Necessity breeds innovation, but what happens when forced innovation feeds frustration?
After a two-year delay, when Google finally started phasing out third party cookies, it is now being asked to “unroll” the cookie deprecation by Interactive Advertising Bureau (IAB) Tech Labs and The Competition and Markets Authority (CMA).
How does this impact the industry? What does this mean for marketing attribution software? Are thought leaders rolling their eyes at this, or are they rolling with the punches?
In times when businesses are executing post-pandemic over-corrections through mass layoffs and slashed marketing budgets, Google’s recent plans invite unpredicted burdens of retooling costs, operational efficiencies, as well as legal liabilities.
TL;DR: As Google plans to phase out the third-party cookie in the second half of 2024, it faces resistance from authorities like IAB TechLabs and CMA.
However, the industry considers this a concrete win for a privacy-first future. Google's clarifications mention that it will not create an alternative to the 3P cookie simply because it will defeat the purpose of deprecating third-party cookie tracking.
IAB Tech Labs, a non-profit research & development consortium, and the UK’s Competition and Markets Authority (CMA) have been closely investigating Google’s Privacy practices since 2019. The bodies are lashing out due to the threat of brand safety, measurement, data loss, anti-competitive concerns, and a greater need to clarify Google’s commitments toward a privacy-first future.
According to IAB’s report, the programmatic advertising ecosystem processes millions of auction queries per second, which amounts to billions of daily transactions. Google has failed to disclose the spectrum of new services and infrastructure that publishers, DSPs, and SSPs, will need to adopt, further threatening the AdTech industry’s growth.
IAB’s Privacy Sandbox Task Force assessed 45 use cases on five pillars – audience management, auction dynamics, creative delivery and rendering, reporting, and interoperability – in which it raised specific questions:
CMA has highlighted its concerns around Google tipping the scales in its favor and has stated “that the level of granularity of the taxonomy may have an impact on the utility of the API for publishers and advertisers and on publishers’ first-party data strategies.”
CMA demands Google to transfer the Topics API, which fuels interest-based advertising (IBA), to ensure it isn’t creating an unfair advantage due to its +3.5 billion user base.
While the commercial cost of retooling remains a mystery, it will push B2B and B2C, technologists, and agencies to re-strategize for continued success. Our industry experts highlighted emerging themes that will shape marketing performance and creativity.
The third-party cookie phase-out will hold businesses accountable for their marketing initiatives. Brands and marketers can expect an increase in creativity, nurturing the consumer community and rethinking technology’s contribution to engagement and attribution.
We interviewed three MartTech experts from leading tech providers, communications agencies, and Fortune 500 partner marketing services to get actionable advice for our readers.
“Google’s Privacy Sandbox Initiative and the death of third-party cookies rips the control out of brands’ hands when trying to reach consumers across the web.
The lack of control, transparency, and (potential) accuracy that Google’s Privacy Sandbox and cookie depreciation rollout exposes marketers and ad agencies to the whim of an evolving product. Marketers relying on digital ads will struggle to authentically and effectively reach the right consumers. ”
- Jonas Sickler, Digital Marketing Analyst, Terakeet
“Because I am more on the traditional 'branding' side of things, the change doesn't directly impact my day-to-day life. In fact, it moves a lot of marketers closer to how SEO and brand work organically.
I have a very contrarian outlook and look at the deprecation of a 'cookie first' world as the bill that is coming due."
- Mordy Oberstein, Head of SEO Brand, Wix
"[Brands] can pull in search intent insights, social media data, or market news.
This data should then be leveraged to create more personalized marketing campaigns that don’t rely on third-party cookies.
- Jonas Sickler, Digital Marketing Analyst, Terakeet
"With AI tools emerging to make visual content creation easier for a wider breadth of marketers. Visual storytelling, first-party data, and contextual advertising on various platforms or publications will drive success in this privacy-first, post-cookie world.
The graphics and videos that consumer-facing and enterprise-minded marketers will soon be able to create will be game-changing, and brands that carefully commit to AI-driven content excellence will be pack leaders."
- Chris Heine, Sr. Director, Content & Media Strategy, Mission North
“Brands are going to have to rethink their mindset and approach. We've been addicted to data that was never really "ours" to the extent we thought. That's produced a mindset that impacts how we make decisions which will have to change. Fundamentally, it's going to force brands to have their fingers on the pulse of their audience instead of lurking in the shadows and hiding behind analytics.
