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James Sleaford, managing director UK and IE at DQ&A by Incubeta, explains how Google’s culling of the third-party cookie and with it, micro-targeted ads personalized to the individual, could free up the industry to do some of its best work yet.

In March 2021, Google’s David Temkin announced that once third-party cookies are phased out it won’t build alternate identifiers to track individuals as they browse the web, or in its products. Google, the world’s biggest enabler of online tracking, had just swore off it, inspiring teeth-gnashing from many in the industry.

But it won’t be plain sailing with its solution, FLoC-based cohort, likely being delayed in countries where GDPR and the ePrivacy Directive are in effect.

Why is Google making this move now?

The real surprise is that people were surprised. The announcement referred to Google’s buy-side products Google Ads, YouTube and DV360, but it had already signposted a future without third-party cookies last year with its Chrome announcement. Not quite so clearly signposted, was the privacy first narrative which Google was particularly vocal about throughout 2020. With the importance of first-party data regularly referenced, along with the use of privacy safe tools like Ads Data Hub to plug data gaps. It was encouraging advertisers to begin using Google Cloud Solutions for bespoke audience and measurement use cases. Google not using third party ID solutions in its ad-buying tools firmly pushes advertisers down this path. 

Based on the long-term trend towards consumer empowerment over how their digital data is collected, traded and used, Google does not believe alternative identifiers (such as Unified ID 2.0 or netID) will be viable solutions in the future. This presents a watershed moment for the industry, one which will force advertisers to move away from an obsession with invasive tracking and build towards a future that meets consumer privacy standards.

Critics will point out that it’s an anti-competitive move from Google which consolidates its powerful market position. The removal of third-party tracking from Google’s ad-buying tools means that users of these platforms will now be more reliant on Google for audience targeting and measurement. Not to mention, Google could be marking its own homework. It is important to add at this point though that ad verification tools will not be impacted by this change.

Google is in no position to stop open web publishers from using alternative identifiers. Other adtech vendors are going to be using these solutions, and who knows could potentially be presented with an opportunity to steal an advantage if advertisers find that this greater precision delivers enhanced results while meeting consumers heightened privacy expectations.

What does it actually mean?

Clearly, vendors supplying third-party tracking and data solutions could be marginalised by this decision. We are just as likely to see a renewed effort from independent adtech businesses to agree on industry-wide solutions to satisfy the privacy imperative and create a sustainable ecosystem outside of Google's walled garden. 

From the perspective of advertisers and their supporting agencies, a lot won’t change. Activity on Google’s owned and operated media will be largely unaffected, so those with big budgets in paid search and YouTube can rest easy. For those with larger programmatic display budgets the changes will be of more pressing concern, especially around audience targeting, frequency capping and post view measurement.

Retargeting is big business. You will still be able to retarget on Google owned and operated media. However, in this new future, you will not be able to track specific users across the web and retarget them. Instead targeting will be based on ‘cohort groups’. Google is already pointing towards the efficacy of these cohort groups as an alternative to retargeting. Publisher first-party is still addressable, so building those publisher relationships will rise in pre-eminence in display planning.

The inability to be able to track people across the web, also removes our capacity to decide when a user has probably already seen our ad enough and for the sake of the brand and budgets we should call it a day. Without the preciseness of unique identifiers, frequency capping will be redundant and advertisers will need to find innovative ways to manage the preservation of their customers' eyes.  

A huge change from a measurement perspective, and probably most crucial for those looking to demonstrate the success of their programmatic campaigns will be the loss of the treasured post-view metric. Google will likely provide a modeled proxy of view-through conversions, as they do with cross-device conversion currently. While some will be satisfied with proxy metrics, those with enough first-party data and access to data science expertise will look to ramp up their own modeling and incrementality testing.

Things could change

However, Google’s alternative solutions do rely on their Privacy Sandbox which utilises FLoC based cohorts. Since the announcement, this solution has come under heightened scrutiny, with assertions from some that this is just evasive tracking under another name.

It has been reported that Privacy Sandbox will be added to the ongoing US anti-trust complaint made against Google. While in Europe, where the new bar for data privacy was set with GDPR, there are already strong murmurings from Googlers that FLoC just won’t fly.

If this were to happen it would cast serious doubts on Google’s planned solutions and could mean going back to the drawing board with product roadmaps. Although at this stage testing is continuing and there is a feeling among some that FLoC would satisfy US regulation if not the EU.

The more things change…

It’s also important to remain calm, many things haven’t changed, nor will they in the future. Businesses and brands will continue to advertise their products. They will still turn to partner organizations to help them target and run campaigns and measure their effectiveness. They will still need smart technology partners to help them deliver their campaigns and optimize the allocation of their marketing dollars.

There was, of course, effective advertising before there were billions of digital data points available to advertisers. A few less data points could be no bad thing. Imagine how much more innovation and creativity could be unleashed if we don’t have to investigate every tiny discrepancy on everything we have obsessively tracked.

James Sleaford is managing director UK and IE at DQ&A by Incubeta.