23/09/2020

But it’s terrible for smaller advertisers.

Googles plan to eliminate third-party cookies from its Chrome browser by 2022 is bad news for many digital advertisers. But its great for Google, which, unlike its digital advertiser competition, doesnt have to rely on third-party cookies to power its massive ad business. It might, in certain ways, be good too for users who dont want advertisers tracking them and their activities all over the internet.
Cookies are tiny text files that websites you visit place on your browser. If the cookie comes from a domain other than the one youre visiting, its known as a third-party cookie. Advertisers use these to track you and your interests across the web which websites you visit, how often you visit them, even your location allowing them to serve you targeted ads and measure their effectiveness. Websites often have third-party cookies from multiple ad companies. These form the backbone of the digital advertising ecosystem. At least, they did.
Google is framing the decision as a way to build a more private web, but since most of this is happening behind the scenes, Chrome users may not notice how their privacy is affected by the change. But its a big change. It will significantly (or entirely) reduce the number of third-party cookies users come across over the course of their daily internet lives, protecting them from ad companies theyve never heard of, didnt know were tracking them, and dont know if they can trust.
Google, which dominates both the web browser and digital ad markets, relies on third-party cookies for some parts of its ad business, which may suffer as a result of this change. But it also collects a ton of first-party data on internet users through its many services, such as Gmail, Maps, YouTube, Android, Google Home, and even its search bar. This kind of data collection will not be affected by the ban, and, in fact, it could become more valuable as the third-party sources of ad targeting data dry up.
Google is a lot of things, Jordan Mitchell, senior vice president at the Internet Advertising Bureau Tech Lab, told Recode. They work with everyone every publisher, every advertiser, every agency … Theres not too many things you can do without touching Google in some way.
Google already offered options for users to block third-party cookies but required users to opt-in to do so, which, as weve argued, is not very effective. Eliminating them outright is. Some experts believe this seemingly drastic step was inevitable after Chromes browser competitors, including Firefox and Apples Safari, banned third-party cookies, putting pressure on Google to do the same.
With its ad revenue partially dependent on third-party cookies and considering the upheaval this change will create throughout the digital ad ecosystem, Google is giving everyone two years to figure things out before it implements this change. Experts hope this will lead to a better and less intrusive ad ecosystem.
I think this is going to spur innovation within the space, Justin Choi, the founder and CEO of advertising technology platform Nativo, told Recode. There are third parties that are trying to create alternatives.
Those alternatives dont yet exist, Mitchell said not even for Google. He suggests that companies may develop services and tools like netID, which gives users a dashboard to control their privacy preferences across its member sites, or Single Sign-On, which allows users to use one login to verify their identity across multiple sites. Essentially, the compromise needed is something that identifies a user and their behavior across the internet, which is good for the ad companies, while giving the user transparency and control over their own privacy.
We, as an industry, have a lot of retooling to do, Mitchell said.
While limiting such access to your data seems like a good thing for privacy, it also gives first-party data vacuums like Google and Facebook that much more power in the ad market and even more control over your data. Eliminating third-party trackers simply maintains Facebooks and Googles ability to track consumers and gather enormous amounts of data about us while also preventing many of their advertiser competitors from doing the same.
The data collection becomes concentrated within Google, Choi said. They become the gatekeeper and the rest of the industry gets whatever Google allows it to get.
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