I always like to boil things down to their simplest parts. Do you think a mom-and-pop store that operates online as well cares about this very much? No. Why? Because they know their audience. They know where their audience comes from and why they come to them. How do they know? Because they engage with their audience. There is no way around this. You're going to have to engage with your audience and adopt a bit of a more "traditional" approach to the brand.”
- Mordy Oberstein, Head of SEO Brand, Wix
"More and more publishers are already relying on first-party data, and we will see widespread adoption of cookieless solutions this year. Technologies like Lexicon ID, ID5, or Panorama ID rely on a predictive approach. They try to determine if the user on the publisher's side falls within the audience of the marketing campaign based on big data or accessible data signals. Solutions like Prebid's SharedID, Unified ID 2.0, and Admixer ID, go for a direct matching approach, trying to connect the user with user-authorized data on the advertiser's side."
- Denys Titoruk, Director of Platform Supply, Admixer & Admixer.HB+
Just like cookies aren’t good for your health, 3P cookies aren’t good for your digital health. As netizens become conscious of their digital footprint, marketers will need to digest some hard truths about their target consumers wanting greater digital security. From data abuse to customer advocacy, brands have a long bridge to cross.
Here’s what experts predict will enhance digital well-being in the years to come:
“The web has essentially used and abused user data for years, and the bill is coming due for us because we essentially refused to advocate for a responsible digital world. I'm sure many reading this are quite upset at what I just said. That doesn't make it untrue. We've essentially acted like people are unaware. People are not naive even if they are not very ‘digitally savvy.’ Folks realize that they are being overly tracked and targeted. Did we really think we're going to tolerate having a conversation about something and then seeing Meta ads targeting them based on that conversation forever? (A lesson I think the Open-AIs of the world are going to learn the hard way over the next few years).”
- Mordy Oberstein, Head of SEO Brand, Wix
“Consumer tolerance of interruptive advertising is at an all-time low. Rather than creating workarounds to continue the status quo, the death of cookies presents an opportunity for brands to meet consumers in their moments of need with the information they're seeking in real time.
Marketers who want to build genuine connections with consumers should leverage first-party and behavioral insights to understand consumer needs. Then, they can use this data to build an ecosystem of owned digital assets they fully control, including websites, apps, and blogs. This strategy, called owned asset optimization, allows brands to gather more consumer data, market more authentically, and deliver greater customer value.”
- Jonas Sickler, Digital Marketing Analyst, Terakeet
"Of course, hybrid technologies like LiveIntent NonID or Hadron ID, which combine both approaches and add AI to the mix, are here to stay but may need more time to refine models. Nevertheless, ad contextualization is key for more engaging campaigns. This, in turn, will generate more revenue by targeting the audience in a less intrusive and more brand-suitable manner while ensuring a quality ad experience.
This also leads to the emergence of contextual advertising, targeting users based on the content they are consuming rather than their browsing history. As a result, a more creative and authentic advertising experience comes into play."
- Denys Titoruk, Director of Platform Supply, Admixer & Admixer.HB+
The third-party cookie dilemma yields a double-edged sword in marketing attribution and measurement – especially when CMOs face greater demand to optimize performance and justify ROI. Marketing departments and MarTech as a whole still need to focus on multiple segments and channels to deliver to business needs. But how?
Let’s take a look at some scenarios and dive into our exclusive data to further understand the impact.
With 58% of executive leaders saying that MarTech spending will increase, retooling may be in the cards for several SMB and enterprise businesses this year. The Google x IAB x CMA drama would impact the fate of more than 110 marketing attribution software in the market, also extending to CRM, marketing automation, email marketing, email tracking, demand generation, and sales analytics tools.
According to 1,700 global software buyers surveyed, our latest Buyer Behavior and State of Software reports, respectively, uncover critical buying behaviors and expectations.
The third-party cookie deprecation plans and increased scrutiny from global watchdogs will continue to push buyers toward compliant and secure software providers.
Though Google received support from W3C in the past for the Privacy Sandbox’s use cases being created in the right direction, the tech giant has been open to feedback and worked with IAB Tech Labs and CMA since 2020. Google also agreed to adhere to IAB’s Data Transparency label practice, which aimed to create a viable ecosystem for publishers and advertisers.
However, as the matter is at a standstill, Google’s recent purchase of Reddit data for a whopping $60 Million and favored rankings to Reddit communities aren’t making the case for its “trust-building” conduct.
Google may be “the most powerful company in the world,” but will it ever be the most trusted company in the world? It will be intriguing to see the developments as CMA reveals its April report.
Until then, stay tuned and on top of industry news with G2 TechBlend.
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