By Geoffroy Martin, CEO at Ogury
To those in the digital advertising industry, another twist in the tale of the cookie deprecation was not unexpected. But that Google would seemingly renounce its promise to cut off these third-party identifiers all together, was abrupt to say the least.
Whether advertisers have been diligently planning for the deprecation of cookies since it was first announced in January 2020 or if they have been skeptical it would ever happen, this latest decision seemed, on the surface, like a drastic shift in direction from the tech giant – especially judging by many of the headlines.
The reality of the move is very different. Google is not abandoning third-party IDs all together, but is, in many ways, accelerating their irrelevancy in the future of modern advertising and audience addressability.
Diminishing third-party data for the greater good
Google’s statement certainly shifted the goal posts, but it also contained one key detail that signals the continued direction of travel that the industry should have been preparing for. It states that while third-party identifiers are not disappearing, users will be given the choice of whether to accept them or not, at a browser level.
This isn’t just a future problem – this is happening now. Already half of the open internet is cookieless in part due to Safari and Firefox already phasing them out. Similarly, since Apple instigated its App Tracking Transparency option, only 34% of iOS users worldwide have opted-in to being tracked in-app.
Even on Chrome, the pool of users who accept cookies is already dwindling. In the EU, where the General Data Protection Regulation (GDPR) ruling has been in place since 2018, 36% of users prevent or limit tracking by identifiers on every device. Similarly in the US, 86% of shoppers stated they were more concerned about their data privacy than the state of the economy.
Factor in the increasing use of VPNs and other ad blockers, and it’s clear that the pool of user reachable data via identifiers is rapidly diminishing. The increasingly privacy-focussed digital landscape is clearly not being driven by tech companies or lawmakers, but by consumers themselves. While Google has given us little insight into exactly how users will be able to opt-out of cookies, it’s clear that many of them will.
This in turn leads to shrinking addressability on the open web, driving up the cost of impressions for advertisers sticking to this method of targeting. None should be seeing this announcement as a time to sit back. It is a wake up call that should shake the inertia from all industry players, in turn accelerating the demise of these identifiers.
The continued path to data privacy
In many ways, the shift towards a more privacy secure internet has created a classic Innovator’s Dilemma. Many of adtech’s largest operators have been built upon third-party identifiers, and with no clear alternative emerging, have seen little incentive to shift.
At the same time, however, many have pioneered new approaches that put privacy at the heart of targeting solutions. It is those who have looked to adapt to this change early that will see long-term success in the future digital landscape. Companies that fail to recognise the direction of travel risk significant market share and revenue losses.
Many of those still clinging onto third-party data, have done so due to the limitations they have found in other available solutions. Businesses that tested Google’s Privacy Sandbox felt obstructed by the various challenges and use cases APIs couldn’t cover, while advertisers who tested solutions such as alternative IDs have seen their limitations in terms of scale. However, it would be a mistake to believe that these are the only alternatives available, and those who continue to test and embrace more innovative solutions – such as zero-party data – will find themselves in a stronger long-term position.
Our industry is at a decisive turning point in the protection of consumer data. What is clear is that it is pointless to cling to a model that is doomed to disappear. This should not be seen as a chance to postpone the move to ID-less solutions – instead, this should put into sharper focus the need to invest in tested and proven targeting solutions that can achieve scale, independently of future industry decisions.
For players who already anticipated the deprecation of advertising identifiers, this news is a positive sign. It will help to shake off inertia surrounding the shift away from third-party identifiers, and instead accelerate this change. Consumer privacy must be the priority for our industry; we must not turn a blind eye, or wait for other industry players to make those decisions for us.
