Ecommerce.co.za

This is how the cookies crumble

by Chris Tredger

In 2023, Google will no longer support third-party cookies on its Chrome browser. As Chrome accounts for 65% of browser use globally, according to StatCounter, the move signals a new era in digital marketing, advertising and browser engagement.

As cookiepro.com explains, third-party cookies are used extensively in online advertising to track consumer behaviour. They’re positioned on a website through a script or tag, and are accessible on any website that loads the third-party server’s code. They’re designed to help marketers engage directly with prospective customers.

Global digital marketing specialist Incubeta says while useful for ad targeting, there’s no doubt that third party cookies are invasive, deny consent and slow down the browsing experience.

For many concerned about their privacy, the company adds, the sooner third-party cookies are killed off, the better. With cookies being phased out, the days of marketers being able to exploit this technique as a strategic advertising tool are also numbered.

According to the search giant, the current approach to digital advertising is built on legacy tech from 1994. Starting in mid-2023, the process to phase out cookies will take place over a three-month period. It was initially scheduled for 2022, but Google has confirmed it will be pushed out by a year.

Google argues the change is all about establishing a healthy advertising system. Cynics argue it is a self-serving move that will keep the search giant in the driving seat. Jerry Dischler, Google’s VP and GM for advertising, wrote in a blog post that a healthy ad system is critical to keeping the internet open and accessible, but it’s vital that people feel safe when online.

“Now is the time for our industry to rethink our practices and take bold action to regain people’s trust. That’s a key reason why we announced earlier this year that we won’t build alternate identifiers once third-party cookies are phased out. The good news is that it’s possible to improve privacy while still delivering business results,” wrote Dischler on the Google Ads & Commerce Blog. “We’re collaborating with the web community to build solutions like those in the Privacy Sandbox. It’s an open-source initiative to develop new technologies centred on privacy techniques like anonymisation, aggregation and on-device processing designed to support key advertising use cases such as interest-based ads, measurement and more.”

Consent-based advertising

Google is pushing ahead with its Privacy Sandbox initiative, which proposes a new way to show ads that don’t rely on cookies to track the sites that a browser visits or products viewed.

Gartner predicts that marketers will have to focus on ‘consent-based advertising’, which includes overhauling playbooks, resetting measurement and re-evaluating ad spend on Google.

“News of the delay will certainly be welcomed across the board, giving publishers, advertisers and agencies alike an opportunity to better understand Google’s Privacy Sandbox and adopt workarounds,” says Jade Arenstein, head of data strategy and analytics at Incubeta. Arnstein says that the delayed phase-out is because advertisers weren’t ready to engage with the Privacy Sandbox. The delay also affords regulators time to ensure the change is not anti-competitive. And concerns around Google’s motivations already exist.

Koffi Kouakou, Africa analyst and senior research fellow at the Centre for Africa China Studies at the University of Johannesburg, says that while privacy is a growing concern, Google is using this issue to cement its position.

“There’s no way Google is going to lose advertising revenue.”

Of course, Google disagrees. A company spokesperson tells Brainstorm: “The Privacy Sandbox innovations are open-sourced, free to use, and being developed in collaboration with the ad industry. We‘ve also publicly said that we will be using the proposals from the Privacy Sandbox – the same as the rest of the industry – when third-party cookies are deprecated.

“Our commitments make clear that, as the Privacy Sandbox proposals are developed and implemented, that work will not give preferential treatment or advantage to Google’s advertising products or to Google’s own sites.”

But Kouakou believes marketers face a tough road ahead. “Google isn’t happy that third-party marketers have made more money, which eats at Google’s bottom line, so it has found a way to justify phasing them out by using the notion of privacy.” But Google is adamant that the move is necessary because third-party cookies are being used far beyond their original intent.

It says 72% of people feel that almost everything they do online is being tracked by advertisers, technology firms or other companies, and 81% say the potential risks they face because of data collection can outweigh benefits.

Google’s spokesperson says: “To end cross-site tracking, the web needs to move away from third-party cookies and other covert techniques, such as browser fingerprinting. But over the last 30-plus years, many core web capabilities have also come to rely on these same techniques. We don’t want the web to lose critical capabilities, such as enabling publishers to keep growing their businesses and keep the web sustainable.”

The company adds that recent studies have shown that when advertising is made less relevant by removing cookies, funding for publishers falls by 52% on average.

Some other browsers have attempted to address this problem, but, without an agreed set of standards, attempts to improve user privacy are having unintended consequences.

“Large-scale blocking of cookies undermines people’s privacy by encouraging opaque techniques such as fingerprinting. With fingerprinting, developers have found ways to use tiny bits of information that vary between users, such as what device they have or what fonts they have installed to generate a unique identifier, which can then be used to match a user across websites. Unlike cookies, users can’t clear their fingerprint, and therefore can’t control how their information is collected. We think this subverts user choice and is wrong,” Google adds.

Brands not hanging about

According to Incubeta’s Arenstein, many local brands aren’t taking a wait-and-see approach. “We’ve prepared three proposals in the last two weeks from some of our biggest retailers that are looking for help to optimise their online and offline data. All of them have seen the importance of this work and are looking to build data lakes in an effort to use their offline data online.”

Incubeta is also advising clients that contextual rather than demographic audiences will be the future focus and strategies will need to shift to reflect this.

Says Johan Walters, lead tech consultant at Incubeta: “Brands will need to reconsider their reliance on Google audiences in the upper sales funnel and invest their efforts in first-party data strategies and the opportunities this will unlock.”

Kouakou says marketers have virtually no choice but to adapt, because, technically, Google calls the shots.

“Google has the power to imprint the governance of advertising on the internet, which it has done. The nexus to be kept in mind, on the adaption by marketers, is profit, power and privacy. The key thing about the power of Google is that it has done a great job at being the biggest intermediary gorilla on the internet, and it has cornered the advertising market for close to two decades. In 2020, Google made $147 billion in advertising revenue.”

He says the Privacy Sandbox concept doesn’t hold water because it’s consumers themselves that will ultimately control the security of their privacy, rather than a developed solution.

According to Incubeta, companies will need to rely on their websites to help them in the cookieless future.

Arenstein says: “Our advice has always been to build out websites, so they’re capable of tracking a similar level of data to what you’re getting from third-party cookies. In fact, brands should be using their websites as data powerhouses irrespective of when Google makes its changes. You may not have the same reach, but you still have access to valuable information.”

Google maintains that it has focused efforts on designing and developing its APIs in a way that would minimise any adverse impact resulting from the third-party cookie removal.

Ultimately, despite some delays, marketers will have to adjust or fall behind.

WHAT COOKIELESS ADVERTISING WILL LOOK LIKE

  • Marketers will have to adapt to Google’s changes and become innovative to find a replacement to third-party cookies. They can opt to work with Google and piggyback on the Privacy Sandbox, or break away and develop alternative solutions to generate advertising revenue.
  • A nexus of power, profit and privacy is a powerful mix to keep in mind and advertisers are considering this.
  • Koffi Kouakou of the Centre for Africa China Studies at the University of Johannesburg believes advertisers won’t be able to unite against Google, but more work could be done towards an alternative ‘web’.
  • Websites will become even more critical to the marketing function.
  • Gartner warns of the need to: - reset measurement baselines, invest in market research and lock in key resources - develop a strategy to navigate the overlapping, cascading effects of identity and privacy changes from Google.

Republished with permission from ITWeb Limited

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