Suraj Barnawal, Chief Innovation and Technology Officer at Together explores the implications of Google's decision to delay the deprecation of third-party cookies in Chrome. This article provides insights into how businesses can continue to navigate the privacy-first landscape by strengthening first-party data practices, adopting privacy-safe measurement strategies, and leveraging AI-powered solutions. Read more to discover how these changes could impact your marketing strategies and what steps you should take next.

Executive summary

On 22 July 2024, Google announced it would not deprecate third-party cookies as initially planned. Instead, Chrome users will be able to adjust their tracking preferences individually.

While this delay reprieves the industry, our advice to businesses remains consistent: move forward with privacy-first strategies by developing robust first-party data practices, adopting a more privacy-safe measurement strategy, and investing in applied and transparent AI-powered solutions.

While the third-party cookie may not be crumbling, it's stale and well past it's use by date, so keep moving forwards with better privacy-centric solutions

Context

Over the years, the advertising ecosystem has undergone significant changes, with growing awareness and concern among consumers on how Big Tech companies collect, use, and share their data for 1:1 precision targeting, deterministic campaign measurement, and fingerprinting. Third-party cookies, which track users across different websites without explicit consent, have been at the centre of these privacy concerns.

What’s in a name: Third and first-party cookies

First, what the cookie is: Cookies have been a fundamental part of the web for nearly three decades. A cookie is a small file that captures a bit of data from a website you visit and stores it on your browser. If the website supports tracking code from that third-party domain, it can then help to track and target you across the website. As cookies carry some privacy risks, it is common practice to ask people to consent to allow cookies. (See Table 1 to differentiate between first-party and third-party cookies.)

Third-party cookies can be used to track your website activities. Sites have also used them to support a range of online experiences—like helping you log in or showing you relevant ads. Websites are necessary on the modern Internet but must be better understood, as they have also gained a bad reputation. This information can help companies and their advertising partners offer personalized user experiences. In addition to site owners, third parties can access specific data, such as targeted advertising.

Table 1. The differences between Third and first-party cookies

Today: The Privacy-First Journey

We've been moving towards privacy-first for some time

Around 2017, Safari Introduced Intelligent Tracking Prevention (ITP), followed next year by Firefox launching Enhanced Tracking Protection (ETP), which aimed to reduce cross-site tracking by limiting the use of cookies and enhancing user privacy.

In 2019, the most widely used browser, Google Chrome, introduced its Privacy Sandbox initiative to phase out third-party cookies by 2024 in response to growing regulatory pressure, global laws, and similar data protection mandates while ensuring the sustainability of the digital advertising ecosystem.

Figure 1. The evolution of privacy-first initiatives for user web experience.

Fast forward to January 2024, Google began rolling out a new Tracking Protection feature, which restricts third-party cookies by default for 1% of Chrome users globally. This move was ultimately perceived as the first step towards cookie depreciation.

The Tracking protection trial was essential for testing their new Privacy Sandbox features and their effectiveness, gathering feedback, and making necessary adjustments before implementing the changes on a larger scale. Around the same time, some results were released from Google testing ads in Privacy Sandbox vs. third-party cookies.

This early testing of Privacy Sandbox APIs and other first-party signals, such as publisher first-party data and identifiers, were designed to compare their efficacy versus third party cookies. They showed that the Privacy Sandbox APIs created an incremental 13% uplift for publishers on Google Ads Manager and a 3% uplift for publishers on Google AdSense.

However, concerns about the readiness and effectiveness of this Privacy Sandbox solution prompted further delays. Google has seen a backlash against the initial testing of tracking protection features highlighting significant concerns around privacy, transparency, competitive practices, and technical implementation. Navigating regulatory pressures across both privacy and competition has been challenging.

The end of the road

After four years of announcements, delays, and battles with regulators, ad tech rivals, and advertisers, Google reversed its long-held ambition to remove third-party cookies from Chrome. Instead of saying goodbye to third-party cookies, Google announced in a blog post that it would introduce a new browser experience, allowing users to make informed choices that apply across their web browsing and adjust that choice at any time.

Tomorrow: What will happen next

Google's latest move doesn't signify a step back in prioritizing consumer privacy. Instead, it emphasizes giving users more individual control over their data. Apple's App Tracking Transparency (ATT) framework, which rolled out in 2021, requires mobile apps on iOS to request permission to track users’ devices explicitly. Consumers will be given a more prominent opt-in/opt-out choice within Chrome.

Choosing "Allow all cookies" or "Block third-party cookies

According to Google, the functionality of managing third-party cookies, including opt-in/opt-out, already exists within the browser’s settings but will be surfaced in a “new experience” like Apple (ATT).

Google Chrome's "Informed Choices" initiative is a significant step towards enhancing user privacy and transparency on the web. While the exact launch date has not been announced, the initiative is expected to be rolled out in phases alongside the Privacy Sandbox features. By providing clearer information and simplified controls, Google aims to empower users to make informed decisions about their data.

What does this mean for the advertising and marketing industry?

The industry has seen this scenario play out in the past, and the data shows the impact will still be significant, if a little more gradual than the "turn 3PD cookies off" scenario.

Based on the effects of Apple’s ATT rollout, we’d expect Chrome cookies to capture between 15% and 20% of the third-party cookie universe if they continue to exist when users opt-out. The pool of users who can be tracked via cookies is decreasing and will continue to be depleted.

In short, both the regulatory landscape and consumer demand for greater data control led us here.

Together: What you should do now

The message over the last 3 years has been clear: take greater control of your marketing in a privacy-first landscape that's only heading in one direction. This means:

  • Strengthen your data infrastructure and technology roadmap to build a first-party data pool through clear communications around consent, usage, and data governance. All businesses must develop a first-party data strategy that includes first-party cookie data typically residing in GA4, including collection, evergreen storage, analysis, and activation.
  • Modelled measurement that can help you see a representative view of performance across channels despite technology limitations and improves automated bidding performance. Solutions such as Media Mix Modelling are having a renaissance for a good reason.
  • Turn to the right signals that fuel cookieless personalization by optimizing for Business goals rather than platform-based optimization and attribution.

In summary, Brands should see this as an opportunity to stay ahead of the curve by continuing to invest in first-party data practices, consent management, and alternative measurement solutions. For advisory and execution support on implementing a privacy roadmap, Together is ready to help.

More info on the Chrome Update: -

Blog to Read More , Privacy Sandbox , core advertising APIs 
Tracking Protection , Safari Introduced Intelligent Tracking Prevention (ITP), Firefox Introduced Enhanced Tracking Protection, Apple's App Tracking Transparency (ATT) framework

Source: Suraj Barnawal, 8 August 2024