Google’s announcement that it would not get rid of third-party cookies from its popular Chrome browser — after four years of promising to do so and numerous delays — was humorously described by adtech investor Ciaran O’Kane this week as “the adtech equivalent of Bobby Ewing miraculously reappearing alive in the shower after the ‘Dallas’ writers killed him off.”
But perhaps it’s more like the resurrection of Jon Snow in “Game of Thrones.” Violently murdered by his supposed brothers of the Night’s Watch, the return of the tragic protagonist offered a glimmer of hope in a series full of deception, darkness, and untimely deaths. But his second coming was anything but an idealistic or triumphant happy ending.
Much like Snow’s character arc, the neverending ending for the cookie could also turn out to be bittersweet.
Google’s announcement in March 2020 that it intended to kill off cookies was largely met with horror by the advertising community. The third-party cookie is the key foundation on which much of the online ad industry’s architecture was built — offering the ability to precisely target specific audiences and measure whether ad campaigns were having their desired effect.
With Chrome commanding around two-thirds of the browser market, adtech companies and publishers alike feared the death of the cookie would lead to catastrophic revenue drops despite the new “Privacy Sandbox” technology Google has been developing to replace them. Early industry testing of the Privacy Sandbox tools designed to emulate online targeting produced fairly dire results.
The initial response to Google canning its original cookie plan was, for the most part, relief.
Most adtech stocks rose up as the markets closed on Monday, with Criteo (+10.38%), Viant (+6.42%), and The Trade Desk (+4.61%) among the big movers.
But the Champagne may have been popped prematurely.
In its Monday blog post, Google said it intends to “introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time.”
There’s no further detail yet on what that’ll look like. But some in the ad industry wonder whether Google still intends to effectively deprecate cookies, this time under the veil of consumer choice by offering them a prompt.
There’s a recent precedent. Apple introduced AppTrackingTransparency in 2021, forcing app developers to ask users for permission before tracking them across other apps and websites. Unsurprisingly, many people opted out, making it more difficult for apps to monetize those users.
For many ad vendors and publishers, the worst-case scenario is that Google ostensibly keeps cookies alive while nearly every Chrome user swats them away. By some estimates, big platforms like Meta, YouTube, and Snap’s revenues were dented by billions in the first year of Apple’s privacy update. While opt-in rates have since improved, 44% of US Apple users ask apps not to track, according to April data from mobile marketing firm AppsFlyer.
A spokesperson for Google declined to comment for this article and referred BI to its blog post.
Google won’t escape regulatory scrutiny
It’s unclear whether keeping cookies would allow Google to shake off regulators’ grasp of its Privacy Sandbox. In 2022, Google pledged to give the UK’s Competition and Markets Authority oversight of its Privacy Sandbox rollout and Chrome cookie removal. The CMA has sought to ensure the Privacy Sandbox doesn’t distort competition in the online ad market, or favor Google’s own adtech, and that it gives users enough control over how their data is used.
A key question now is whether Google’s commitments to the CMA need to change now that third-party cookies remain in the mix. The cookie’s stay of execution might even sharpen regulators’ concerns.
A requirement to develop and maintain solutions for two parallel scenarios — an ad auction with third-party cookies or one using Privacy Sandbox technologies — would add extra cost and complexity for Google’s competitors. Regulatory interest may also be piqued over whether retaining third-party cookies while also running Privacy Sandbox tools exclusively within the Chrome browser gives Google’s adtech an advantageous position. And there isn’t a clear answer about the future governance of the Privacy Sandbox, to ensure Google doesn’t preference its own ad products.
In a statement released Monday, the CMA said it was working closely with the UK’s Information Commissioner’s Officer to consider Google’s announcement and was inviting views from the industry about its implications. The ICO, meanwhile, said it was “disappointed Google has changed its plans” and encouraged the digital advertising industry to move to more privacy-focused alternatives to third-party cookies.
We’ll see about that. In the advertising industrial complex, the evidence so far suggests the vast majority of companies wouldn’t give up third-party cookies until they are prized from their cold, dead hands. (Though pour one out for the companies whose entire existence is premised on demand for cookie alternatives.)
While the industry and regulators debate the theoretical outcomes, it’s hard to chalk this up as anything but a defeat for Google. The plan to reconstruct the fabric of the online advertising industry was an ambitious undertaking, both in terms of internal investment and in attempting to bring consumers, businesses, and regulators willingly along for the ride.
One ex-Googler calculated that the number of human hours devoted to overlapping internal meetings about cookie deprecation and Privacy Sandox over the past five years would reach the “tens of thousands.” They were granted anonymity to discuss internal operations.
“That’s not even the work itself; just the repetitive meetings with overlapping product, engineering, business, legal, policy, and communications staff,” the former Googler said. “It was also clear to anyone in those meetings that the company was too big, too matrixed, and too lumbering to make big decisions.”
And that’s likely the most conclusive takeaway from the crumbling cookie debacle. Google’s inability to get it over the line represents just the latest example of a tech-wunderkind-turned-dinosaur now so encumbered by groupthink and fear of regulation that it ends up in a state of agonizing limbo.
Much like the fate of the cookie itself.
