By Advertising Week’s Editorial Team
Google’s recent decision to maintain its use of third-party cookies on Chrome, rather than phasing them out as previously announced, has sent ripples through the industry. This U-turn — like many of the tech giant’s decisions — has highlighted the complexities and dependencies within the digital ecosystem. To delve deeper into the implications of this decision, we spoke with Madi Bachar, VP of Global Sales at MGID, who offers an insider’s perspective on Google’s motivations, the reactions from advertisers, and the broader impact on publishers and the advertising industry at large.
Q: Were you surprised by Google’s decision not to deprecate cookies?
Madi Bachar: No, not at all. I didn’t believe that they would come out and just say that we are not going to deprecate the cookie. But I knew, as did whoever has been following this, that Google couldn’t find an alternative. Cookie-based data is the main revenue source for Google’s advertising business. So, when they couldn’t find a solid solution, I believed they were going to delay it for another year, another year, and keep on going like that. But it didn’t shock me when they announced they’re going to go ahead with cookies for now — though I am sure they will look very different from the cookies we are used to today. Judging from the vague details shared by Google, it’s likely the next iteration of third-party cookies will be governed by browser-level, user-governed consent management.
Q: What has been the reaction from the advertiser side?
Madi Bachar: When you talk to agencies and brands, nobody was really preparing for the deprecation of the cookie to begin with. Nobody was actually coming and saying, “Hey, this is happening.” It was more lip service, not actual actions, I wasn’t seeing companies getting prepared. So, the hit would be twofold if Google went ahead with deprecation, and I’m sure advertisers are breathing a sigh of relief.
Q: What does this decision mean for the future of the advertising industry?
Madi Bachar: We all know the phrase, “Man plans, and God laughs.” In our industry, it’s “Man plans, and Google laughs.” Google’s decision not to deprecate the cookie should be a wake-up call for everybody in the industry to stop relying on third-party solutions from big tech. Google can change their mind based on their bottom line, and they don’t really think about their partners in any way when it comes to money. It’s a lesson that we need to become more independent and develop different solutions outside of the cookie.
Look at the recent mess Google made of in-stream video, for example. Google updated its categorization of in-stream video and outstream videos based on IAB guidelines. Once they made that change, feedback from many video companies showed a drop of around 50% in revenue, which is generated mainly from Google. Now, they need to explain to advertisers that what they’ve been selling as in-stream video for the past 10 years is not actually in-stream video. This is a big problem because Google holds both ends, advertisers and the publishers, and it has led to a significant drop in revenue for companies reliant on Google as a main revenue source.
Q: What are the implications for publishers?
Madi Bachar: In the short term, they are going to win out of this because the advertising industry is still heavily reliant on cookies. More of their audience will remain addressable for longer, which will translate to more revenues. One reason Google is not deprecating the cookie is that they are afraid of the losses for publishers, which makes sense: the digital ecosystem is overwhelmingly Google-oriented.
In the longer term, publishers need to catch up on ad tech, an area where they tend to fall behind the other end of the supply chain. Naturally, their priority is content and editorial work but they need to understand, especially the big publishers, that they are part of the ad tech world, and so they need ad operation teams and technical staff. If they don’t take it into their own hands, something out of their control will impact their business massively.
We see this when Google makes changes to their search engine logic, which dramatically impacts the amount of visitors coming to the publishers’ websites. Publishers need to become more independent and self-reliant in data, including the cookie as one part of a broader strategy.
Q: What should publishers do to prepare for future changes?
Madi Bachar: Publishers need to build their own audience graph and work with their partners. Instead of being entirely reliant on these partners, they need to work with them, provide feedback, and develop their own solutions. Owning the data and managing it allows them to charge for it, decide what to show, and to whom. It’s an investment at the beginning, but it will create the extra revenue they need in the long term. Short term pain for long term gain, as they say.
Q: Is it fair to compare Google’s actions to Apple’s approach to privacy and data?
Madi Bachar: Everybody’s comparing it to Apple, but it’s not a real comparison because Apple was never in the game. They had nothing to lose by killing off the cookie; it wasn’t a revenue source for them anyway. In fact, killing it allowed them to develop their own, exclusive ad service, so it was win-win for them. For Google, it’s a whole different story, and they had to prove to regulators that Privacy Sandbox would be a viable replacement that didn’t exclusively serve their own interests. Apple may be embattled with regulators over their walled garden ecosystems, but on privacy they’ve always managed to stay ahead.
Q: Do you think it’s time for Google to be broken up?
Madi Bachar: If you asked me this question five, six years ago, I might have said yes. But breaking one conglomerate will just see another one pop up. It’s not healthy for any company to have that much power over so many verticals, but dealing with Google — where we know how they act and their interests — might be easier than breaking them up and facing a new, unknown company. So, yes, in a perfect world, Google shouldn’t have that much power, but in our world, it might be better to work with the devil you know.
So, I don’t see it happening. Instead of hoping Google gets its comeuppance, we need to educate the market that becoming independent and investing in their own ad tech is crucial. Easy money comes and easy money goes, but building a sustainable business model is the key for advertisers and publishers at the end of the day.
