The Online Advertising Industry Reacts To Chrome’s Cookie Deprecation Delay

the online advertising industry reacts to chromes cookie deprecation delayFollowing Google’s announcement on Thursday that Chrome would be delaying its third-party cookie phaseout by almost two years, the overwhelming sentiment across the industry is … relief.

Though agency, ad tech and programmatic publisher execs spun confident stories about plans for digital advertising without third-party cookies, that reality was more like a train rushing along an unfinished track, and everyone knew it would end in disaster – at least in terms of ad rates and performance – without such a reprieve.

By early next year, Google’s Privacy Sandbox, where developers can test replacements to cookie-based use cases, wasn’t going to be ready for the spotlight in time for the third-party cookie removal.

For public ad tech companies, that relief has shown up in trading. The Trade Desk, LiveRamp, PubMatic, Magnite and Criteo were each up by double-digit percentages after the news.

With more time, companies can do a number of things, respondents pointed out. They can actually test targeting and measurement replacements (while still having the safety net of third-party cookies). Publishers and brands will have more time to build out their first-party data assets. And they can deal with the more immediate identity challenge of Apple’s iOS changes.

The news isn’t all rosy: Some companies will likely procrastinate, kicking the can down the road. And nearly two years of additional delays brings uncertainty to the industry and could pause investment. Plus, identity companies that arose to meet the cookieless reality could see their future in jeopardy if prospective customers no longer see the urgency in acting.

AdExchanger spoke with executives across the ecosystem about their reactions to the news, and the prospects for replacing third-party cookies, with an extra 18 months to work on alternatives – until the middle to end of 2023.

the online advertising industry reacts to chromes cookie deprecation delay

AdExchanger: What was your first reaction to the news?

LOCH ROSE, Epsilon chief analytics officer: Well I wasn’t at all surprised. I don’t see what choice Google had given the fact that they hadn’t been able to launch FLoCs in the EU, and that FLEDGE has not launched at all. The original timeline was just not practical.

PAUL BANNISTER, CafeMedia chief strategy officer: I do believe Google legitimately wants to get rid of cookies and move to a more private web. But there certainly have been challenges with some parts of Privacy Sandbox like FLoC and GDPR compliance, or FLEDGE not moving as fast as they want. I know I expected a delay, but I didn’t think it would be two years.

MATT BARASH, Zeotap SVP global publishing and platform partnerships: It’s not a massive surprise because, ultimately, the industry was ill-prepared. Google is demonstrating, perhaps for the first time, that they don’t have all their ducks in a row in the effort to roll this out. They hadn’t even really entered Europe in terms of testing. That’s a huge and complex market where the go-to-market plan just doesn’t exist yet.

Is the delay unfair to companies that have been working hard to transition from third-party cookies and actively engage with the Privacy Sandbox proposals?

LUKASZ WLODARCZYK, RTB House director of global inventory partnerships: Since January 2020, we have put every effort into making our platform fully compatible with the Privacy Sandbox vision. We recently hit a milestone: the first DSP to successfully test and use the FLEDGE simulation. However, today’s update from Google regarding the timeline for Privacy Sandbox milestones is one that we see as a positive move. It gives a more realistic timeline for other market participants.

TODD PARSONS, Criteo Chief Product Officer: We’ve been at the forefront of the Privacy Sandbox discussions, and even have a bird of our own (a reference to the bird-named proposals in the Sandbox). But we, like most others I suspect, are breathing a little bit easier.

We’ve been ahead of this, but the origin trials and FLoC trials are so early, there’s not enough to be able to intelligently say how and whether these solutions will work. If we can’t get a data sample that’s [large] enough to actually run tests against and start showing success criteria, then we’re certainly not going to ship it. The relief is that we can now be methodical about testing solutions and bringing them to the ecosystem without it feeling forced.

BANNISTER: I think this is a mixed blessing. On the one hand, it defers fears of Armageddon. But on the other hand it lengthens this period of uncertainty. I was starting to feel that Sandbox proposals might actually work, so am very curious to understand Google’s rationale. A lot of people in ad tech have been moving too slowly here. The Privacy Sandbox (or something like it) has to be a major part of the future of digital advertising. Deferring working on that future is bad.

