How the Google Cookie (won't) Crumble

After a lot of back and forth, Google has decided to stick with third-party cookies in its Chrome browser, instead of phasing them out as originally planned. Turns out, all the buzz over the years wasn’t for nothing—the ad industry’s concerns have finally been acknowledged.

Google Cookie

In an announcement earlier this week, Google shared its “updated approach,” saying it won’t be getting rid of third-party cookies just yet. Instead, they’re introducing a new feature in Chrome that lets users decide how their data is used, with the option to change those settings anytime.

Google is already talking to regulators like the U.K.’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO) about this new direction, and they plan to have similar conversations with industry players soon. But for now, details on what this actually means are still vague, and there’s no set timeline—probably a lesson learned from all the delays in Google’s cookie-killing plans.

Anthony Chavez, VP of Privacy Sandbox, said it’s still important to create privacy-friendly options for developers. Google will keep investing in the Privacy Sandbox APIs to improve both privacy and utility, so if you’ve been working on cookie alternatives, don’t worry—your efforts won’t go to waste. They’re also adding new privacy features, like IP Protection for Incognito mode, to the Sandbox.

Chavez made it clear that the goal of the Privacy Sandbox is to find ways to improve privacy online while keeping the ad-supported internet alive, which helps publishers and businesses connect with customers and allows people to access free content. So yeah, the Sandbox isn’t going anywhere anytime soon.

This might actually be a good thing if Google can get people to opt out of third-party cookies. If more users choose not to use cookies, the Sandbox APIs could end up being a solid way to target ads without cookies. But that’s still a big “if,” considering the technical hiccups the Sandbox has right now.

If it works out, it would be similar to what Apple did a few years ago with App Tracking Transparency, which lets users choose whether or not to share their data with apps. But, as we’ve learned from the whole third-party cookie saga, the ad industry should expect the unexpected.

In the meantime, Google will likely go all-in promoting the Sandbox. Their decision to keep third-party cookies around came alongside an announcement about how well their alternative tests performed earlier this year.

The results were promising:

• Scale Recovery: Google Display Ads saw an 89% recovery in advertiser spend, and Display & Video 360 recovered 86%.

  
  

• Return on Investment (ROI): Conversions per dollar recovered 97% in Google Display Ads and 95% in Display & Video 360.

  
  

• Remarketing Recovery: Google Ads saw a 55% recovery in advertiser spend, and Display & Video 360 saw a 49% recovery, with better results when remarketing was combined with other strategies.

These early results suggest that Privacy Sandbox technologies could help recover ad performance even without third-party cookies. But it’s still too early to celebrate—there’s a lot more work to be done, and Google knows it, especially with feedback pouring in from the ad industry and regulators like the CMA.

Still, knowing that the Privacy Sandbox isn’t the only option for dealing with third-party cookie issues might give some relief to ad execs, who have been wondering how this will all shake out.

Since Google first announced its plan to ditch third-party cookies in Chrome four years ago, things have gotten complicated as they try to balance privacy concerns with keeping ad performance and revenue intact. Publishers, in particular, have been struggling to figure out what this means for their business.

Testing the Sandbox has been limited—only about 1% of Chrome users were involved—so publishers haven’t been able to get clear insights into how well it works. After Google delayed the cookie deprecation again, many publishers stopped putting resources into testing the Sandbox altogether.

Some, like Criteo and Index Exchange, continued larger-scale tests, but when the results came in, publishers realized it wasn’t worth the effort. By July, Criteo reported that publisher adoption of the Privacy Sandbox was below 55%, and it wasn’t expected to grow anytime soon. Concerns about slow loading times and lower ad revenue were some of the main issues publishers had with the Sandbox.

“We completely pulled back from testing the Privacy Sandbox after they pushed the timeline on getting rid of cookies,” said Justin Wohl, CRO of Snopes and TV Tropes, explaining that it just wasn’t feasible for smaller publishers to keep spending time or money on it right now.