While some were surprised by Google's latest delay in fully eliminating third-party cookies in Chrome, the move wasn't entirely unexpected. It comes after several previous postponements, with the initial phase, affecting roughly 1% (or 30 million users), having only begun on the fourth of January.
But the company’s post-cookie initiative, Privacy Sandbox, faced serious headwinds from multiple sources. The UK’s Competition and Markets Authority (CMA) had been publicly voicing its concerns that Privacy Sandbox would quash competition in the advertising space. Google had been attempting to address the CMA’s concerns, but after it issued its April Report, Google put the brakes on continuing the rollout, stating:
“We recognize that there are ongoing challenges related to reconciling divergent feedback from the industry, regulators and developers, and will continue to engage closely with the entire ecosystem. It's also critical that the CMA has sufficient time to review all evidence including results from industry tests, which the CMA has asked market participants to provide by the end of June. Given both of these significant considerations, we will not complete third-party cookie deprecation during the second half of Q4.”
Meanwhile in the US, the IAB Tech Lab issued a highly critical report of Privacy Sandbox, calling it a time bomb that will disrupt the programmatic ecosystem.
The Fate of Publishers in the Era of Cookie Deprecation
At Colossus SSP, we too have been concerned that the deprecation of cookies has had a negative impact on publishers (some could lose as much as 30% of ad revenue). Advertisers pass over impressions when they don’t know anything about the consumer, which is why many iOS and Firefox users report seeing poor quality ads.
Privacy Sandbox is an admirable initiative designed to provide a privacy-centric alternative to third-party tracking cookies, but there are still kinks to work out. One of those kinks is the Topics API, which segments users based on their browsing behavior over the past week. The tactic defines 469 topics for segmenting purposes, as opposed to the tens of thousands of characteristics applied by publishers. Publishers like to tell rich stories about their audiences, and Topics API curtails that ability.
These challenges come on top of Google SGE, a generative AI-enabled search function that allows users to see content of articles and information sources directly from the search results, thereby eliminating the need to visit the site (as well as eliminating the publisher’s opportunity to monetize a visit).
These challenges have affected specific groups of publishers particularly hard: diverse owned, small and niche publishers. For this reason, we welcome the delay as it will give the industry time to develop better solutions for smaller publishers.
Value Prop as the Way Forward
In the long term, Colossus SSP believes that privacy is paramount, and every consumer has the right to go about their digital lives with the knowledge they're not being tracked.
But we also believe that the internet is a key way consumers discover new brands, products and services that enhance their lives. Success in advertising comes down to the value proposition: does an ad provide a compelling value to consumers; value that prompts them to click on an ad and share data.
This is why Colossus SSP is eager to help advertiser clients plan their campaigns around specific and achievable KPIs. In an age of privacy, focusing on the value prop for everyone -- consumer, publisher, advertiser -- is the way forward.
