Cookies

Don’t bet the house on Google’s replacement solutions for cookies just yet

9th April 2024
Carly Bell

As Google finally begins the switch-off of third-party cookies in its Chrome browser marketers are readying themselves for advertising in a world without cookies. With one of the options available to weather this storm being to use Google’s replacement solutions for cookies, we’re asking, is the Google Privacy Sandbox fit for purpose?

Here we take a close look at: 

Why Google is deprecating third-party cookies

So why are third-party cookies going away anyway?

If you are interested in a slightly deeper dive into this then check out our Cookie Countdown Part 1 But here is a summary of the key points: 

  • privacy is a key driver: both platform providers and marketers are increasingly working in an environment where individuals (and privacy campaigners) are expressing concerns about how personal data is collected and used for marketing purposes.
  • Google has been behind on this: and there is little doubt that there has been pressure on them for some time to align with their competition in the browser market – like Apple (Safari) and Mozilla (Firefox) – who have led from the front of privacy by blocking third-party cookies a long time ago.
  • pressure from legislators: the combination of privacy-focused regulations like GDPR and CCPA – and the increasing willingness of regulators to flex their muscles in the shape of fines to large platform players including Google-  is also a likely contributing factor.
  • The impact of Ad Blockers: the reality for marketers is that there is a sizeable chunk of the internet audience that has taken matters into their own hands with research by GWI suggesting 1/3 of internet users use Ad Blockers at some point. 

Our own research indicates that 97% of marketers are concerned about cookies going away, and the impact that will have on their ability to understand which marketing activities are effective for them. They are right to be concerned – which is probably the headline message to take away from this first section. 

According to StatCounter, Chrome has a market share of 65.3% which is huge when you consider that its closest competitor is Safari (Apple) with just 18.3% penetration. It is the 65.3% of the market that has driven a huge percentage of the digital marketing done 

globally in recent times – which has hinged on the data and targeting capability provided by the third-party cookies embedded in the Chrome browser. 

And all of that is now being switched off. 

A Short History of Google’s Privacy Sandbox

So, if cookies are going away what is Google proposing in their place?

Enter the Privacy Sandbox. This is the vehicle that Google has used to lay out its plans for a post-cookie world with a focus on balancing the need for increasing levels of privacy online (for individuals) with being able to let advertisers continue to deliver targeted advertising on the web. 

In essence, it is a heavily API-driven approach to replacing cookies, with much of the focus for processing customer data being shifted to the browser, in an attempt to introduce an element of choice and privacy for internet users. 

There has been quite a bit of stop/start around the process of Google releasing plans for each of the components on the timeline itself. 

Proposed solutions have come and gone – take the example of the initial FloC proposal for targeted advertising which was shelved (ironically enough partly over concerns that it increased the privacy risks it was designed to solve) and replaced with Topics. And the timeline has gone back twice already. 

In practical terms there are only two advertising solutions left on the table right now: 

  • Topics API (replacement for FloC)
  • Protected Audience API (formerly Fledge)

And as you can see from the published timeline below, Google is already underway with the phaseout of cookies with 1% of cookies (impacting 30 million users) being deprecated in January 2024 – and an endgame of removing all cookies in late 2024. 

The only potential spanner in the works is an ongoing investigation by the Competition and Markets Authority in the UK into potential competitive concerns resulting from the removal of cookies. With the CMA continuing to express concerns about competitive impact as late as January 2024. 

A muted response from the industry

Before we take a closer look at the solutions on offer from Google, it’s worth noting here that the response to them from the industry has had a lukewarm feel to it at times. For a number of reasons including: 

  • some advertisers have dug their heels in: it would appear that there is certainly a segment of the market that might not believe that cookies are truly going away.  According to emarketer cookies were still being used for 78% or more programmatic ad buys across industries as of Q3 2023.
  • difficulties around testing solutions: many advertisers have been slow to test cookieless solutions due to resourcing and financial constraints. It is also worth pointing out that testing solutions have been difficult while cookies are still working in Chrome.  
  • concerns around deprecated targeting capabilities: on a purely practical level many marketers are concerned about the reduced targeting functionality that is being made available in solutions like the Topics API versus what they have been used to previously.
  • the Privacy Sandbox only works on the Chrome browser: which has prompted some marketers to suggest that it might be as much about ticking a box on elevating Chrome to the status of a privacy-friendly browser- and fending off interest from the regulators – as it is about creating a solution that meets the true needs of advertisers across the industry in a cookieless world   
  • lingering concerns around Google’s definition of privacy: it is worth noting here that Google will continue to track individuals post-cookies, albeit in a different guide. This has led to questions about the extent of their true commitment to privacy.

