Google recently announced updates to its Privacy Sandbox, including the deletion of cookies for 1 percent of Chrome users by 2024. This marks another step towards the cookie-less future Google has long promised and this decision has put both marketers and developers on notice to start making serious changes to the way they approach first-party data.
Josh Koenig, Co-founder & Chief Strategy Officer at Pantheon (a SaaS-based WebOps platform), shares his insights with Digital Journal into how these changes will affect developers and the challenges they face with these latest Google Privacy Sandbox updates.
Digital Journal: Google has been teasing the end of cookies for some time now. How is this latest update different?
Josh Koenig: Google first started talking about the sunset of third-party cookies in 2018, with a plan to complete its cookie-less transition within two years. Now in 2023, the goal posts have moved a few times. In this latest announcement, Google has committed to turning off third-party cookies for 1 percent of Chrome users by 2024, testing the waters to see how much breakage ensues and to work out the kinks.
Up until now it’s been a lot of talk and preparation. This latest update is the first concrete step towards the cookie-less future Google has promised.
DJ: How must developers adapt to these privacy changes?
Koenig: This is the beginning of a huge upheaval in MarTech and AdTech. Third-party cookies and scripts are how most MarTech and AdTech tools work. People depend on these for everything from analytics to personalization. Without them, a lot of web functionalities are going to degrade or break down. Anything controlled by a tag manager is potentially at risk.
There will likely be workarounds from big MarTech vendors, but interacting with Privacy Sandbox will be very different from current approaches. With cookies, individual data is collected from web activity and used for ad targeting. With Privacy Sandbox, Google collects that data and groups it into “topics,” and shares that information with advertisers without sharing user identity. To adapt to these changes, developers will need to change implementations or rethink how they deliver key functionality.
The good news about Google’s slow rollout is that companies are already re-thinking user and customer data in general around a first-party approach. Those that aren’t already well underway are probably going to be caught flat-footed.
DJ: What are the major concerns or challenges that developers face with this move to Google Privacy Sandbox?
Koenig: There are reasonable concerns the end of cookies may kill off some smaller Martech/Adtech SaaS startups if their tools break. That can have ripple effects for any other companies that depend on said tools. This will also have a big impact on ad-supported websites, which will need to rethink and reprogram their ads strategies.
In the short run, as the ability to micro-target new customers declines, these changes could hurt the discoverability of websites, apps and products, including the ability for new things to get off the ground. On the brighter side, we are already seeing digital marketing teams diverting resources from “buying” their audience and into “earning” them by investing more budget and effort in creating compelling and engaging content and experiences. This should have a longer-term impact of increasing the quality of the web overall.
DJ: What effect, if any, will this have on other, non-Google ad networks?
Koenig: One of the big fears out there is that non-Google ad networks will be impacted. Google assures marketers that it will not hurt its competition since it is free to use and compatible with outside advertising systems. All of this is true, but change is disruptive. Only time will tell whether this shift makes the AdTech ecosystem more or less open and diverse.
DJ: What other challenges are there?
Koenig: This is not just a hurdle for existing products but an opportunity for products designed for first-party integrations, like the analytics tools of yesteryear that plugged into the site-serving path, as well as third-party products that can respect the new boundaries.
MarTech and AdTech is in the process of reinventing itself, not only in the face of Google’s updates but also growing considerations and regulation around data privacy. Change is always difficult, but the hope is that on the other side we can create a better MarTech ecosystem that is able to better protect consumer privacy and enable marketers to make better impacts through their campaigns.
