Google's sudden reversal of plans to phase out third-party cookies after years of promising to do so is akin to a TV show touting an epic plot twist only to reveal it was all a dream. It's no wonder ad tech leaders are in stitches.
But they are trying to stay calm. They can't afford to lose focus, especially since it remains to be seen whether Google's about-face will negate all their efforts and investments towards a third-party cookie-free Chrome world.
You can read the details here, but here's the gist: After four years of promising the advertising industry that it would eventually remove third-party cookies from its browser, Google has now announced that it will let users decide whether they want to be tracked by cookies.
This likely means that third-party cookies will disappear from Chrome (at least most of them). History bears this out: consider what happened when Apple did something similar three years ago. Most users opted out of tracking, which significantly reduced third-party addressability and the ads that rely on it.
If the same thing were to happen with Chrome, there would still be demand for alternatives that ad tech chiefs are already pouring a lot of money into. That's why many ad tech CEOs, while unhappy with Google's pivot, aren't too worried. Instead, they're taking a wait-and-see approach, eagerly awaiting details on the timeline and regulatory approval.
Andrew Casale is one of those executives.
As CEO of ad tech vendor Index Exchange, he keeps his cool. He's never going to rush to change development plans, suddenly shift timelines or make bold predictions about what's going to happen next. He's holding off on any drastic actions until he has more clarity. And who knows when that might be.
“As far as Index Exchange is concerned, this is [Google’s pivot] “Nothing changes,” Casale said.
He and his team will continue testing the API within the sandbox and continue to support the proliferation of alternatives outside of it. Casale said, “We still have a roadmap of technology improvements for the sandbox that we will complete. We intend to do everything we can to keep alternative identifiers flowing to the market.”
Audigent CEO Drew Stein agrees.
“As far as we're concerned, the investments we've made over the last five years still stand strong,” Stein said.
All these bets rest on one big idea: the future of tracking people while respecting their privacy will require not just a single solution like third-party cookies, but a combination of solutions. This combination will include sandboxing, authenticated IDs, probabilistic IDs, contextual data, and first-party IDs. How all of this comes together will depend on what advertisers are trying to achieve based on their data inputs, processing requirements, and desired outcomes. It's not a one-size-fits-all approach.
“We don't think we've lost anything with this announcement,” Stein said. “It's business as usual for us in terms of focusing on the sandbox and alternatives outside of it.”
Of course, his views could change in an instant. If the past four years have taught these executives anything, it's to never assume something will happen until it does. But until then, they'll continue to read between the lines while holding strong opinions lightly.
Paul Bannister, chief strategy officer at Raptive, an executive familiar with the Privacy Sandbox proposal and who regularly attends such meetings, said the mood among his colleagues is “business as usual.”
“In some ways, from a day-to-day perspective, it's like, 'Let's just keep doing what we're doing, building out Protected Audiences, etc. Let's continue to assume that third-party cookies are going to go away, whatever choices we give consumers.'” He said in an interview with Digiday a few hours after the July 22 announcement. “Something is better than nothing, but as far as timing, I don't know.” [in terms of Google’s rollout].”
The reason these CEOs were so philosophical is because they saw the future as full of surprises. They knew the road to a third-party cookie-free Chrome would bring surprises, but they didn't know what they would be. Some wondered if Google would follow Apple's lead and block third-party cookies without permission, while others predicted the deadline would be extended indefinitely.
Either way, they knew they still needed an alternative, so they kept investing in it. As it turned out, that was the right decision, at least for now.
This uncertainty lingers because while executives like Casale are confident that Google will phase out consent-based cookies, they're not ready to fully commit to what comes next, especially with regards to the sandbox. The big question remains: How will Google ask Chrome users about tracking with third-party cookies? Will most users say no? And if they do, how will that affect measurement?
Until those questions are answered, some ad tech executives don’t see a reason to pour more money into the sandbox — the costs are too high and the rewards too low for these smaller companies, unlike the larger ones. So they’re pausing, catching their breath and considering their options.
“The real casualty here is the industry's efforts and opinions on sandboxes. Google's confidence in these solutions certainly seems in doubt,” said one ad tech executive, who spoke candidly on the condition of anonymity. “We, and likely many others, are again postponing these implementations in favor of more agnostic, non-addressable solutions like contextual IDs and alternate IDs.”
Of course, there will be complaints, but the move makes sense. But the way Google allows Chrome users to choose whether or not they want to be tracked by cookies will require additional investments — money the CEOs didn't budget for. Suddenly, their technology will have to adapt from operating without third-party cookies to potentially handling them. Not every company has the financial wherewithal to make that change easily.
Put all this together and you have the same old story repeating itself since Google's announcement: third-party cookies are still being phased out, the Sandbox is still shrouded in mystery, and the advertising industry still feels like a bystander in its own game.
