Google’s Cookie U-turn: The dentsu digital Perspective

In a "surprising" twist, Google announced that it would no longer deprecate third-party cookies in its Chrome browser. Initially set to phase out by 2022 in favour of privacy-preserving alternatives, the deadline was pushed to 2025. Now, it’s off the table entirely.

Why the change? Google aimed to enhance consumer privacy while providing publishers and developers with new tools. This led to the Privacy Sandbox initiative, which faced criticism and regulatory scrutiny, particularly from the CMA, over concerns of unfair monopoly and reduced publisher revenue.?

What this means for our clients?

Despite the U-turn, the work we’ve been doing remains crucial in a privacy-first world. We need to support brands to work towards a compliant and addressable future. Here’s why:?

1. Consumer mindset shift

Even without the cookie phase-out, consumers are demanding more privacy. Around 25% of customers now opt out of tracking.?

What it means: Our privacy-first solutions are still vital as consented data through Chrome is likely to drop, and customers expect to have more control over their data.?

2. Regulatory pressure

With increasing mistrust around user privacy, legislation like GDPR and similar laws in the US (nine US states now have privacy laws equivalent to GDPR) and around the world, compliance is more important than ever.

Sarah Taylor, dentsu Media Technology Senior Manager, adds emphasis to the increasing intensity of the regulatory environment, with significant developments such as the Digital Markets Act (DMA) coming into place in March 2024. This extends the use of GDPR, which Google has adhered to by requiring advertisers to declare user consent for tracking before processing data. This measure ensures that only consented data is used, providing transparency and compliance proof to regulators.??

Additionally, Meta is reassessing its ‘pay or ok’ model – where users pay a platform usage fee to avoid ads and tracking or consent to data sharing without payment – to better align with DMA requirements. These examples highlight the evolving landscape of regulations that have evolved post-GDPR.?

What it means: Our efforts to align data practices with regulations remain critical.?

3. Unreliable cookies

Before Google’s plans, over 50% of the web was invisible to cookie-based targeting in 2017. Safari and Mozilla had already phased out third-party cookies. They’re a small part of the puzzle and not always reliable, relying on data syncing across platforms to accurately track user journey.

What it means: Testing non-Chrome solutions is essential to avoid media wastage and irrelevant ads. Digital teams should work alongside measurement specialists to understand the implications of a more fragmented landscape.?

4. Low opt-in rates

With only 25% of users opting into tracking on iOS across 2024, we expect similar rates for Chrome. However, we’re yet to understand what Google’s planned opt-in mechanism looks like.?

What it means: We must move beyond third-party cookie-based solutions for activation and measurement and continue testing compliant targeting approaches and creative solutions. Non-ID-party solutions include first-party data, conversion API partnerships and contextual targeting.

5. First-party data is key

Brands should focus on collecting and leveraging their own first-party data through privacy-centred marketing strategies.?

What it means: Transparency and respecting user preferences are essential to build customer trust and drive growth. We should embrace the innovations of new privacy-preserving technologies, leverage AI-powered solutions, including CAPI and Customer Match, and work with clients to develop their first-party data strategies and make the best use of the data they own.?

6. Beyond cookies

Many effective digital media channels, like mobile apps, CTV, Digital Audio, and DOOH, are already cookie-free. Embracing the potential of programmatic media means being comfortable with alternative targeting and measurement techniques and going beyond cookie-based solutions.

What it means: Whether this includes tried and tested Contextual Targeting or Amazon 1st party data, utilising Quantcast or MIQ cookieless solutions or dentsu’s own cookieless solution Merkury, we are already comfortable and successful in utilising privacy compliant solutions with scale that do not hinder performance.

7. Evolving measurement

Platform-based data and holistic measurement models are an important part of overarching measurement solutions.

What it means: Modelled platform measurement is a new reality. We should stay focused on understanding how modelled data sources come together. Investing in incrementality experiments and advanced measurement solutions is crucial. Meanwhile, Private measurement solutions such as MMM continue to advance. Exploring and adopting available privacy-enhancing technology solutions, like clean rooms, alongside MMM solutions is key.?

Final thoughts from dentsu and the industry??

IAB CEO John Mew emphasises that the industry shouldn’t revert to cookies, given the progress made.

Over the past four years, we’ve developed and tested cookie-free alternatives, including contextual targeting capabilities and retail media solutions, and building strategic partnerships with publishers who have responsible relationships with their consumers. We lead the marketing for CAPI adoption and capability.

These alternative solutions have benefited from increased investment. They wouldn’t be where they are today without Google’s plans to deprecate third-party cookies.

Advertisers should continue pursuing privacy-compliant methods to reach customers, as they continue to feel the benefits and progress within the space despite Google’s updated plans.

MIQ says, “It seems like a very likely outcome is that the industry will continue to need to support a selection of options for targeting and measurement to reach consumers with varying levels of preference around data privacy, at scale.

Perhaps both are better – we undertook a recent retargeting test, which showed that cookies and first-party data via cookieless identifiers improved reach by 3x with a 1% audience overlap.

At MiQ, we’re continuing investment to support all the options advertisers need to achieve successful marketing outcomes. With this focus, we can contribute to a sustainable ad-funded web.”?