Google abandons third-party cookie kill, but the cat is out of the bag

Google is backtracking on its plan to remove third-party cookies in its Chrome browser, after its long-standing effort to phase out the cookies that were created to track users online. The big move comes after advertisers continuously expressed their concerns as the phaseout of the cookies on Chrome will impact their ability to collect data for personalised ads, meaning they will need to rely on Google's user databases. 

At the same time, the UK Competition and Markets Authority had also said Google's cookie deprecation plan would cause serious impact on competition in digital advertising. Google-backed Privacy Sandbox’s vice president Anthony Chavez said in a blog post on Monday that early testing from ad tech companies, including Google, has indicated that the Privacy Sandbox APIs have the potential to encourage the adoption of privacy-enhancing technologies.  

“At the same time, we recognise this transition requires significant work by many participants and will have an impact on publishers, advertisers, and everyone involved in online advertising.” 

In light of this, the tech giant is proposing an updated approach that elevates user choice.   

“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,” he added. 

Stephen Bonner, deputy commissioner at the UK's Information Commissioner’s Office, said the office is disappointed at Google's move, “From the start of Google’s Sandbox project in 2019, it has been our view that blocking third party cookies would be a positive step for consumers. The new plan set out by Google is a significant change and we will reflect on this new course of action when more detail is available."

“Our ambition to support the creation of a more privacy friendly internet continues. Despite Google’s decision, we continue to encourage the digital advertising industry to move to more private alternatives to third party cookies - and not to resort to more opaque forms of tracking," he added.

“We will monitor how the industry responds and consider regulatory action where systemic non-compliance is identified for all companies including Google," he said.

Google’s decision to keep third-party cookies reflects the company's reliance on advertising revenue, according to Nathan Petralia, former managing director of Merkle Hong Kong. 

"While it may seem like a setback for privacy advocates, the move should strike a balance between user privacy and the needs of digital advertisers. The introduction of a new Chrome feature for informed user choices is a step in the right direction, but its success will depend on how effectively it empowers users to control their data," he added.

According to Jeff Green, CEO, The Trade Desk, the move shows that Google has finally acknowledged what the advertising industry has been saying for years — that the privacy sandbox is not a good product and doesn’t sufficiently protect consumers’ privacy or empower advertisers. Moreover, it hurts publisher monetisation most, he said.

“Google seems to finally acknowledge that the best option for them is to give consumers the choice. The question that remains is — will Google truly give consumers’ choice? Or will they make the decision for consumers and then bury consumers access to change it?” he questioned.

Perhaps it is worth taking the effort to show the industry that Google takes privacy with the utmost seriousness, said Hari Shankar, senior partner APAC and ex-vice president APAC of ShowHeroes.

"An elaborate strategy was required to 'not' sacrifice the third-party cookies but also stay in the 'right' political quadrant - and that's what they may have just pulled off at the end of four years. Of course, it could be just another flop from Google adding to the list from the past years, for all you know."

A sigh of relief for marketers

While the judgement is still out on whether users will have more choice, the reality is that many advertisers likely breathed a sigh of relief upon receiving this news. Across the region many were not fully prepared to embrace the significant changes required for running digital campaigns without cookies. In fact, a 2024 YouGov and Taboola study showed that only 25% of advertisers are ready for cookie deprecation, and less than half (46%) are satisfied with Google's decision to delay the phaseout.

However, it remains crucial for brands to explore ways to reduce their reliance on cookies and to prepare for future, explained Jan Harling, CEO of Virtus Asia Consulting.

It is likely that policymakers will enforce tighter privacy and compliance regulations with the likely possibility of users having more control over the data they share.

“Significant progress has been made with solutions such as Cleanrooms, and I expect these technologies to continue evolving,” he said. As such marketers need to double down on contextual targeting, said Harling adding that contextual marketing “has proven to be highly effective, even outperforming other targeting methods in multiple studies”.

Petralia echoed the sentiment adding that the move provides short-term stability and continuity in marketers' advertising strategies as they continue using third-party cookies for targeted ads without having to overhaul their systems. However, there's still long-term uncertainty due to ongoing regulatory scrutiny and evolving privacy standards. As such, marketers will need to stay agile and prepared for future changes in the digital advertising landscape.

Forrester’s principal analyst Xiaofeng Wang added on that many marketers in APAC saw the move by Google coming after its three delays in four years. Additionally, according to Forrester's Marketing Survey 2024, 53% of B2C marketing decision-makers in APAC said that they did not believe that Google will deprecate the third-party cookie. She added:

But the reality is, data deprecation is happening with or without Google’s cookie deprecation plans.

"Marketers who strive to use personalisation to improve customer experiences must also adopt a privacy-first approach to earn consumer trust and ultimately win competitive advantage," said Wang.

More than ever before, marketers need to be transparent and granular about data collection and usage and learn to communicate to consumers that the value is not just in free content or free samples but better personalisation, more customised services, and products that ultimately yield better customer experiences.

Miranda Dimopoulos regional CEO of IAB Southeast Asia and India said that the organisation believes this development emphasises the importance of prioritising user privacy while balancing the needs of businesses and consumers.

“We encourage businesses in our region to carefully evaluate the ever-evolving landscape and explore all available options, including first-party data strategies, alternative identifiers, and privacy-preserving technologies. The diverse markets in Southeast Asia and India necessitate a tailored approach that considers local regulations and consumer preferences,” she said.

Moving the needle on first party data and contextual marketing 

While Google has decided to cancel its plans on the deprecation of third-party cookies, the scare it presented forced many marketers to focus on owning their own first-party data, inspiring them to consider full-funnel tracking and breaking down internal silos, said Melissa Cheng, country manager, NP Digital Malaysia.

This shift allows marketers to create more personalised and relevant content to drive traffic and use their first-party cookies for effective remarketing and attribution. “From a digital marketing perspective, this decision provides continuity for advertisers who rely on cookies for detailed audience insights and ad targeting,” Cheng said.

Wang also added that marketers in APAC have actively been exploring and experimenting with alternative methods with 64% of B2C marketing decision-makers in APAC saying they have since invested in more zero- and first-party data collection, and 62% are testing more context-based advertising.

Niall Hogan, GM of GumGum JAPAC added that at the heart of it, there are complexities in balancing user privacy with effective advertising and clearly the decision highlights the evolving consumer expectations around privacy and transparency in the digital landscape. Consumers are increasingly aware of and concerned about how their data is used, leading to a growing demand for privacy-centric solutions.

From a consumer perspective, this shift is crucial. As users become more informed about data privacy, they expect brands to prioritise their privacy while maintaining ad quality. Contextual advertising meets these expectations, providing a seamless and non-intrusive experience, he added.

A cat and mouse game

Google may have announced it is no longer deprecating cookies, but ultimately, the Privacy Sandbox is still moving forward, and, bottom line is that it means massive changes to audience data, media buying, and measurement in Chrome, Drew Stein, CEO and founder, Audigent explained, adding:

Who cares if we deprecate the dessert or not? Privacy Sandbox has always been the main course.

The announcement may come as a relief to many advertisers and marketers. However, it isn't much more than a sleight of hand, Stein said. "Google is not trying to put the cat back in the bag. If anything, Google is the cat, and the industry continues to be its big ball of yarn," Stein added.

"One thing is for sure - these cat and mouse games need to end, and Google needs to meaningfully engage in fixing Privacy Sandbox instead of toying with cookie deprecation once again to distract from the main challenges created by its proposed sea changes in Chrome."

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