JAMES ROSEWELL, CEO of 51degrees: People have been working hard against the deadline, but to transition to what? The “what” is vaporware. There are discussions in the W3C, and trials of things like FLoC that don’t really work. Everyone has been working hard attending meetings and occasionally having a genuine debate. But there’s nothing of substance.

Will there still be momentum to test and adopt new privacy technologies after this delay?

NICHOLAS FLOOD, Future global commercial operations director: In the past few months, I’ve definitely seen an uptick of these agency and big client discussions where people are starting to really address trading in cookieless environments. Publishers have the opportunity to move [forward with] those clients and still push on with their first-party audience approach.

PARSONS: Advertisers are still going to spend on cookie-based audiences until the last moment they can. But I think there’s sufficient pressure from other data deprecations to propel us forward, instead of the usual kicking the can down the road. Apple has been merciless, for example, about keeping this issue in the news and in taking one action after the next to limit other companies’ data-driven advertising.

AARON GROTE, Stirista senior director of identity and attribution products: Google delaying the deprecation of third-party cookies in Chrome will halt most of the work happening on both the buy and sell sides to develop new products and practices for targeting and measuring media… Google’s announcement implied that their hands are tied by antitrust regulators. A lot of companies will read into that and decide it’s too risky to make investments in technology and processes that may get regulated away in a couple years.

ALEX STEER, Wunderman Thompson global chief data officer: The changes to tracking across devices [is] driven by real consumer concern. Many brands, agencies and publishers are moving too slowly to adapt their performance marketing to these changes, and many of the so-called ‘cookieless’ tracking solutions rushed to market are still just new ways of following individuals around the web. Parts of our industry may breathe a temporary sigh of relief today, but third-party cookies are still a bad proxy for understanding customers.

TRAVIS CLINGER, LiveRamp SVP of addressability and ecosystem: We see this delay as good for the industry. But still, the message is very much to not to take their foot off the gas. The industry still needs to move full-speed ahead towards buying on people-based identity while we can still leverage the scale of third-party data to test new methods for things like frequency capping and measurement.

I’m an optimist, so I think the urgency is still there. if you act now, you’re going to be a lot better prepared than folks who delay, and are going to be scrambling in 2023.

What are the consequences of this delay and extension of third-party cookies for the ecosystem?

FLOOD: Well there are perhaps hundreds of ID companies out there that based their go-to-market on Google announcements. As this news filters down, it wouldn’t surprise me if many of those vanish. There just isn’t the cash moving through those systems on the buy side yet, so pushing back another couple years could come with a stark realization for some of those ID companies.

BARASH: This allows publishers a window of opportunity to reinvent themselves. Not just scramble to reinvent themselves, but to come off of the posturing and move to more of a true testing mode.

The industry was on the precipice of potential capitulation on things like measurement and attribution. After 10-plus years of having fairly good optics into digital advertising, we were looking at a situation in a year where agencies and marketers are flying blind. This at least creates business continuity for the foreseeable future. That’s a win for independent ad tech.

CLINGER: This is an opportunity for open web publishers to gain authentications. Many publishers have authentication rates [the percent of site visitors who are logged in or agree to share their email address] below where they’d like to be.

NICOLE LESKO, Meredith Digital COO: The immediate net result is that this will help publishers maintain CPM stability for the next couple of years and quell some of the more immediate concerns around readiness.. We should take advantage of the gift of time to develop solutions that address the necessary use cases in a privacy-compliant, user transparent way.

While we will not take our foot off the cookieless gas, this does enable us to dig deeper into Apple’s upcoming iOS15 changes, which could pose more widespread revenue risks than open CPMs.

ROSE: Third-party cookies are important to have around for experimentation. This announcement means advertisers can directly compare third-party cookie buying to alternatives for the next year or two. From the agency perspective, without that, the industry was rushing toward a certain disaster.

Related posts

Follow by Email