They argue that this eases advertiser spending being flurried away into walled gardens that already house a host of first-party data and away from the open web. The CMA has stated that they need to be reassured that these proposals won’t put competitors at a disadvantage, and so have stressed that their concerns will need to be addressed before Google receives their consent to deprecate the third-party cookie in Chrome (The Register, 2024).
A task force at IAB Tech Lab also recently set up an open survey, requesting feedback on the PSB APIs from the wider industry. The initial apprehension from media buying agencies points to the limited capabilities of the PSB technologies to mirror lookalike modelling, frequency capping, and the vast majority of ad reporting and attribution, some of the fundamentals that encompass digital advertising (AdExchanger, 2024). This being said, Google has just disputed these claims, arguing that the PSB APIs weren’t ever intended to act as like-for-like alternatives to the third-party cookie (The Drum, 2024). What will come next in this public brawl? We will have to wait and see.
Amidst the feedback from the two bodies, advertisers across the broader industry are sceptical of whether the long-anticipated 100% rollout of third-party cookies is likely to go ahead this year. Alarmingly, the PSBs are not yet available to test in Google’s Demand Side Platform (DSP), Display & Video 360 (DV360), thought to hold the most market share, regardless of being led by separate teams to Google Chrome and Privacy Sandbox (AdWeek, 2024). Despite this, Google continue to hold confidently firm on their timeline.
The time to act was yesterday.
The present-day internet is approximately 60% cookieless, thanks to Safari and Firefox’s combined browser market share and users actively blocking cookies or rejecting cookie consent banners on Google Chrome (Quantcast, 2022).
With the latest timeline, Google will realistically find itself on a slippery slope in the coming months, with mounting pressure from regulatory bodies to develop their PSBs to a standard that meets user privacy requirements and acts as a viable alternative to third-party cookies for advertising practices.
In addition, the proposed timing of the culling of the third-party cookie looks to interfere with some of this year’s biggest advertising spending moments, such as the Olympics and Euros. The IPA Bellwether Q4 2023 report also highlighted that UK ad spend was the strongest it has been in a decade, and this Q4 trend is expected to continue in coming years.
Given these anticipated spending hikes, Google may want to tread carefully about their proposed timings, as any delay in the decision from the CMA threatens to seep into this peak period, an unideal time to be stepping into somewhat unchartered territory. There is thought that we could see yet another delay, even to early next year, though this, of course, is by no means guaranteed, and all comes at the discretion of and approval from the CMA.
A shift from pragmatism to proactivity.
Advertisers can no longer take a pragmatic approach, and it is time to change conditioned behaviour on overreliance on third-party cookies. The culling of third-party cookies will fundamentally implicate the effectiveness of marketing and proving the attributable financial return to senior stakeholders or investors will become inevitably harder. Advertisers must make a conscious and concerted effort to adopt and embrace the upcoming changes now to see the lowest impact when the time does come.
At The Kite Factory, we have seen green shoots across a multitude of cookeless alternatives that we have been exploring with clients, guided by industry-wide efforts. Stay tuned for the next instalment of our cookie-less series, where we will share our learnings and successful tests across the three advertising pillars.
To discuss how we can support your business to prepare for the deprecation of the third-party cookie, please get in touch.