The current state of play on remaining Google solutions

Here is quick overview of the two Sandbox solutions that are designed to help marketers deliver target advertising – the Topics and Protected Audience APIs.

What is Google Topics API?

The Google Topics API is Google’s proposed solution for prospecting and is designed to deliver targeted advertising in a way that meets the needs of advertisers. But that also respects the privacy of individuals in the process. 

It is a successor to FLoC (Federated Learning of Cohorts) which was the initial attempt by Google to deliver increased privacy relative to cookie-based approaches. However, FLoC fell by the wayside due to concerns that it actually had the potential to be even less privacy-friendly than its cookies predecessor. 

How it works

Topics effectively transfer the processing of ad targeting to the browser itself where it can analyse topics of interest to the user based on browsing behaviour. It then enables advertisers to serve relevant ads to the users when they visit a website by fetching up a list of relevant topics and displaying an ad to match the user’s past interests. 

Central to the approach is the idea that users can block specific topics (or turn off Topics entirely) and website owners must be able to opt out of Topics calculating user interests on their site. 

Pros of Google Topics 

  • In practical terms, Google Topics is simpler for marketers to understand and implement than FLoC. And has the potential to improve things for both individuals and advertisers.
  • Topics do a better job on the privacy front than FLoC.

Cons of Google Topics 

  • One of the big concerns expressed by advertisers is the narrow nature of the classification taxonomy which is available to them. According to Google’s published version, there are just 471 which offers a significant reduction in targeting when compared with the 1500 available on the IABs content taxonomy. For example, a specialist coffee provider previously using Single Origin Coffee wouldn’t be looking at Specialist Coffee or even Coffee as a classification, but simply Food and Drink. Which is a big step back in terms of targeting capability.
  • A reduction in the number of classifications will ultimately lead to more competition for advertising space which is already at a premium right now – and will ultimately drive CPAs up further.
  • Topics are subject to a 3 week time period restriction on data that potentially reflects where user ‘was’ in buying terms rather than where they ‘are’ 
  • The use of randomly assigned topics (which could be in the region of 5% to help ensure user privacy) has implications for advertising waste

What is the Protected Audience API?

The protected Audience API (formerly known as FLEDGE) is designed to serve up remarketing and custom audience use cases. 

It works on the basis of allocating individuals to interest groups based on browser-level interactions and then allows sites that the user lands on to display ads associated with those interest groups (more detail here). 

On the plus side, the Protected Audience API offers a model for retargeting as cookies go away. The flip side of this is that the model requires a positive ‘opt-in’ for advertising. If opt-in levels are as low as they are for the IDFA opt-in on Apple devices – which are as low as 7% – then finding an addressable audience is going to be the most pressing problem for advertisers looking to leverage the Protected Audience API. 

With even the most optimistic hat on it is difficult to come to an assessment other than the fact that the jury is out on Google’s proposed cookie replacement solutions. Which has marketers looking elsewhere for an answer. 

What are the alternatives to the Sandbox as cookies die? 

So where to now for marketers who are looking for solutions that can continue to deliver the granularity (or at least ‘perceived’ granularity) of third-party cookies for targeting and measuring ad campaigns? 

Our research on the topic has uncovered that: 

  • despite the reservations outlined above 43% of marketers are betting the house on Google’s replacement solutions 
  • 40% are turning their attention to Contextual advertising – a channel that has been seen as more traditional, and even outdated in recent times
  • just short of 43% are removing third-party  targeting altogether
  • and 38% are putting in place unified attribution platforms 

It is heartening to hear that removing third-party and unified attribution ranks so highly in our findings. Which very much aligns with our approach and ethos.  

Source: Marketing in a Cookieless Future, Corvidae

As cookies disappear, cookieless attribution, like our own AI-driven Corvidae solution, has to be front and centre. It delivers a number of key benefits that overcome the limitations of cookie-based solutions including: 

  • 100% cookieless attribution that boosts the accuracy of your analytics data from 20% to 95%
  • the ability to track user journeys that are more than 3 times longer than cookie-based tracking
  • campaign impact that delivers ROAS of 20:1 on Google Ads and 35:1 on Facebook
  • fully GDPR compliant tracking ‘out-of-the-box’

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