For the past four years, Google has been hinting at the possibility of eliminating cookies. They even initiated a phase-out in January of this year, only to make a U-turn and declare that cookies are here to stay. Instead of doing away with third-party cookies, Google recently announced an “updated approach” to the user experience within Google Chrome. What exactly are these changes, and what implications do they have? Let’s delve into that today!
Contents
- What’s happening?
- Why was Google phasing out cookies?
- What is Google doing instead of phasing out third-party cookies?
- What does this mean for businesses?
- What the PPC community thinks about this change
What’s happening?
As of July 22, Google announced a revised roadmap for its web-based Privacy Sandbox initiative. Google’s initial intention to phase out third-party cookies (in favor of first-party data) in the latter half of 2024 stemmed from this Privacy Sandbox project. However, Google has decided to retain third-party cookies going forward. Instead, the platform will provide Google Chrome users with “opt in/opt out” choices, empowering them to manage and modify their web browsing tracking settings. Here’s the official statement from Google:
“Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators and will engage with the industry as we roll this out.” Let’s define some key terms from this statement:
- Third-party data: Information about customers gathered from external sources (cookies) across the internet that your business can utilize but doesn’t own.
- First-party data**:** Information that your business directly gathers, owns, and manages.
- Privacy Sandbox: A Google project focused on creating and implementing privacy-conscious APIs, tools for advertisers and publishers, updates to cookies, and more.
Unlock optimization opportunities for your account with our free Google Ads Grader, whether you’re using first-party or third-party data for PPC.
Why was Google phasing out cookies?
Google was phasing out third-party cookies transitioning towards a more privacy-centric web environment in response to user apprehensions regarding online tracking practices. “We continue to invest in features that protect your data and provide more control over how it’s used. This includes taking steps to limit the ability to track your activity across different websites,” Google said regarding the initial decision to phase out third-party cookies. Initially, the platform had planned to completely retire all third-party cookies by the end of this year. This process was set in motion in January 2024 and has, to date, only affected approximately 1% of Chrome users.
What is Google doing instead of phasing out third-party cookies?
Google has yet to disclose extensive specifics about its alternative plan to replace the phasing out of third-party cookies. However, what we do know is that while businesses can still track customer data through third-party cookies, Chrome users will be given the choice to “opt out” of this tracking. The Privacy Sandbox initiative will continue to be a focal point for Google. The intention is to persist in developing more privacy-focused methods for the precise tracking and targeting of audiences across Google Ads, GA4, and other platforms. “As this moves forward, it remains important for developers to have privacy-preserving alternatives. We’ll continue to make the Privacy Sandbox APIs available and invest in them to further improve privacy and utility. We also intend to offer additional privacy controls, so we plan to introduce IP Protection into Chrome’s Incognito mode,” wrote Anthony Chavez, Vice President of Privacy Sandbox at Google, in the announcement article.
What does this mean for your business?
Prioritizing first-party data in your strategy remains a wise decision. Numerous new and efficient PPC strategies, such as enhanced conversion bidding or customer match audiences, rely on first-party data.
Furthermore, beyond Google, other platforms will persist in promoting privacy-focused, first-party data-driven approaches. For instance, Facebook’s Advantage+ audiences can refine your targeting using audience recommendations you provide.
This free guide can help you find ways to find your target audience, no matter what kind of data your business gathers!
What are industry experts saying about this change?
This shift has been met with a largely positive reception, particularly since Google acknowledged in its initial announcement that discontinuing third-party cookies was causing strain for numerous advertisers. “We expect that overall performance using Privacy Sandbox APIs will improve over time as industry adoption increases. At the same time, we recognize this transition requires significant work by many participants and will have an impact on publishers, advertisers, and everyone involved in online advertising,” said Anthony. Some advertisers echo this sentiment, believing that any alternative would be preferable to the elimination of third-party cookies. For example, this X post below recognizes that doing away with third-party cookies would have driven many businesses to shut down.
If you’ve invested considerable effort in readying yourself for a future devoid of cookies, you’re not the only one. As shown in the following X post, other advertisers are frustrated that the time and effort dedicated to preparing for (and being concerned about) the end of third-party cookies now seems, in some ways, to have been in vain.
Adding to this, the ambiguity surrounding Google Chrome’s new direction isn’t instilling much confidence in advertisers.
“That, based on historical evidence, could end up being a big win for advertisers, as most users simply won’t make any changes to their settings. But then again, if Google starts prompting users with pop-ups, like Apple does with ATT, that could also end up being significantly worse too, and see much less user data flowing through,” writes Andrew Hutchinson, Content and Social Media Manager at Social Media Today, in this article.
Ari Paparo, CEO at Marketecture, offered his speculation on the appearance of the Chrome update in the following X post. He stated:
“My guess is they’re going to slowly move from opt out of third-party cookies, to recommending blocking to users, then eventually to opt in only.”
These viewpoints underscore the enduring importance of your first-party data, given that fewer potential customers might opt into third-party tracking in the times to come.
This update also raises questions about Google Analytics 4 (GA4), particularly because it was widely understood that GA4’s replacement of Universal Analytics was largely motivated by its enhanced capacity for first-party tracking.
Source
What’s the takeaway? Advertisers perceive this as another unexpected change from Google, and the onus is now on the platform to elevate its Privacy Sandbox initiative to ensure that more first-party data PPC strategies are genuinely effective.
The Google Privacy Sandbox situation becomes even more complex
Advertisers will need to wait for additional information from Google as it starts rolling out tracking controls for Chrome users. With or without cookies, all data forms hold potential value for your business. Therefore, maintaining a blend of first-party and third-party strategies is advisable. For now, staying informed about Google’s updates is your most strategic move!