The apocalypse has been postponed, but commentators say Google’s delay on third-party cookies may be a sign that FLoC will also be replaced.
Greg Piechota, UK-based ‘researcher-in-residence’ for INMA, says the slowdown – with Vinay Goel talking about moving “at a responsible pace” – follows “criticism from all sides and scrutiny from regulators”.
Google now wants to phase out third-party cookies in late 2023, two years later than originally planned, and Piechota says reference to a ‘rigorous, multi-phased public development process, including extensive discussion and testing periods’ for FLoC and other proposals, is a fairly obvious signal that it will end up changing or replacing FLoC.
The decision was announced last week in a post by Goel, who is privacy engineering director at Chrome.
Third-party cookies have been the backbone of online display advertising, with the US$250 billion industry using them to identify users across the web, target and retarget them with personalised ads, and measure effectiveness.
The original 2020 announcement cited privacy concerns of consumers and regulators, with several new privacy-friendlier technologies proposed as replacements, and known as the Privacy Sandbox initiative.
Now Goel is saying that despite “considerable progress” with the initiative more time is needed “across the ecosystem to get it right”.
Piechota says only four of 30 Privacy Sandbox technologies were ready for testing, with advertising agencies doubting Google’s internal tests that new technologies achieve 95 per cent of conversions per dollar vs. third-party cookies.
Publishers and ad tech vendors had initially hoped for alternative identifiers, such as Unified ID 2.0 – an idea Google abandoned in March – with the Privacy Sandbox allowing only targetting segments of anonymous people grouped by similar Web behaviours (so-called FLOCs).
In June, competition regulators including the European Commission announced probes into the Privacy Sandbox to prevent Google from abusing its position in the advertising technology and browser markets to enforce changes which will strengthen its dominance in online advertising.
Goel now says the delay will allow sufficient time for “public discussion on the right solutions, continued engagement with regulators, and for publishers and the advertising industry to migrate their services”.
IAB Europe chief economist Daniel Knapp told Piechota the announcement “moves the industry from fire-fighting to more strategic planning”, adding that the revolution in online advertising is “paused but not called off”. Whether or not targeting FLOCs is the final result of the Privacy Sandbox, Piechota says the shift towards privacy is clear, with consumers and privacy laws rejecting tracking, while tech companies abandon it, with browsers such as Safari and Firefox blocking third-party cookies by default since 2017 and 2019.
Google has promised to discuss prototypes such as W3C over the next year, conduct “numerous trials” with ad tech, publishers, and advertisers, and launch changes “only after considering the industry’s feedback”.
When that is complete and the technologies are launched in Chrome, “sometime late in 2022”, publishers and the advertising industry will get nine months to migrate their services.
Then, “starting in mid-2023”, Chrome will phase out support for third-party cookies over a three-month period finishing in late 2023.
Piechota says “the world after the cookie apocalypse” will likely be built on many pillars, differentiated by identifiability and addressability of individuals with ads, citing targeting logged-in users, shared identifiers, publisher-built segments based on first-party user or content data, targetting to FLOCs or other cohorts of anonymous users, and “last but not least”, contextual advertising.
“Many foresee the comeback of advertising networks offering ads on sites of similar contents,” he says, “and modern contextual targeting can also be very sophisticated, with content classification driven by AI.”
A survey of INMA members in April indicated that most felt “only moderately prepared” for the change while most remained reliant on third-party cookie technology.
Piechota says publishers have got a longer runway for adapting to the new era, but many are refocusing on first-party data to improve ad offerings as well as products and services based on improved customer knowledge.