Google’s Ditching Third-party Cookies, for Good or Bad?
In March 2021, Google announced its ban on third-party cookies by 2022. Despite its good intention to protect user privacy, this move may actually introduce a classic walled garden to the online advertising industry.
From the Cambridge Analytica scandal to the always-listening digital assistant in your apartment, there are more and more concerns about Internet users' privacy. Change is necessary as the era of surveillance capitalism is here.
In March 2021, Google, the largest web browser (with about 60%-70% of the market share), announced its ban on third-party cookies by 2022. Despite its good intention to protect user privacy, this move may introduce a classic walled garden to the online advertising industry.
Walled Garden vs. Squirrels
Before I explain the complicated proposal of Google, I’d like to introduce the concept of “Walled Garden” through my little battle against squirrels.
I was an environmental study major back in Berkeley, so when I found a squad of squirrels wreaking havoc on my loganberry bushes, I was greatly confident in using my agricultural knowledge to get rid of them. With 50 bucks, I built a super “walled garden” with mesh wires, a hawk decoy, and a bottle of coyote urine as a deterrent.
After a few weeks, the size of the squirrel gang reduced. However, none of the loganberry bushes survived.
The most fierce and smartest gang members made their way through and ate all the loganberries.
The takeaway is that there is never a perfect walled garden. It may deter most of the threats in short term but cannot guarantee the safety of your assets if not incur even more damages.
How Bittersweet 3rd Party Cookies are?
Cookies are sweet. 3rd party cookies are bittersweet. Why?
They are sweet because they (small snippets of code) enable digital marketers to identify visitors on different websites. We can personalize ads based on visitors’ browsing history, detect their needs and problems and limit the frequency of the ads (that is, to avoid showing the same advertisement to the same user multiple times within a certain period). At the same time, it measures the performance of advertising and attributed the conversion of advertising views (exposure) and clicks.
But why third-party cookies may be bitter? Because they send the data back to a different domain than the website a user is currently on. In comparison, first-party cookies only feed data back to the owner of the website the user is currently visiting.
Third-party cookies can collect your search history, your online transactions, and your interests.
All of those data can be shared with some of the most common AdTech platforms like Salesforce's DMP platform, Criteo's retargeting platform, and Nielsen's multipoint attribution model... However, they can be fed back to murky data brokers.
Cookies are old technology. We can find better privacy-preserving alternatives.
Google’s Approach
Most web browsers are becoming more privacy-protected. These changes restrict third-party cookies and similar storage methods to prevent users from being tracked on the Internet.
A large number of articles have discussed Google's termination of cookies since March. A common misconception is that cookies are dead. We have only been talking about third-party cookies.
Google’s Privacy Sandbox proposals are complicated and evolving based on feedback and counterproposals from rivals. Depending on which version of this idea is implemented — there are many — users who could be grouped by their common interests through a Federated Learning of Cohorts (FLoC) model. To put it simply, Google uses machine learning to glean “user interest” instead of “individual data” from browsing behaviors. Advertisers can only feed ads based on cluster information, not to an individual level. For instance, if you search for methods to keep squirrels out of your yards, you may wind up in a cohort of horticulture, a cohort of homeowners, and maybe a cohort of animal haters. Though individual data will not be isolated or easily identifiable (allegedly), how accurate or unbiased the cluster would be?
A Walled Garden of Data
As we all know, data collection is one of the most precious assets for online advertising, mainly controlled by several large companies: Google, Facebook, and Amazon. They have a large enough share of the market to collect data and define the way to process the data.
Removing 3rdparty cookies will make it more difficult for advertisers to access user-level data.
The network will become more private to a certain extent.
But the industry is still far away from true privacy protection. Despite all these privacy upgrades, Google will still collect data at the most granular level, further building its walled garden of data. Advertising companies may still get the data they want, from Chrome's Privacy Sandbox, with an "admission fee" or “privacy premium”. Some critics say the move may simply put small advertising firms out of business. On the other hand, from my working experience in programmatic ads, I know these small AdTech platforms are “fierce and smart” and they have been researching cookie-free solutions that will allow them to remain effective in collecting user-level data.
Can Google introduce these privacy changes and protect user-level data? I hope this is a step towards a world without the myriad problems of targeted or biased advertising. But I'd want to see the final implementation of Google's solutions.
Wait for a second...
Did I just see an ultrasonic squirrel repeller ad on my browser?
