Third party cookies are here to stay for another two years as Google announces Privacy Sandbox extension to 2023 rather than 2022 as previously planned.
Google’s Privacy Sandbox initiative has sought to develop web technologies that enhance user privacy yet also maintain the ability of businesses and digital marketers to perform their duties effectively.
The new Federated Learning of Cohorts (FLoC) technology, the result of the Privacy Sandbox initiative, has been tested live since March 2021 but the Mountain View search giant has said that “more time is needed” before it completely replaces the third party cookie in a statement on An updated timeline for Privacy Sandbox milestones.
One concern mentioned by Google in the reason for the extension has been a potential reduction in the effectiveness of advertising models. Google had previously trumpeted that FLoC, which groups website visitors into cohorts of similar interests, can still be 95% as effective as cookie-based methods.
However, one study claimed that removing cookies made advertising less relevant and resulted in 52% less revenue for web publishers.
These industry concerns and interests need to be addressed before third party cookies are replaced by the proposed FLoC technologies. One particular aspect that has played an important part in delaying the FLoC rollout is the involvement of the United Kingdom’s Competition and Markets Authority (CMA).
UK’s CMA Demands Oversight
Six months after the publication of its initial report in July 2020, the CMA opened an investigation into Google’s proposals to replace third-party cookies with a new technology that they were working on.
Following industry input regarding anti-competitive behaviour, the regulator became involved after concerns about a concentration of power within the Google ecosystem at the expense of its competitors. At the request of complainants, the CMA has sought to ensure Google develops its proposals in a manner that is fair to the competition.
On June 11th, the CMA announced that it had secured commitments from Google to address concerns with the news that the CMA was …to have a key oversight role.
Despite privacy concerns over the use of third-party cookies, there needs to be a balance with the ability of online publishers to continue to generate revenue and produce valuable content. It was interesting that online newspapers in particular were mentioned in the CMA’s announcement of continuation of publisher revenue and content generation.
Google has since clearly acknowledged the involvement of the CMA and set out new milestones in the timeline for the rollout of its new proposals.
After discussion of the new technologies with, for example, GitHub and the World Wide Web Consortium (W3C), FLoC will be trialled and tested with the community before final launch.
Google’s timeline now looks like:
- Late 2022: Stage 1, when testing is complete and publishers and digital marketers will need to migrate from third party cookies to the new FLoC system.
- Mid 2023: Stage 2, when we will see third party cookies phased out.
Relief for the Ad Tech Industry
With the Privacy Sandbox initiative still being a “work in progress” the news of the delay in killing off third-party cookies in Google Chrome came as welcome relief to the ad tech industry.
Trade Desk, Criteo and PubMatic were all quoted by the Wall Street Journal has having made 10%-13% stock gains in the afternoon of Thursday 24th June. This is in reflection to the 19% losses the firms all made upon Google’s original announcement of the third-party cookie phase out plan back in March 2021.
Mirroring Google’s Privacy Engineering Director, Vinay Goel, in his statement that:
“…more time is needed across the ecosystem to get this right.”
so market analyst Scott Devitt cited the three aforementioned ad tech stocks as:
“…likely among the best positioned to benefit from the extra time to develop alternative solutions.”
Digital marketers and advertisers still need a full, clear picture about the final Privacy Sandbox proposals, and much will hinge upon the final decisions of the CMA. However, there is now more time for us all to consider the alternatives such as improving our own first party audiences and upgrading other tools in the extensive digital marketing toolbox.
The same goes for traditional aspects of the marketing mix, they are still highly valuable too and so marketers should be looking to utilise every channel to leverage success.
We’ve spoken about the cookie-less future before and will continue to bring news of the situation in the industry.
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